Existing law provides that the Department of Transportation has full possession and control of the state highway system, including associated property. Existing law authorizes the department to lease certain property, including the area above or below a state highway, and certain property held for future highway purposes, to public agencies under specified terms and conditions, including specific provisions governing leases of airspace and other property in the City and County of San Francisco for purposes of an emergency shelter or feeding program, and at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year.Existing law also requires that a lease be offered on a right of first refusal by the department to the city and county or a political subdivision of the city and county and authorizes leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions.

This bill would authorize the department to offer a lease to the City of Oakland on a right of first refusal basis for any airspace under a freeway or certain real property acquired for highway purposes located in the city for purposes of an emergency shelter or feeding program for a lease amount, for up to 10 parcels, of $1 per month, and a payment of an administrative fee not to exceed $500 per year, as specified.

Existing law provides that the Department of Transportation has full possession and control of the state highway system, including associated property. Existing law authorizes the department to lease certain property, including the area above or below a state highway, and certain property held for future highway purposes, to public agencies under specified terms and conditions, including specific provisions governing leases of airspace and other property in the City and County of San Francisco for purposes of an emergency shelter or feeding program, and at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year.Existing law also requires that a lease be offered on a right of first refusal by the department to the city and county or a political subdivision of the city and county and authorizes leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions.

This bill would authorize the department to offer a lease to the City of Oakland on a right of first refusal basis for any airspace under a freeway or certain real property acquired for highway purposes located in the city for purposes of an emergency shelter or feeding program for a lease amount, for up to 10 parcels, of $1 per month, and a payment of an administrative fee not to exceed $500 per year, as specified.

Existing law provides that the Department of Transportation has full possession and control of the state highway system, including associated property. Existing law authorizes the department to lease certain property, including the area above or below a state highway, and certain property held for future highway purposes, to public agencies under specified terms and conditions, including specific provisions governing leases of airspace and other property in the City and County of San Francisco for purposes of an emergency shelter or feeding program, and at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year.Existing law also requires that a lease be offered on a right of first refusal by the department to the city and county or a political subdivision of the city and county and authorizes leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions.

This bill would authorize the Department of Transportation department to offer a lease to the City of Oakland on a right of first refusal basis for any airspace under a freeway or certain real property acquired for highway purposes located in the city for purposes of an emergency shelter or feeding program at for a lease cost amount, for up to 10 parcels, of $1 per month month, and a payment of an administrative fee not to exceed $500 per year, as specified.

Existing law provides that the Department of Transportation has full possession and control of the state highway system, including associated property. Existing law authorizes the department to lease certain property, including the area above or below a state highway, and certain property held for future highway purposes, to public agencies under specified terms and conditions, including specific provisions governing leases of airspace and other property in the City and County of San Francisco for purposes of an emergency shelter or feeding program, and at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year.

Existing law also requires that a lease be offered on a right of first refusal by the department to the city and county or a political subdivision of the city and county and authorizes leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions, including a requirement for the department to lease property located within a priority development area to the city and county for up to 10 parcels, at a specified below market value lease amount, and a requirement, applicable to all leases, for the lessee to be responsible for all associated maintenance costs. Existing law also requires that a lease authorize the lessee to subsidize its maintenance costs through a limited revenue generation model, with any revenues generated above the maintenance costs to be shared with the state and requires the City and County of San Francisco or a political subdivision of the city and county, in consultation with the department, to follow all applicable health, environmental, safety, design, and engineering standards. conditions.

This bill would make these provisions applicable to authorize the Department of Transportation to offer a lease to the City of Oakland on a right of first refusal basis for any airspace under a freeway or certain real property acquired for highway purposes located in the City of Oakland. city for purposes of an emergency shelter or feeding program at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year, as specified.

Existing law, the Street Lighting Act of 1919, authorizes a city council to order a street lighting system, as defined, to be maintained in or along city streets and to assess the lands abutting the streets for the cost of the system. Existing law authorizes the city council of any city when in its opinion the public interest or convenience requires to take one or more actions, including, to order any street lighting system to be maintained in or along the whole or any part of any one or more of the streets in such city, or to order electric current or energy, gas, or other illuminating agent to be furnished for such street lighting system.

