May 11, 2016

West Coast Real Estate Update: May 11, 2016

Holland & Knight Update
Susan Jennifer Booth | Stacie Andra Goeddel | Robert M. Haight Jr. | Karl J. Lott | Douglas A. Praw

San Francisco Requires Solar Panel Installation on New Buildings

Last month, the City of San Francisco passed an ordinance requiring all new buildings to include solar energy systems. California law currently requires 15 percent of the roof area on small and midsize buildings to be "solar ready," meaning unshaded by the building itself, but does not require actual solar energy system installation. The new law requires actual installation of the solar infrastructure and pertains to building developers who apply for building permits after Jan. 1, 2017, for the construction of both residential and commercial buildings with 10 floors or fewer. The solar energy system can be either a solar electric system or a solar water-heating system. The solar energy system must be located on the roof or overhang of the building, on another structure within 250 feet of the building or on covered parking within the building. San Francisco has a stated goal of meeting 100 percent of the city's electricity demand with renewable energy.

Successor Agencies – Not the Underlying Municipality – are Liable for Obligations of Redevelopment Agencies

As has been reported for the past several years, redevelopment agencies in California no longer exist. The operative legislation (AB 26) created "successor agencies" that were given responsibility over certain obligations of the redevelopment agencies. Prior to the dissolution act, a low-income resident in the City of Fontana filed a lawsuit against the Fontana Redevelopment Agency claiming that the agency had failed to provide low- and moderate-income housing. After the enactment of AB 26, the resident added the city as a defendant in its capacity as the “successor agency” and in its separate capacity as a municipality. Fontana successfully argued that under AB 26, only the successor agency could be held liable for the preexisting obligations of the redevelopment agency. The appeals court in Macy v. Fontana stated that under AB 26, the liabilities of dissolved redevelopment agencies are limited to the assets transferred to the successor agency, and those liabilities do not extend to the underlying municipality. 

Los Angeles Comes Up with Jobs and Economic Development Incentives (JEDIs)

The City of Los Angeles is working through legislation to adopt Jobs and Economic Development Incentive (JEDI) zones. In the zones, business would get relief from certain business taxes, earn rebates and benefit from expedited permitting. The zones would serve as a partial replacement for redevelopment agencies and encourage the use of state tools in order to stimulate and support business growth and development. One of these tools, called the Enhanced Infrastructure Financing District (EIFD), assists cities such as Los Angeles by financing construction, improvement and rehabilitation of public infrastructure – e.g., roads, bridges, water reclamation plants, parks and libraries – in a specific area. Another tool authorizes cities to create a Community Revitalization Investment Authority (CRIA) to invest a portion of property taxes gathered from local agencies in order to finance job creation, develop affordable housing and reduce high crime rates. A preliminary framework was developed by the chief legislative analyst; however, it will take some time for the zones to come to fruition. 


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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