CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1164

Author:(Gloria)

As Amended Ver:June 3, 2019

2/3 vote

SUMMARY:

Allows the Director of the Department of General Services (DGS) to declare a property known as the San Diego State Building surplus in order to permit its disposal by DGS.

The Senate Amendments:

Make technical changes to describe the boundaries of the San Diego State Building.

COMMENTS:

The San Diego State Office Building was constructed in 1963 and is located in downtown San Diego. The property has approximately 123,226 usable square feet. According to DGS, many of the building systems are original and have far exceeded their useful life. There are 16 departments in the building occupying or paying for space, ranging from 299 square feet to 27,540 square feet. However, only approximately 61,832 usable square feet are currently occupied and DGS has requests from current building occupants to relocate. In DGS's Portfolio Plan for non-Sacramento office buildings, published in May 2019, DGS recommended disposing of the property through the surplus property process.

According to the Author:

"The State of California inefficiently occupies two city blocks in Downtown San Diego. The condition of the Downtown San Diego State Building has been declining for years. Asbestos has been found and the building itself is underutilized. This bill will start the process for the Department of General Services to sell the State Building in an effort to make way for a more efficient use."

Arguments in Support:

According to the Downtown San Diego Partnership, "The two city blocks that this property takes up in Downtown San Diego could be put to better use. The building has been in terrible condition for too long and we are eager to see it better utilized for the benefit of the surrounding community. This space has tremendous potential, which cannot be realized without this crucial legislation. "

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

According to the Senate Appropriations Committee,

1. One-time costs to DGS of $48,000 to appraise and sell the property which would be repaid from the property sale proceeds. (Property Acquisition Law)
2. Unknown potential revenue from the net property sale proceeds that exceeds the amount required to be repaid to the Property Acquisition Law Money Account for selling the property (Special Fund for Economic Uncertainties)

VOTES:

ASM ACCOUNTABILITY AND ADMINISTRATIVE REVIEW: 7-0-0

YES: Petrie-Norris, Patterson, Burke, Lackey, Medina, Quirk-Silva, Smith

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ASSEMBLY FLOOR: 74-0-6

YES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Arambula, Burke, Cooley, Friedman, Cristina Garcia, Ting

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ABS, ABST OR NV: Jones

UPDATED:

VERSION: June 3, 2019

CONSULTANT: Cassie Royce / A. & A.R. / (916) 319-3600 FN: 0001230

 THIRD READING  

Bill No: AB 1164

Author: Gloria (D)

Amended: 6/3/19 in Senate

Vote: 27

SENATE GOVERNMENTAL ORG. COMMITTEE: 14-0, 6/11/19

AYES: Dodd, Wilk, Allen, Archuleta, Borgeas, Bradford, Chang, Galgiani, Glazer, Hill, Jones, Nielsen, Portantino, Wiener

NO VOTE RECORDED: Hueso, Rubio

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/1/19

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

ASSEMBLY FLOOR: 74-0, 5/16/19 (Consent) - See last page for vote

SUBJECT: Surplus state real property: disposal

SOURCE: Author

DIGEST: This bill authorizes the Department of General Services (DGS) to dispose all or any part of the property known as the San Diego State Office Building in San Diego County.

ANALYSIS:

Existing law:

1. Authorizes DGS, subject to legislative approval, to sell, lease, exchange, or transfer various specified properties for current market value, or upon such other terms and conditions that DGS determines are in the best interest of the state.
2. Establishes criteria for state agencies to use in determining and reporting excess lands. A state agency must report land as surplus that is:
   1. Not currently utilized, or is underutilized, for any existing or ongoing programs;
   2. Land for which the agency cannot identify a specific utilization relative to future needs; and,
   3. Land not identified by the state agency within its master plan for facility development.
3. Requires DGS to dispose of surplus state real property in a specified manner, and prescribes the priority of disposition of the property before DGS may offer it for sale to private entities or individuals.
4. Authorizes DGS to sell surplus real property to a local agency or to a nonprofit affordable housing sponsor for affordable housing projects at a sales price less than fair market value if DGS determines that such a discount will enable housing for persons and families of low or moderate income.
5. Exempts the sale of surplus property sold “as is” from designated provisions of the California Environmental Quality Act (CEQA). However, the buyer or transferee of a parcel is subject to CEQA as well as any local governmental entitlement or land use approval requirements.