This bill would make nonsubstantive changes to these provisions.

 THIRD READING  

Bill No: AB 3139

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 12-0, 6/19/18

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

NO VOTE RECORDED: Morrell

SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/16/18

AYES: Portantino, Beall, Bradford, Hill, Wiener

NOES: Nielsen

NO VOTE RECORDED: Bates

ASSEMBLY FLOOR: 55-19, 5/30/18 - See last page for vote

SUBJECT:

SOURCE: City of Oakland

DIGEST:

This bill requires the California Department of Transportation (Caltrans) to offer up to 10 $1-per-month airspace leases to the City of Oakland for emergency shelter or feeding programs.

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 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.

This bill:

1. Requires any airspace under a freeway, or real property acquired for highway purposes, in the City of Oakland, that is not excess property, to be offered by Caltrans for lease on a right of first refusal to the city, or to a political subdivision of the city, for purposes of an emergency shelter or feeding program.
2. Requires, for up to 10 parcels, the lease amount for emergency shelter or feeding programs to be $1 per month.
3. Allows the lease amount to be paid in advance of the term covered in order to reduce the administrative costs associated with the payment of the monthly rental fee.
4. Requires the lease to require the payment of an administrative fee not to exceed $500 per year, unless Caltrans determines that a higher administrative fee is necessary, for its cost of administering the lease.
5. Finds and declares that the lease of real property pursuant to these provisions serves a public purpose.

Comments

1. Author’s statement. “As one part of its larger strategy to address the growing homeless crisis, the City of Oakland is looking to lease vacant, unused right of way parcels from Caltrans and put it into productive use; specifically, for emergency shelters. This bill seeks to provide the City of Oakland an opportunity to lease certain Caltrans parcels for emergency shelters and recreational areas where appropriate. Without this bill the cost to lease these parcels would be full market rate, which is cost prohibitive, and therefore would remain vacant, blighted, and an attractive nuisance.”

According to the author, Oakland is facing a homelessness crisis. Oakland's homeless population is estimated to be 2,761, and only 859 of these individuals are able to take advantage of existing shelter space. Most of the homeless have chronic health problems; some of these individuals are fully employed but can no longer afford the cost of housing in the Bay Area. The author believes that this bill will enable the City of Oakland to have the ability to address some of its homelessness concerns by being able to lease space affordably for emergency shelter and feeding programs.

1. Special treatment for shelter/feeding programs. The authority for Caltrans to enter into airspace leases is in existing law and 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 authorize 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 below-market rate leases for these particular uses serve a public purpose.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, unknown future loss of Caltrans lease revenues, potentially in the low hundreds of thousands annually. 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 specific properties in question 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 Oakland (source)

OPPOSITION: (Verified 8/16/18)

None received

ASSEMBLY FLOOR: 55-19, 5/30/18

AYES: Acosta, Arambula, Berman, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Chau, Chiu, Chu, Cooley, Cooper, Cunningham, Daly, Eggman, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Jones-Sawyer, Kalra, Kamlager-Dove, Lackey, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NOES: Travis Allen, Baker, Bigelow, Brough, Cervantes, Chávez, Chen, Choi, Dahle, Flora, Gallagher, Harper, Irwin, Kiley, Mathis, Melendez, Obernolte, Patterson, Voepel

NO VOTE RECORDED: Aguiar-Curry, Fong, Mayes, Steinorth

Prepared by:

8/18/18 13:09:37

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 3139 (Bonta) - State highways: property leases

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

Bill Summary:

AB 3139 would authorize the Department of Transportation (Caltrans) to offer for lease on a first right of refusal to the City of Oakland any airspace under a freeway or real property acquired for highway purposes for an emergency shelter or feeding program. For up to ten parcels, the lease amount would be limited to $1 per month, plus an administrative fee of up to $500 per year, as specified.

