Saturday, April 30, 2022

Schipske Faults City Attorney Office for Not Properly Vetting Community Hospital Deal – State Had to Remind City That Property Is Surplus Land

Gerrie Schipske, candidate for City Attorney and former member of the Long Beach City Council, today issued the following statement in response to the disclosure that the State Department of Housing and Community Development reminded the City in March that the Community Hospital property is “surplus” and as such the City must comply with the law which requires such property to be on the open market to affordable housing developers:

“I think the City Attorney should explain why his office did not properly vet the transaction between the City and the Molina Wu Network with the State Department of Housing and Community Development. The Surplus Land Act has been in existence since 1968 and clearly requires local governments to prioritize affordable housing when selling or leasing public lands no longer necessary for agency use. (Government Code § 54220 et seq.)

In 2019, the court held that this requirement applies to both general and charter cities, such as Long Beach. The law requires Long Beach prior to any action disposing of the land to declare the land as either surplus or exempt surplus land at a regular, public meeting. It must also provide written findings that the property is either surplus or exempt and to file those findings with the State at least 30 days before the sale of the land. (Government Code § 54222(f).

The agreement between the City and MWN fails to reference that any of these actions would need to be taken prior to entering an arrangement that allows MWN to take the property as payment by the City for expenditures made by MWN while operating Community Hospital.

While I never supported this agreement, I do think it unfair to MWN that the City Attorney failed to properly advise concerning restrictions under State law. This sends an ominous warning to businesses that want to do business with the City.

The agreement, approved by the City Attorney, also contains another serious omission as it fails to include a clause giving the City Auditor the right to audit MWN’s records and books within six (6) months of the end of each fiscal year and following the expiration or termination of the lease. This clause is included in the lease of the Queen Mary and should be for all leases of City-owned property.” ##

1 comment:

  1. Is it the City's job to advise counterparties on the law? Isn't this something that Molina should have addressed in his own due diligence?