LGR REPORT
April 2007
“Time past is not believed to have any bearing upon time present or future,
out in the golden land.
Joan Didion - 1966
In our golden land where everything seems to reinvent itself, the REALTOR community should be keenly aware of new laws and regulations which can impact the value of private property.
STATE:
CAR Sponsored Legislation. The California Association of REALTORS® has introduced the following bills for the 2007-2008 session. Attendees at the June Legislative Day in Sacramento may be asked to lobby some or all of these bills.
AB 980 (Calderon D-Industry) Disclosure of Pre-Existing Private Transfer Taxes – This bill will require a separate disclosure to potential home buyers as to whether the home they are considering purchasing requires the payment of a private transfer tax (PTT), the percentage of the home price constituting the PTT, the duration and recipient of the PTT payment, and that it may potentially affect the future resale value of the property. The measure will require the designated recipient of the PTT funds to record a separate disclosure; if they do not do so, the new home buyer will not have to pay the PTT.
AB 1356 (Houston R-Walnut Creek) Agents of Equity Purchasers - Existing law effectively (and inappropriately) precludes legitimate agents from representing investor purchasers of properties that are in foreclosure. The prohibition is the inadvertent result of requiring buyers’ agents to purchase a bond for the sale at twice the value of the property. These bonds are not available. This bill will allow alternate means of demonstrating financial responsibility; either by maintaining E&O insurance in a similar amount or by certifying that the licensee is in good standing with the DRE and that consumers have access to the Real Estate Recovery Fund for fraud that he or she might commit.
AB 1366 (Portantino D- La Canada) Housing Impact Statement Requirement for Local Land Use Decisions - This bill is intended to be a vehicle to generate the exchange of ideas, as well as promulgation of new programs of recognition and reward mechanisms, related to positive regional housing decision-making by local agencies throughout the State. Common state-level goals and policies, combined with incentives and various forms of positive recognition encouraging local government agencies’ inter-agency coordination and cooperation, could enhance regional fulfillment of housing demands and mitigate, if not eliminate, the need for state-mandated regional government regulation. The key to addressing larger-than-local housing issues is to encourage coordination between and among local government agencies.
SB 226 (Negrete McLeod D-Montclair) “Degree Broker” Education Requirements - The Board approved a motion in October 2006 to pursue a clarification of the “specialization in real estate” requirement for the “degree broker” exception to experience requirements. The two part motion is first to seek the clarification by regulation at DRE; if that is unsuccessful, to sponsor legislation to achieve the desired clarification.
SB 343 (Negrete McLeod D-Montclair) Housing Project Application; Pre-Hearing Availability of Staff Reports - Many local governments direct their staff to prepare reports concerning pending actions impacting the citizens of the municipality. Current law does not require that these reports be made available to an “applicant,” or the public, in advance of a hearing or meeting where the application or request for action is scheduled to be reviewed by the local legislative body. SB 343 amends the Brown Act to provide that no action or discussion by a local legislative body on an item listed on its agenda be undertaken unless the analysis related to the agenda item, prepared by a local agency or local legislative body employee, has been made available to the public no later than the date the agency posts the agenda for availability to the public.
SB 670 (Correa D-Santa Ana) Private Transfer Tax Prohibition - The bill will implement the recommendation of the C.A.R. Private Transfer Taxes Task Force and prohibit the imposition of such transfer fees. “Private” transfer “taxes” (PTT’s) are increasingly being used to settle disputes between builders and “no growth” advocates or, in the alternative, by builders to proactively avoid a lawsuit or to smooth development negotiations with the local government. Typically, in return for an agreement by an opponent of the development to not pursue a lawsuit, the builder agrees to the imposition of one or more PTTs through a covenant included in the covenants, conditions and restrictions. These PTTs have totaled as much as 1.75 percent of the purchase price of a home and must be paid for 20 to 25 years or, even, in perpetuity. These taxes must be paid by the first buyer and every subsequent buyer each time the home is sold. Even worse, individual homeowners are being solicited nationwide by a Texas firm selling a pre-packaged business plan which imposes a similar deferred “royalty” payment requirement on each subsequent transfer of an individual’s home.
LOCAL
AZUSA:
Councilman Joe Rocha won Mayor Diane Chagnon's seat. Rocha won with 54 percent of the vote to Chagnon's 46 percent, according to unofficial results. His election leaves a vacant seat on the council. In the crowded six-candidate race for City Council, incumbent Angel Carrillo (25 percent) and former city Treasurer Uriel Macias (29 percent) won the two open seats. Carrillo was appointed in 2005 as the third-highest vote getter after Chagnon jumped from her unexpired council seat to the mayor's chair. The new council will have several options to fill Rocha's open seat, but if history repeats itself, third-place council candidate Robert Gonzales may not have lost. Chagnon also expressed interest in the slot.