Fiscal Impact:

Unknown future loss of Caltrans lease revenues, potentially in the low hundreds of thousands annually. 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 specific properties in question 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 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 requires Caltrans to offer for lease on a first right of refusal any airspace under a freeway, or real property acquire for highway purposes in San Francisco that is not excess property, for purposes of an emergency shelter or feeding program, or for park, recreational, or open space purposes. Leases for emergency shelter or feeding program purposes must be for $1 per month, and leases for park, recreational, or open-space purposes must be for 30% of the fair market value for up to 10 parcels, as specified, plus an annual administrative fee of up to $500.

Proposed Law:

AB 3139 would authorize Caltrans to offer for lease on a first right of refusal any airspace under a freeway, or real property acquired for highway purposes in Oakland that is not excess property, for purposes of an emergency shelter or feeding program. For up to 10 parcels, the lease amount would be limited to $1 per month and an administrative fee of up to $500 per year. The bill also includes a legislative finding and declaration that the lease of real property as a result of this authority serves a public purpose.

Related Legislation:

AB 2629 (Eggman), which is pending in this Committee, would delete the renewal restrictions for a specified below-market-rate airspace lease between Caltrans and the City of Stockton under the interchange of SR 4 and Interstate 5.

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.

SB 120 (Kopp), Chap. 750/1993, authorizes Caltrans to lease to San Francisco any airspace under a freeway, or real property acquired for highway purposes that is not excess property, for an emergency shelter or feeding program at a rate of $1 per month and an administrative fee of up to $500 per year.

Staff Comments:

Caltrans currently leases 53 parcels within the City of Oakland to private entities at market rate for a commercial purpose (mainly parking and storage). Those leases generate $2.13 million in lease revenues annually, or an average of approximately $40,000 per lease. Assuming the average fair market value averages $40,000 for up to 10 leases specified in the bill for emergency shelters or feeding programs, the bill could result in foregone revenues of up to $400,000 annually. Actual revenue losses could be lower or higher, depending on the number of leases Oakland opts to pursue as a result of the bill and the market rate of specific parcels chosen for shelters or feeding programs.

-- END --

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2017 - 2018 Regular

Bill No: Hearing Date: 6/19/2018

SUBJECT:

DIGEST: This bill requires Caltrans to offer up to ten $1-per-month airspace leases to the City of Oakland for emergency shelter or feeding programs.

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 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. 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. Requires any airspace under a freeway, or real property acquired for highway purposes, in the City of Oakland, that is not excess property, to be offered by Caltrans for lease on a right of first refusal to the city, or to a political subdivision of the city, for purposes of an emergency shelter or feeding program.
2. Requires, for up to 10 parcels, the lease amount for emergency shelter or feeding programs to be $1 per month.
3. Allows the lease amount to be paid in advance of the term covered in order to reduce the administrative costs associated with the payment of the monthly rental fee.
4. Requires the lease to require the payment of an administrative fee not to exceed $500 per year, unless Caltrans determines that a higher administrative fee is necessary, for its cost of administering the lease.
5. Finds and declares that the lease of real property pursuant to these provisions serves a public purpose.

COMMENTS

1. Author’s Statement. As one part of its larger strategy to address the growing homeless crisis, the City of Oakland is looking to lease vacant, unused right of way parcels from Caltrans and put it into productive use; specifically, for emergency shelters. This bill seeks to provide the City of Oakland an opportunity to lease certain Caltrans parcels for emergency shelters and recreational areas where appropriate. Without this bill the cost to lease these parcels would be full market rate, which is cost prohibitive, and therefore would remain vacant, blighted, and an attractive nuisance.

According to the author, Oakland is facing a homelessness crisis. Oakland's homeless population is estimated to be 2,761, and only 859 of these individuals are able to take advantage of existing shelter space. Most of the homeless have chronic health problems; some of these individuals are fully employed but can no longer afford the cost of housing in the Bay Area. The author believes that this bill will enable the City of Oakland to have the ability to address some of its homelessness concerns by being able to lease space affordably for emergency shelter and feeding programs.

1. Special treatment for shelter/feeding programs. The authority for Caltrans to enter into airspace leases is in existing law and 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 authorize 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 below-market rate leases for these particular uses serve a public purpose.
2. 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.

