SB 536 Page 1 Date of Hearing: July 14, 2015
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS Jacqui Irwin, Chair SB 536 (Roth) – As Amended July 8, 2015
SENATE VOTE: 40-0
SUBJECT: Armories.
SUMMARY: Allows the Department of General Services (DGS) with the approval of the Adjutant General of the California Military Department (Military Department) to sell seven specified armory properties and sets terms for how the costs of the sales will be paid. Specifically, this bill:
1) Defines the term “net” proceeds as specified.
2) Requires the Department of General Services, upon appropriation by the Legislature, to use funds from the Property Acquisition Law Money Account for the purposes of selling armory properties.
3) Authorizes the Director of Finance to approve loans from the General Fund to the Property Acquisition Law Money Account.
4) Mandates that the sale of an armory shall be made on an “as is” basis and is exempt from Division 13 (commencing with Section 21100) of the Public Resources Code.
5) Mandates that upon vesting title of the armory to the purchaser or transferee of the armory, the purchaser or transferee shall be subject to any local governmental land use entitlement requirements and to Division 13 (commencing with Section 21100) of the Public Resources Code.
6) Authorizes the Director of General Services, with the approval of the Adjutant General, to sell any of the following properties:
a) Approximately 1.53 acres of real property located in Azusa, California, known as the Azusa-Orange Armory. SB 536 Page 2 b) Approximately 1.78 acres of real property located in Brawley, California, known as the Brawley Armory.
c) Approximately 3.35 acres of real property located in Indio, California, known as the Indio Armory.
d) Approximately 1.03 acres of real property in Lynwood, California, known as the Lynwood Armory.
e) Approximately .50 acres of real property located in Pomona, California, known as the Pomona Park Armory.
f) Approximately 3.03 acres of real property located in Santa Barbara, California, known as the Santa Barbara Armory.
g) Approximately 1.34 acres of real property located in Yreka, California, known as the Yreka Armory.
7) Directs that, with respect to the Azusa-Orange Armory, the Director of DGS, with the approval of the Adjutant General, shall grant to the City of Azusa an option to purchase the Azusa-Orange Armory which shall expire on July 1, 2016.
8) Authorizes the purchase agreement for the sale of the Azusa-Orange Armory to take into consideration the contributory value of all capital improvements made to the Azusa-Orange Armory by the City of Azusa less the value of improvements made in lieu of rents during the term of the use of the Azusa-Orange Armory by the City of Azusa, and any state costs incurred in the sale of the Azusa-Orange Armory to the City of Azusa.
9) Mandates that on after July 1, 2016, the Azusa-Orange Armory shall be offered for sale by general bid and that any purchase agreement shall include terms and conditions determined by the Director of General Services to be in the best interest of the state based on the fair market value of the armory as determined by an appraisal undertaken and approved by the Department of General Services.
EXISTING LAW: Authorizes the Director of General Services, with the approval of the Adjutant General, to lease and sell real property held for armory purposes, subject to legislative SB 536 Page 3 approval. Existing law establishes the Armory Fund and requires that all proceeds from the sale or lease of armories be deposited into the fund, for use, upon appropriation by the Legislature, for specified purposes related to armories.
FISCAL EFFECT: According to Senate Appropriations, there will be administrative costs of up to $160,000 (General Fund).
The Department of General Services estimates the selling expenses for each of the eight armories at about $20,000. The funds will come from the Property Acquisition Law Money (PAL) Account which will be reimbursed from the sale of each property. Generally, money is loaned from the General Fund to the PAL and is then reimbursed upon the sale of the property. The excess revenue from the sale is deposited into the Armory Fund.
COMMENTS: According to the author:
The armories identified in this proposal have reached the end of their service life and are no longer practical or safe for the California National Guard (CNG) Soldiers to assemble and train in. The ongoing maintenance costs required by these armories deplete the Guard’s limited maintenance budget. Pursuant to Military and Veterans Code Section 435, the CMD would like to sell these armories and deposit any net proceeds into the Armory Fund to be used for the future renovation and repair of operational National Guard Armories.
The sale of CMD properties that are no longer usable represents a critical source of income for the Armory Fund, and goes toward fulfilling the State’s responsibility of maintaining the aging inventory of operational armories.
The Military Department, which manages and oversees the CNG, has separate authority to sell property pursuant to MVC 435. Armories are not surplus property, but rather assets that the Military Department must properly manage. When an armory has reached the end of its service life, there is still a critical need for that armory space for troops to assemble and train in; as well as storing the federal equipment assigned to Guard units. This federal equipment is routinely utilized by the unit during a state emergency response mission.
According to the Department’s 2014 report on “The Status of all CNG Armories,” the California Guard’s backlog of needed repairs and renovation for armories is estimated at over $104 million. During the last few years, the State has traditionally only appropriated $2 million annually towards this backlog of armory maintenance and repair. Only a few of California’s armories meet federal requirements, as set forth in the Americans with Disabilities Act, and current state seismic standards. This presents a substantial liability if a citizen were to be injured or a disabled person could not be sheltered due to lack of accessibility.
Primary responsibility for providing armory facilities rests with each individual state. (NGR 405- 80). The great majority of the cost of the California National Guard is borne by the federal government, including equipment and manpower, however, housing National Guard units is almost exclusively California’s responsibility.
Recent Amendments: SB 536 Page 4 Recent amendments not previously heard in any policy committee added the provisions concerning the option to purchase the Azusa-Orange Armory. Committee Staff contacted the author and sponsor for further information.
According to the National Guard:
The Azusa-Orange Armory is the subject of a long-term lease (approximately five years remain on the term) on the property. The City of Azusa uses the leased property for a community center and related functions. The City has made a substantial capital investment in the property to support the functions of the community center.
The law and terms of the lease permit the National Guard to terminate the lease at any time. However, while the need for sale of the armories impacted by this bill is great, it was not deemed so urgent as to merit the immediate eviction of a valuable community asset like a community center. The provisions of this bill unique to the Azusa-Orange Armory are an effort to balance the equities and to guarantee that the state will receive fair market value for the property when it is sold.
REGISTERED SUPPORT / OPPOSITION:
Support
The Adjutant general- California National Guard/California Military Department Department of Finance
Opposition
None on File.
Analysis Prepared by: John Spangler / V.A. / (916) 319-3550