RESULTS:
Mayor
Joe Rocha 1843 votes
Diane Chagnon 1601 votes
City Council
Uriel Macias 1771 votes
Angel Carrillo 1558 votes
Robert Gonzales 1010 votes
Edward Alvarez 704 votes
John Dierking 627 votes
Andrea M. Cruz 517
CLAREMONT:
Efforts to buy and preserve Johnson's Pasture as permanent open space have reached an impasse, a representative of several of the property's owners stated. The city's desire to use a $1 million state grant toward the purchase of the hillside land is preventing the two sides from reaching a deal, said Mike Vasilove. His wife, Jacqueline Spizman, is a partial owner and represents a group of owners with a 50 percent stake in the property. To receive the grant, the city must get the owners to cut their selling price from $12 million to $11.5 million - a $500,000 difference that has been blamed by city officials as the hang-up in the sale. But the grant also would prevent the city from buying the property under the threat of eminent domain - a situation that would provide substantial tax benefits to the owners. Erasing eminent domain from the equation would mean owners wouldn't be able to defer significant capital gains taxes, Vasilove said. That tax issue - not necessarily the $500,000 reduction in the selling price - is where some owners are unwilling to compromise, he said. Claremont voters authorized the city to issue up to $12.5 million in general obligation bonds to purchase the 180-acre open-space parcel in November with the passage of Measure S. Earlier that year, the City Council had entered into a binding purchase agreement with the property owners, which set the price of the land at $12 million. The council let the purchase agreement lapse on Dec. 1 in hopes of reaching a new agreement that would allow them to use the $1 million state Wildlife Conservation Board grant.
The March 6th council election result was the third in a row in which voters elected two new council members. Mayor Peter Yao, Sam Pedroza and Linda Elderkin were each elected to four-year terms to the council.
RESULTS
10 of 10 Precincts
City Council-Three Seats
Candidate...................Vote..........Pct.
Sam Pedroza.............3,389... .21.30
Peter Yao* ...............3,259......20.50
Linda Elderkin...........3,165......19.90
Jackie McHenry*.......2,560......16.10
Opanyi Nasiali...........2,451......15.40
Michael Maglio............759....... 4.80
Michael Keenan.. .......338..... ..2.10
COVINA:
Incumbent Councilmember Peggy Delach, and former Councilmember Walt Allen III keep her council job, brought back a former councilman and threw out the city's utility tax in Tuesday's election. Allen who served as both councilman and mayor before leaving office in 2003 to run the California Youth Authority for Gov. Arnold Schwarzenegger was the top vote-getter with 1,707 votes, nearly 47 percent of the total 3,648 ballots cast. Delach was second with 1,191 (32.7 percent), followed closely by another former councilman, Thomas Palmeri, who garnered 1,071 votes, 29.4 percent of the total. Voters resoundingly defeated the measure, 54.8 percent to 37 percent, despite claims by city officials that the loss of revenue to the city could lead to drastic cuts in services. Opponents countered that years of general fund surpluses and new revenue from recently installed red-light cameras have made the tax obsolete. Stephen Millard, who formed a committee opposing the tax, also said that language in the bill would allow the city to tax additional utilities such as broadband Internet services, and that exemptions for low-income residents were being removed. But the federal and state governments have placed a moratorium on taxation of Internet services, and the City Council had instructed staffers to bring back resolutions reinstating the low-income provisions in the event the tax was approved. The language of the bill would have allowed taxation of online phone services such as Vonage, which the federal government does not regulate. Both Allen and Delach said that it was important to educate the public about the consequences of losing the tax, and they each expressed the intent to bring the tax back before the voters in one form or another before it expires.
RESULTS
WALTER ALLEN III 1,707 votes
PEGGY A. DELACH 1,191 votes
THOMAS F. PALMERI 1,071 votes
WILLIAM MASON 737 votes
JORGE MARQUEZ 578 votes
ROSIE FABIAN 470 votes
MARCUS V. CASTRO 359 votes
JAMES MIHALKA 155 votes
JUSTIN T. VANDERPOOL 122 votes
Measure A Utility Users Tax.
Yes on Measure A 1,354 votes
No on Measure A 2,000 votes
EL MONTE:
A city approved Residential Point of Sale Inspection ordinance went into effect on April 1st. This ordinance requires all homes for sale in El Monte to be subject to a city inspection for code violations. All code violations must be abated and mitigated before the close of escrow.
GLENDORA:
After a hard-fought election, the Glendora City Council remained unchanged after votes were counted.
Results placed Councilman Ken Herman first, Councilman Gary Clifford second and Mayor Doug Tessitor third, with more than 3,000 votes each. Challenger and return candidate Kristin Parisi closed in on Tessitor as the absentee ballots were being posted, but ultimately finished fourth and out of the race with 2,527. Planning Commissioner Jeff Johnson took fifth with 2,374, followed by recalled former Mayor John Harrold with 1,974 and Yousef "Joseph" Tweini with 1,197.