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 was held on Suspense in the Assembly Appropriations Committee.

AB 2629 (Eggman, 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, 2018.

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.

ASSEMBLY VOTES:

Floor: 55-19

Transportation: 10-3

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

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

June 13, 2018.)

SUPPORT:

City of Oakland (Sponsor)

OPPOSITION:

None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 3139

Author:(Bonta)

As Amended Ver:May 25, 2018

Majority vote

SUMMARY: Authorizes the California Department of Transportation (Caltrans) to lease, at a discount, airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs, under specific terms and conditions. Specifically, this bill:

1. Authorizes Caltrans to lease for $1 per month up to 10 parcels of airspace or real property to the City of Oakland, or a political subdivision of the city, for emergency shelter or feeding programs.
2. Declares that a lease let under this authority serves a public purpose.
3. Requires Caltrans to include in a lease let under this authority an administrative fee not to exceed $500 per year unless Caltrans determines a higher fee is necessary.
4. Authorizes the lessee to pay the lease amount in advance in order to reduce the administrative costs associated with the payment of a monthly rental fee.

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 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.
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 Caltrans to lease to San Francisco, 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.
5. Authorizes Caltrans to lease to San Joaquin County, Santa Barbara County, or a political subdivision of either, airspace under specified freeways for an emergency shelter or feeding program at a rate of $1 per month.

FISCAL EFFECT: According to the Assembly Appropriations Committee, potentially significant revenues loss, likely in the hundreds of thousands of dollars annually, to the extent Oakland exercises its first right of refusal to lease airspaces or parcels for $1 per month. There are currently 53 market-rate Caltrans leases within Oakland that generate a total of $2.13 million, or an average of about $40,000 per lease. If five of these market-rate leases are converted to discounted leases for emergency shelter or feeding programs, revenue loss will be about $200,000. In addition, Oakland currently leases one parcel from Caltrans for $2,000 per year. This existing lease is up for renewal in 2019 and could be renewed at a lower cost under this bill, resulting in additional minor revenue loss. Revenue from Caltrans leases is used to offset transportation bond debt service costs to the benefit of the General Fund, meaning this revenue loss is equivalent to a General Fund revenue loss.

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.

According to the author, Oakland is facing a homelessness crisis. Oakland's homeless population is estimated to be 2,761, and only 859 of these individuals are able to take advantage of existing shelter space. Most of the homeless have chronic health problems; some of these individuals are fully employed but can no longer afford the cost of housing in the Bay Area. The author believes that this bill will enable the City of Oakland to have the ability to address some of its homelessness concerns by being able to lease space affordably for emergency shelter and feeding programs.

Committee Comment: This bill is not without precedence. Existing law provides a number of examples wherein Caltrans is authorized to lease airspace at below market rate, and there are a number of instances where these leases exist. In the instances where Caltrans has entered into below market rate leases for emergency shelters, feeding programs, or other public purposes, statute authorizing them to do so has led Caltrans to provide the designated airspace lease to the local community. While this bill may provide much needed emergency housing or space for feeding programs in Oakland, it may result in some lost state revenue. It is worth noting that the revenue generated by airspace leases currently flows to the General Fund, and therefore this bill could result in reducing resources for programs that currently benefit the very communities the bill aims to help.

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093 FN: 0003279

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 3139

Author:(Bonta) – As Amended Ver:April 9, 2018

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

SUMMARY:

This bill authorizes the California Department of Transportation (Caltrans) to lease at a discount any airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs, under specific terms and conditions. Specifically, this bill:

1. Authorizes Caltrans to lease for $1 per month any airspace or real property to the City of Oakland, or a political subdivision of the city, for an emergency shelter or feeding program.
2. Requires Caltrans to include in a lease let under this authority an administrative fee not to exceed $500 per year unless Caltrans determines a higher fee is necessary.
3. Authorizes the lessee to pay the lease amount in advance in order to reduce the administrative costs associated with the payment of a monthly rental fee.