This bill:

1. Authorizes DGS to sell, exchange, sell combined with and exchange, or lease for fair market value, upon those terms and conditions as the Director of DGS determines are in the best interests of the state, all or any part of the property knowns as the San Diego State Office Building, consisting of approximately 2.7 acres, including two city blocks bound by Front Street, Ash Street, State Street, and A Street, and located at 1350 Front Street, San Diego, San Diego County.
2. Provides that to the extent that bonds issued by the State Public Works Board that involve the San Diego State Office Building are outstanding at the time the purchase, lease, or exchange agreement, the board shall approve the purchase, lease, or exchange agreement, and all costs associated with the defeasance of the bonds shall be paid from the proceeds from the transaction.

Background

San Diego State Office Building. The San Diego State Office Building was constructed in 1963 and is located in downtown San Diego. The property has approximately 123,226 usable square feet. It is centrally located at 1350 Front Street in the city’s downtown core. According to DGS, many of the building systems are original and have far exceeded their useful life. There are 16 departments in the building occupying or paying for space, ranging from 299 square feet to 27,540 square feet. However, only approximately 61,832 usable square feet are currently occupied and DGS has requests from current building occupants to relocate. DGS states that it is almost impossible to accommodate state departments’ programmatic needs due to design inefficiencies and hazardous materials in the building that make tenant improvement work prohibitively expensive.

In DGS’s Portfolio Plan for non-Sacramento office buildings, published in May 2019, DGS recommended disposing of the property through the surplus property process. DGS also proposed moving tenants into leased space, preferably into suburban areas where rates would be substantially lower. DGS noted that it may be feasible to sell the nearby DGS-controlled parking lot that serves the building to a developer. As part of that deal, the developer would be required to construct a new office building on the site and provide DGS with first right of refusal to lease the space.

Disposal of surplus property. DGS is currently responsible for the disposition of state-owned property that has been declared surplus to future state needs. The Legislature must declare the property to be surplus and must authorize the Director of DGS to sell, exchange, lease, or transfer the surplus property according to specified procedures set forth in law.

Generally, current law requires surplus property to be transferred or sold at market value, or upon such other terms and conditions that DGS determines are in the best interest of the state. Current law gives right of first refusal on any surplus property to a local agency and then to a nonprofit affordable housing sponsor, prior to being offered for sale to private entities or individuals in the open market. In addition, DGS is authorized to sell surplus property to a local agency or to a nonprofit affordable housing sponsor at a sales price less than fair market value if DGS determines that such a discount will enable housing for individuals or families of low or moderate income.

This bill authorizes DGS to dispose of the San Diego State Office Building consistent with current provisions on the disposal of surplus property.

Comments

Purpose of the bill. According to the author’s office, “currently, the State of California inefficiently occupies two city blocks in Downtown San Diego. The condition of the Downtown San Diego State Building has been declining for years. Asbestos has been found and the building itself is underutilized. This bill will start the process for DGS to sell the State Building in an effort to make way for a more efficient use.”

Related/Prior Legislation

SB 20 (Dodd, 2019) extends the sunset date, which expired on January 1, 2015, to January 1, 2026, for the state to sell the area known as the Skyline Wilderness Park in the County of Napa. (Pending in the Assembly Accountability and Administrative Review Committee)

SB 281 (Wiener, 2019), among other things, requires DGS, in consultation with the Department of Food and Agriculture, to enter into negotiations to sell, at fair market value, the real property known as the Cow Palace. (Never heard in Senate Appropriations Committee)

SB 501 (Hurtado, 2019) rescinds the authorization for DGS to sell the Reedley Armory. (Pending in the Assembly Veterans Affairs Committee)

AB 653 (Bloom, 2019) authorizes DGS, with the approval of the Adjutant General, to lease, for a term of 25 years, approximately 1.3 acres of the real property of the real property located at 1300 Federal Avenue, Los Angeles, California, known as the West Los Angeles National Guard Armory to the County of Los Angeles. (Pending in the Senate Governmental Organization Committee)

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

According to the Senate Appropriations Committee, one-time costs to DGS of $48,000 to appraise and sell the property which would be repaid from sale proceeds. Additionally, unknown potential revenue from the net property sale proceeds that exceeds the amount required to be repaid to the Property Acquisition Law Money Account for selling the property.

SUPPORT: (Verified 7/1/19)

Downtown San Diego Partnership

OPPOSITION: (Verified 7/1/19)

None received

ARGUMENTS IN SUPPORT: According to the Downtown San Diego Partnership, “enacting this legislation will provide the opportunity for local governmental and affordable housing agencies to express their interests in obtaining the property to address crucial needs in San Diego. The two city blocks that this property takes up in Downtown San Diego could be put to better use.”