RESULTS:
Ken Herman 3,424 votes
Gary M. Clifford 3,337 votes
Doug Tessitor 3,021 viotes
Kristin Parisi 2,527 votes
Jeff Johnson 2,374 votes
John J. Harrold 1,974 votes
Joseph) Yousef Tweini 1,197 votes
ONTARIO:
Officials approved plans to build a Home Depot on the city's western edge. The store, received unanimous approval from the Planning Commission, must hire a security guard to shoo away solicitors - be they immigrant workers or Girl Scouts - as one of its conditions for doing business. The store - which is planned for the northwest corner of Euclid Avenue and Riverside Drive is opposed by many residents in the area who cite quality of life issues and a preference for a small shopping center with a Starbucks and restaurants. The City claims a small shopping center would generate an estimated 10,260 daily visits - more than double the 4,530 expected with the home-improvement store. The home improvement store is the third and final element to be approved for the 32-acre property at the corner of Euclid and Riverside, known as Borba Village. The Home Depot would occupy a 10.6-acre corner. A row of 26 single-family houses, which were approved in June 2005, lines the northern edge of the site. A 198-unit condominium community approved by the City Council in early February will wrap around the store site.
The City has also committed to build a 9,500-capacity arena that will cost about $130 million by the time it opens in October 2008. The five-member council voted unanimously to spend just shy of $73 million for the bulk of the construction. In January, the council voted to spend $17 million on steel and concrete. Ontario has contracted with Turner Construction to build the arena, which will go up on a 37-acre parcel on Concourse Avenue, just north of the 10 Freeway, between Milliken and Haven avenues. Multi-national firm AEG (formerly known as Anschutz Entertainment Group) will operate the Ontario arena. AEG also operates the Staples Center in Los Angeles and the Home Depot Center in Carson. AEG's deal with Ontario calls for the city to receive $1 million in cash per year, 75 percent of all profit from events staged in the arena, and a minor-league hockey team as a primary sports tenant. The deal also calls for an annual minimum of 120 event dates in the arena. Other potential sports tenants include an NBA Development League franchise, as well as an arena football team. The arena will feature 36 luxury suites.
ROSEMEAD:
The city of Rosemead filed a lawsuit against Baldwin Park in an ongoing legal battle over lost sales tax revenue generated from a motorcycle dealership. Rosemead is seeking almost $40,000 worth of sales tax revenue produced from accessory sales that the City alleges Baldwin Park is refusing to pay. Baldwin Park maintains that Rosemead is going beyond the scope of the agreement. Laidlaw's Harley-Davidson left Rosemead in 2003 after more than 40 years in the city to go to Baldwin Park for better freeway access, said Bob Laidlaw, owner of the motorcycle shop. Shortly after, a judge found Baldwin Park to be in violation of a state law that prohibits one city from luring an automobile dealership or big-box retailer from another city using financial assistance if the two communities are in the same market area. Because the new location is in a redevelopment zone, the agency offered it financial incentives. The two cities agreed in 2004 to split the sales-tax revenue until 2013. In 2004, Baldwin Park sent the first tax sharing amount of $40,187, which was based on "motorcycle sales information," according to the complaint. If non-vehicle related sales were included, it would have been an additional $9,556. Another payment was made Oct. 25, 2005, to Rosemead for $34,356, and on Nov. 6, 2006, for $31,307. Both of these payments were again only based on motorcycle sales, according to the complaint.
Polly Low and incumbent Gary Taylor each won seats on the Rosemead City Council. Long-time incumbent Jay Imperial will not be returning to the council after more than 30 years. Imperial came in third in the race for two seats, with 170 fewer votes than Taylor. Candidates Victor Ruiz and Robert Lopez also finished out of the running. In results, Low received the highest vote total, at 1,868. Taylor followed with 1,673, Imperial with 1,503, Ruiz with 1,197 and Lopez with 297.
RESULTS
Polly Low 1,868 votes
Gary A. Taylor 1,673 votes
Jay T. Imperial 1,503 votes
Victor J. Ruiz 1,197 votes
Robert Lopez, Jr. 294 votes
SAN DIMAS:
Curtis Morris, the city's mayor since 1997, won re-election to a two-year term, receiving 63.9 percent of the vote in the city's three-candidate mayoral election. Jack Long, a political newcomer who was sharply critical of Morris and the sitting council during his campaign, finished in second place with 29.9 percent of the vote. Councilman John Ebiner won re-election to a four-year term. Emmett G. Badar, a law enforcement supervisor, will be the first new council member in San Dimas in more than a decade.
Mayor
Curt Morris*.............2,052.......63.87
Jack Long...................961.......29.91
Earl Sounhein..............127....... 3.95
City Council-Two Seats
John Ebiner*............1,880.......35.31
Emmett G. Badar.....1,749.......32.85
Jesse Ash....................932......17.51
Bruce Colburn..............763......14.33