FISCAL EFFECT:

Potentially significant revenues loss, likely in the hundreds of thousands of dollars annually, to the extent Oakland exercises its first right of refusal to lease airspaces or parcels for $1 per month. There are currently 53 market-rate Caltrans leases within Oakland that generate a total of $2.13 million, or an average of about $40,000 per lease. If five of these market-rate leases are converted to discounted leases for emergency shelter or feeding programs, revenue loss will be about $200,000. In addition, Oakland currently leases one parcel from Caltrans for $2,000 per year. This existing lease is up for renewal in 2019 and could be renewed at a lower cost under this bill, resulting in additional minor revenue loss. Revenue from Caltrans leases is used to offset transportation bond debt service costs to the benefit of the GF, meaning this revenue loss is equivalent to a GF revenue loss.

COMMENTS:

1. Background. Current law authorizes Caltrans to enter into airspace leases at market rates. In addition, various statutory exceptions to the fair-market-rate requirement allow Caltrans to lease airspace or unused parcels of land below market rates to various cities and counties for the purposes of emergency shelters and feeding programs, or for parks and open space. However, statutory authority for below-market-rate leases for emergency shelter or feeding programs is not provided for Oakland.
2. Purpose. According to the author, Oakland is facing a homelessness crisis. Oakland’s homeless population is estimated to be 2,761, and only 859 of these individuals are able to take advantage of existing shelter space. The author believes that this bill will enable Oakland to have the ability to address some of its homelessness concerns by being able to lease space affordably for emergency shelter and feeding programs.
3. Related legislation.

AB 2629 (Eggman), of the current legislative session, eliminates the renewal conditions of Caltrans’ airspace lease to the City of Stockton for emergency shelter or feeding program purposes. AB 2629 is pending hearing in this committee.

AB 1898 (Mathis), of the current legislative session, authorizes Caltrans to lease at a discount airspace or parcels in disadvantaged communities. AB 1898 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 3139 (

Author:Bonta) – As Amended Ver:April 9, 2018

SUBJECT: State highways: property leases

SUMMARY: Authorizes the California Department of Transportation (Caltrans) to lease at a discount any airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs, under specific terms and conditions. Specifically, this bill:

1. Authorizes Caltrans to lease for $1 per month any airspace or real property to the City of Oakland, or a political subdivision of the city, for emergency shelter or feeding programs.
2. Declares that a lease let under this authority serves a public purpose.
3. Requires Caltrans to include in a lease let under this authority an administrative fee not to exceed $500 per year unless Caltrans determines a higher fee is necessary.
4. Authorizes the lessee to pay the lease amount in advance in order to reduce the administrative costs associated with the payment of a monthly rental fee.

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 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.
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 Caltrans to lease to San Francisco, 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.
5. Authorizes Caltrans to lease to San Joaquin County, Santa Barbara County, or a political subdivision of either, airspace under specified freeways 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.

According to the author, Oakland is facing a homelessness crisis. Oakland’s homeless population is estimated to be 2,761, and only 859 of these individuals are able to take advantage of existing shelter space. Most of the homeless have chronic health problems; some of these individuals are fully employed but can no longer afford the cost of housing in the Bay Area. The author believes that this bill will enable the City of Oakland to have the ability to address some of its homelessness concerns by being able to lease space affordably for emergency shelter and feeding programs.

Committee Comment: This bill is not without precedence. Existing law provides a number of examples wherein Caltrans is authorized to lease airspace at below market rate, and there are a number of instances where these leases exist. In the instances where Caltrans has entered into below market rate leases for emergency shelters, feeding programs, or other public purposes, statute authorizing them to do so has led Caltrans to provide the designated airspace lease to the local community. While this bill may provide much needed emergency housing or space for feeding programs in Oakland, it may result in some lost state revenue. It is worth noting that the revenue generated by airspace leases currently flows to the General Fund, and therefore this bill could result in reducing resources for programs that currently benefit the very communities the bill aims to help.

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 2629 (Eggman), eliminates the renewal conditions of Caltrans’ airspace lease to the City of Stockton for emergency shelter or feeding program purposes. AB 2629 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.

REGISTERED SUPPORT / OPPOSITION:

Support

City of Oakland (Sponsor)

Opposition

None on file

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