ASSEMBLY FLOOR: 74-0, 5/16/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Arambula, Burke, Cooley, Friedman, Cristina Garcia, Ting

Prepared by: Felipe Lopez / G.O. / (916) 651-1530

7/3/19 14:50:19

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1164 (Gloria) - Surplus state real property: disposal

Bill Summary:

AB 1164 would allow the Director of the Department of General Services (DGS) to declare as surplus and dispose of a property known as the San Diego State Office Building in order to permit its disposal by DGS.

Fiscal Impact:

• One-time costs to DGS of $48,000 to appraise and sell the property which would be repaid from the property sale proceeds. (Property Acquisition Law)
• Unknown potential revenue from the net property sale proceeds that exceeds the amount required to be repaid to the Property Acquisition Law Money Account for selling the property (Special Fund for Economic Uncertainties)

Background:

Current law requires all state agencies to annually review and determine if any lands under their jurisdiction are in excess of need. This information is reported to DGS, which first determines if any properties can be used by another state agency, and if not, seeks legislative authorization to dispose of the properties. Upon such authorization, DGS must first offer each surplus property to the relevant local agencies and next to nonprofit affordable housing sponsors prior to offering the property to private entities through a bidding process.

All proceeds from the sale of surplus properties are deposited into the Deficit Recovery Bond Retirement Sinking Fund Subaccount to pay the principal and interest on bonds. Once the principal and interest on those bonds were fully paid, the proceeds from the sale of the surplus state property are to be deposited into the Special Fund for Economic Uncertainties (or other successor fund). The Economic Recovery Bonds were repaid in the 2014-15 fiscal year; therefore, all net property sale proceeds will be deposited into the Special Fund for Economic Uncertainties.

The San Diego State Office Building was constructed in 1963 and is located in downtown San Diego. The property has approximately 123,226 usable square feet. According to DGS, many of the building systems are original and have far exceeded their useful life. There are 16 departments in the building occupying or paying for space, ranging from 299 square feet to 27,540 square feet. However, only approximately 61,832 usable square feet are currently occupied and DGS has requests from current building occupants to relocate. In DGS’s Portfolio Plan for non-Sacramento office buildings, published in May 2019, DGS recommended disposing of the property through the surplus property process.

Proposed Law:

This bill would authorize DGS to sell, exchange, sell combined with an exchange, or lease for fair market value, upon those terms and conditions as the Director DGS determines are in the best interests of the state all or any part of the property known as the San Diego State Office Building in San Diego County. This bill would provide that to the extent that bonds issued by the State Public Works Board that involve this property to be sold are outstanding at the time the purchase, lease, or exchange agreement for a property identified in this section is ready for execution, the board shall approve the purchase, lease, or exchange agreement, and all costs associated with the defeasance of the bonds shall be paid from the proceeds from the transaction.

Related Legislation:

SB 20 (Dodd, 2019) would extend the sunset date, which expired on January 1, 2015, to January 1, 2026, for the state to sell the area known as the Skyline Wilderness Park in the County of Napa. The measure is pending in the Assembly Committee on Accountability and Administrative Review.

SB 501 (Hurtado, 2019) would rescind the authorization for DGS to sell the Reedley Armory. The measure is pending in the Assembly Veterans Affairs Committee.

AB 653 (Bloom, 2019) would authorize DGS, with the approval of the Adjutant General, to lease, for a term of 25 years, approximately 1.3 acres of the real property known as the West Los Angeles National Guard Armory to the County of Los Angeles. The measure is pending in the Senate Veterans Affairs Committee.

AB 869 (Cunningham, 2019) would require DGS to notify other state agencies of an excess property and take action on a transfer of jurisdiction request for the property within 150 days. The measure is pending in the Senate Governmental Organization Committee.

SB 922 (Nguyen, 2018) would have authorized DGS to dispose of state surplus property located within two miles of a campus of the University of California, California State University, or California Community College by first offering the property to a local agency or a nonprofit organization for the development of affordable student housing. The measure was held in the Senate Governmental Organization Committee.

