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Asset Management Plan

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Asset Management Efficiencies and Opportunities

The State’s assets fall into three categories

• Surplus property

• Underutilized property

• Assets

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Category #1:Disposal of Surplus Property

Surplus Properties• Not utilized – serves no current

purpose

• Not needed for the State’s future plans

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Current Surplus Property

Fred C. Nelles School for Boys

> Location: Whittier, CA

> Acreage: 74

> Estimated Value: $70 million

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Proposed Surplus Property

Agnews Developmental Center

> Location: San Jose, CA

> Acreage: 86

> Estimated Value: $60 million

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Category #2:Better Utilization of Existing State Property

• Properties are currently in use but underutilized

• Potential exists to maximize usage of the property to achieve its highest and best use

• Potential exists for long-term ground leases

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Long-Term Ground Lease Example

California Institution for Men, Chino

> Location: Chino, CA

> Acreage: 1,700 (60 acres identified as underutilized)

> Estimated Land-Lease Value: $1 million annually (beginning FY 2015-16)

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Category #3: State Assets

• Applies to properties that are utilized but retain significant equity that may be attained by the State through refinance or sale

• Includes office buildings and high-value properties

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Refinancing of State-Owned Buildings

• Potential exists to refinance bond-financed buildings that have increased in value

• Potential revenue: $500 - $600 million

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Sale/Leaseback of State Buildings

• Allows the State to capture a property’s equity and eliminate debt tied to the property

• State would continue to occupy the property per the leaseback agreement

• Eleven buildings identified for potential sale/leaseback

• Potential Revenue: $600 million

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Sale/Leaseback Example

Ronald Reagan Building

> Location: Los Angeles, CA

> Estimated Market Value: $182 million

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Sale of High-Value Properties

Allows for the disposition of existing State assets to free up needed equity

Functions of property do not necessarily change, only ownership

• Opportunities exist for local fairs, community events, and racetracks to continue operation

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High-Value Property Example #1

Cow Palace

> Location: Daly City, CA

> Acreage: 70

> Estimated Value: $40 – $75 million

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High-Value Property Example #2

Orange County Fairgrounds

> Location: Costa Mesa, CA

> Acreage: 190

> Estimated Value: $96 – $180 million

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Summary

The Asset Management Plan

• Presents an opportunity to fundamentally change the way we conduct our business and manage our assets

• Requires multi-year implementation that must begin now

• Could generate billions in General Fund income and savings