The following measures are the most recent surplus property bills enacted into law:

AB 1977 (Accountability and Administrative Review, Chapter 430, Statutes of 2018)

AB 3251 (Veterans Affairs Committee, Chapter 726, Statutes of 2018)

AB 1709 (Veterans Affairs Committee, Chapter 304, Statutes of 2017)

AB 1057 (Weber, Chapter 147, Statutes of 2017)

SB 814 (Governmental Organization Committee, Chapter 815, Statutes of 2017)

AB 2247 (Williams, Chapter 382, Statutes of 2016)

SB 536 (Roth, Chapter 355, Statutes of 2015)

SB 273 (Hueso, Chapter 233, Statutes of 2015)

AB 2174 (Accountability and Administrative Review, Chapter 337, Statutes of 2014)

AB 826 (Jones-Sawyer, Chapter 505, Statutes of 2013)

SB 1850 (Committee on Governmental Organization, Chapter 798, Statutes of 2012)

AB 1272 (Butler, Chapter 178, Statutes of 2011)

SB 1167 (Cogdill, Chapter 327, Statutes of 2010)

Staff Comments:

Though upfront costs for the sale of the property would come from the Property Acquisition Law Money Account, this amount would be recouped from property sale proceeds following the sale of the property, therefore resulting in no net fiscal impact to DGS. Any additional revenue from the sale of the property would be deposited into the Special Fund for Economic Uncertainties. The Special Fund for Economic Uncertainties is a continuously appropriated fund; therefore, by increasing the amount transferred into this fund, this bill would make an appropriation.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2019 - 2020 Regular

Bill No: AB 1164 Hearing Date: 6/11/2019

SUBJECT: Surplus state real property: disposal

DIGEST: This bill authorizes the Department of General Services (DGS) to dispose all or any part of the property known as the San Diego State Office Building in San Diego County.

ANALYSIS:

Existing law:

1. Authorizes DGS, subject to legislative approval, to sell, lease, exchange, or transfer various specified properties for current market value, or upon such other terms and conditions that DGS determines are in the best interest of the state.
2. Establishes criteria for state agencies to use in determining and reporting excess lands. A state agency must report land as surplus that is:
   1. Not currently utilized, or is underutilized, for any existing or ongoing programs;
   2. Land for which the agency cannot identify a specific utilization relative to future needs; and,
   3. Land not identified by the state agency within its master plan for facility development.
3. Requires DGS to dispose of surplus state real property in a specified manner, and prescribes the priority of disposition of the property before DGS may offer it for sale to private entities or individuals.
4. Authorizes DGS to sell surplus real property to a local agency or to a nonprofit affordable housing sponsor for affordable housing projects at a sales price less than fair market value if DGS determines that such a discount will enable housing for persons and families of low or moderate income.
5. Exempts the sale of surplus property sold “as is” from designated provisions of the California Environmental Act (CEQA). However, the buyer or transferee of a parcel is subject to CEQA as well as any local governmental entitlement or land use approval requirements.

This bill:

1. Authorizes DGS to sell, exchange, sell combined with and exchange, or lease for fair market value, upon those terms and conditions as the Director of DGS determines are in the best interests of the state, all or any part of the property knowns as the San Diego State Office Building, consisting of approximately 2.7 acres, including two city blocks bound by Front Street, Ash Street, State Street, and A Street, and located at 1350 Front Street, San Diego, San Diego County.
2. Provides that to the extent that bonds issued by the State Public Works Board that involve the San Diego State Office Building are outstanding at the time the purchase, lease, or exchange agreement, the board shall approve the purchase, lease, or exchange agreement, and all costs associated with the defeasance of the bonds shall be paid from the proceeds from the transaction.

Background

Purpose of the bill. According to the author’s office, “currently, the State of California inefficiently occupies two city blocks in Downtown San Diego. The condition of the Downtown San Diego State Building has been declining for years. Asbestos has been found and the building itself is underutilized. This bill will start the process for DGS to sell the State Building in an effort to make way for a more efficient use.”

San Diego State Office Building. The San Diego State Office Building was constructed in 1963 and is located in downtown San Diego. The property has approximately 123,226 usable square feet. It is centrally located at 1350 Front Street in the city’s downtown core. According to DGS, many of the building systems are original and have far exceeded their useful life. There are 16 departments in the building occupying or paying for space, ranging from 299 square feet to 27,540 square feet. However, only approximately 61,832 usable square feet are currently occupied and DGS has requests from current building occupants to relocate. DGS states that it is almost impossible to accommodate state departments’ programmatic needs due to design inefficiencies and hazardous materials in the building that make tenant improvement work prohibitively expensive.

In DGS’s Portfolio Plan for non-Sacramento office buildings, published in May 2019, DGS recommended disposing of the property through the surplus property process. DGS also proposed moving tenants into leased space, preferably into suburban areas where rates would be substantially lower. DGS noted that it may be feasible to sell the nearby DGS-controlled parking lot that serves the building to a developer. As part of that deal, the developer would be required to construct a new office building on the site and provide DGS with first right of refusal to lease the space.

Disposal of surplus property. DGS is currently responsible for the disposition of state-owned property that has been declared surplus to future state needs. The Legislature must declare the property to be surplus and must authorize the Director of DGS to sell, exchange, lease, or transfer the surplus property according to specified procedures set forth in law.

Generally, current law requires surplus property to be transferred or sold at market value, or upon such other terms and conditions that DGS determines are in the best interest of the state. Current law gives right of first refusal on any surplus property to a local agency and then to a nonprofit affordable housing sponsor, prior to being offered for sale to private entities or individuals in the open market. In addition, DGS is authorized to sell surplus property to a local agency or to a nonprofit affordable housing sponsor at a sales price less than fair market value if DGS determines that such a discount will enable housing for individuals or families of low or moderate income.

This bill would authorize DGS to dispose of the San Diego State Office Building consistent with current provisions on the disposal of surplus property.

Prior/Related Legislation

SB 20 (Dodd, 2019) would extend the sunset date, which expired on January 1, 2015, to January 1, 2026, for the state to sell the area known as the Skyline Wilderness Park in the County of Napa. (Pending on the Assembly Desk)

SB 281 (Wiener, 2019) would, among other things, require DGS, in consultation with the Department of Food and Agriculture, to enter into negotiations to sell, at fair market value, the real property known as the Cow Palace. (Never heard in Senate Appropriations Committee)

SB 501 (Hurtado, 2019) would rescind the authorization for DGS to sell the Reedley Armory. (Pending in the Assembly Desk)

AB 653 (Bloom, 2019) would authorize DGS, with the approval of the Adjutant General, to lease, for a term of 25 years, approximately 1.3 acres of the real property of the real property located at 1300 Federal Avenue, Los Angeles, California, known as the West Los Angeles National Guard Armory to the County of Los Angeles. (Pending in the Senate Governmental Organization Committee)

AB 869 (Cunningham, 2019) would require DGS to notify other state agencies of an excess property and take action on a transfer of jurisdiction request for the property within 150 days. (Pending in the Senate Governmental Organization Committee)

AB 3251 (Veterans Affairs, Chapter 726, Statutes of 2018) authorized DGS, with the approval of the Adjutant General, to sell a number of armories including the Reedley Armory.

SB 814 (Committee on Governmental Organization, Chapter 815, Statutes of 2017) authorized DGS to dispose of a specified parcel of state property, consisting of approximately 65 acres, known as a a portion of the Department of Corrections and Rehabilitation’s Preston Youth Correctional Facility in Amador County.

AB 1057 (Weber, Chapter 147, Statutes of 2017) required the Director of DGS, with the approval of the Adjutant General, to offer an option to purchase a portion of the California Military Department’s San Diego Armory, as specified, to the San Diego Center for Children, a nonprofit organization.

AB 1709 (Veterans Affairs, Chapter 304, Statutes of 2017) required that an armory be offered for sale to a local agency, as defined, prior to being offered for sale to private entities or individuals.

AB 2247 (Williams, Chapter 382, Statutes of 2016) required the Director of DGS, with the approval of the Adjutant General of the CMD, to grant specified cities and school districts an option to purchase the Santa Barbara Armory, Brawley Armory, Indio Armory, Lynwood Armory, and Ponoma Armory, as defined.

SB 273 (Hueso, Chapter 233, Statutes of 2015) authorized DGS to dispose of two surplus state properties, a Department of Conservation field office in Fresno County and a Department of Forestry conservation camp in Shasta County.

SB 536 (Roth, Chapter 355, Statutes of 2015) authorized DGS, with the approval of the Adjutant General, to sell seven specified state armory properties that are no longer considered needed by the California Military Department.

AB 2174 (Committee on Accountability and Administrative Review, Chapter 337, Statutes of 2014) authorized DGS to dispose of certain state surplus property, subject to specified conditions.

SB 1167 (Cogdill, Chapter 324, Statutes of 2010) authorized DGS to dispose of all or any portion of two specified properties.

SB 1481 (Governmental Organization, Chapter 528, Statutes of 2010) required that the proceeds from the sale of armories must be deposited in the Armory Fund and are not required to be used to retire bond debt resulting from the 2004 Economic Recovery Bond Act.

SB 136 (Huff, Chapter 166, Statutes of 2009) authorized DGS to dispose of all or any portion of three parcels of real property.

AB 600 (Hall, 2009) would have authorized DGS to lease the Compton Armory to the City of Compton at fair market value for a period not to exceed five years, with an option to extend the lease to 25 years. (Vetoed by Governor Schwarzenegger)

SB 901 (Governmental Organization, Chapter 610, Statues of 2001) added various parcels, including approximately five acres of the San Diego Armory, to the list of surplus properties included for sale, exchange, or lease by the Director of DGS, as specified.

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

SUPPORT:

None received

OPPOSITION:

None received

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1164

Author:(Gloria) – As Amended Ver:April 4, 2019

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

SUMMARY:

This bill allows the Director of the Department of General Services (DGS) to declare as surplus a property known as the San Diego State Office Building, located at 1350 Front Street, San Diego, in order to permit its disposal by DGS.

FISCAL EFFECT:

No net costs to DGS. Existing law allows DGS’s upfront costs to be paid from the Property Acquisition Law Money Account (if approved by the Department of Finance). The Property Acquisition Law Money Account would be repaid from the property sale proceeds, resulting in no net costs to DGS.

The net property sale proceeds for the San Diego State Office Building would be deposited into the Special Fund for Economic Uncertainties per the California Constitution.

COMMENTS:

1. Purpose. According to the author:

The State of California inefficiently occupies two city blocks in downtown San Diego. The condition of the San Diego State Building has been declining for years. Asbestos has been found and the building itself is underutilized. This bill will start the process for the Department of General Services to sell the State Building in an effort to make way for a more efficient use.

1. Background. Existing law requires state agencies to identify real properties that are excess to their needs and requires them to report this information to DGS. DGS then determines if the properties can be used by other state agencies and, if not, DGS must seek legislative authorization to declare the properties surplus and dispose of them.

The San Diego State Office Building, built in 1963 and located in downtown San Diego, is a seven-story building that houses 12 state entities, some of which are legislative district offices. Other current tenants include the Department of Public Health, the California Public Utilities Commission, the State Water Resources Control Board and the Employment Development Department (the largest occupant), among others.

1. Prior Legislation. AB 1656 (Dickinson), Chapter 451, Statutes of 2014, requires DGS to examine the long-term suitability of state-owned office buildings in the Sacramento region.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 1164 (

Author:Gloria) – As Amended Ver:April 4, 2019

SUBJECT: Surplus state real property: disposal

SUMMARY: Allows the Director of the Department of General Services (DGS) to declare a property known as the San Diego State Building surplus in order to permit its disposal by DGS.

EXISTING LAW:

1. Requires all state agencies to annually review and determine if any lands under their jurisdiction are in excess of programmatic need. This information is reported to DGS, which first determines if any properties can be used by another state agency, and if not, seeks legislative authorization to dispose of them.
2. Directs DGS, pursuant to AB 1656 (Dickinson), Chapter 451, Statutes of 2014, to examine the long-term suitability of state-owned office buildings in the Sacramento region.

FISCAL EFFECT: Unknown

COMMENTS: Current law requires state agencies to identify real properties which are excess to their needs and requires this information to be reported to DGS. DGS is then required to determine other state agency interest and, if there is none, DGS must seek legislative authorization to declare the properties as surplus in order to permit their disposal.

The property that is the subject of this bill, the San Diego State Building, was built in 1963 and is located in downtown San Diego. The seven-story building houses 12 state entities, two of which are district offices belonging to the author of this bill and the Pro Tempore of the Senate. Other current tenants include the Department of Public Health, the California Public Utilities Commission, the State Water Resources Control Board, and the largest occupant, the Employment Development Department, among others. None of these entities have notified DGS of an interest to move out of the building.

According to the author, “the State of California inefficiently occupies two city blocks in Downtown San Diego. The condition of the Downtown San Diego State Building has been declining for years. Asbestos has been found and the building itself is underutilized. This bill will start the process for the Department of General Services to sell the State Building in an effort to make way for a more efficient use.”

The San Diego building has not been identified as excess to state program needs. DGS is currently developing a long-term management plan based on statewide facility condition assessments that were conducted in 2015 for its portfolio of properties outside of the Sacramento region, including the San Diego building. DGS opted to do this after completing its long-range planning study of office space in the Sacramento area as mandated by AB 1656.

According to DGS, this long-range plan will describe options and recommendations for its non-Sacramento office building inventory. This bill may be premature given that future uses for all of this inventory will be discussed in the upcoming report.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Cassie Royce / A. & A.R. / (916) 319-3600