SITE SELECTION AND ACQUISITION - 6824

(Revised: 04/2025)

 

One of the core functions of the capital outlay process is the acquisition of real property for the state, such as obtaining land or exercising purchase options. All acquisitions are subject to Property Acquisition Law (Government Code Sections 15850–15866), other than the exceptions listed in Government Code Section 15853).  For acquisitions subject to Property Acquisition Law, PWB and DGS shall manage the acquisition process on behalf of the departments. Even if a specific site is designated for acquisition by the Legislature, PWB must approve the site before any acquisition activities can begin.

Site Selection

What is Site selection? When acquiring real property, the first component of the acquisition phase is site selection. This phase starts when the Finance transfers the portion of acquisition phase funding dedicated to site selection using a Form 22 or a Form 220. Departments that manage their own acquisition negotiations should use their own equivalent to the Form 22 or Form 220.

During site selection, DGS or the department identified in Government Code Section 15853, will initiate any tasks necessary to identify an appropriate parcel (e.g., due diligence, environmental review, site studies, suitability reports, appraisals).

Department’s role:  The department is responsible for obtaining PWB review and approval of site selection prior to expenditure of appropriated funds for subsequent phases. Timeframes for submitting requests for site selection approval to PWB staff are presented in Section 6821 and can be found on the State Public Works Board Calendar at www.spwb.ca.gov.

PWB’s role related to site selection approval:  PWB approves site selection.

PWB agenda package for site selection:  When submitting requests for approval of site selection, the department provides the following:

1. An agenda item that addresses:
   1. The site is within scope, meets the department’s needs, and no significant concerns are raised about the condition of the property. If the site is not within scope, see Section 6834.
   2. Implied dedication has been considered in the appraised value. Implied dedication refers to a public easement which has been created through a history of use. (Determination of implied dedication is case-specific and based on facts involved in a given situation.) Implied dedications may reduce the value of a property.
   3. The project has complied with CEQA, as described in Section 6826.
   4. If improved property is to be acquired, a relocation study has been prepared and adequate funds are available for relocation costs.
   5. The proposed project location is consistent with the state’s planning priorities in accordance with Government Code Section 65041 et seq.

2. A legal description and title report covering each parcel to be selected.
3. A Summary of Conditions Letter or other document demonstrating the completion of Real Estate Due Diligence (Section 6827).
4. DF-14D (See Section 6822)

It is expected that the department will provide the time and place of the PWB meeting and an agenda to the property owner and other interested parties.

After the PWB has approved site selection: Finance will sign the DF-14D and the appropriate state representative will commence formal acquisition negotiations with the property owner.

Acquisition

What is Acquisition: The purchase of real property by the state. Two main ways by which the state acquires land are: (1) a negotiated sale, or (2) eminent domain (see Section 6825). 

The steps below pertain to a negotiated sale.

After PWB approves site selection, DGS enters into negotiations with the property owner to ensure the property acquired is appropriate for the project and in the best interest of the state. If the settlement price exceeds the appraised value, DGS provides a recommendation on how to proceed, which may include:

1. Approval of the acquisition at the higher settlement amount with appropriate justification (and if necessary, request an augmentation).
2. Approval of the acquisition for a portion of the site selected property if it is determined that a lesser portion of the property is sufficient to meet the objectives of the project (see below – when the total acquisition project cost exceeds the appropriation by more than 20 percent).
3. Eminent domain.

Department’s role:  The department is responsible for obtaining PWB review and approval of acquisition prior to expenditure of appropriated funds for subsequent phases. Timeframes for submitting requests for site selection approval to PWB staff are presented in Section 6821 and can be found on the State Public Works Board Calendar at www.spwb.ca.gov.

Supplemental information to acquire a portion of the site selected property:

Submit this item only if the project is solely an acquisition project, the total project costs exceed 20 percent of the amount appropriated, and the client department believes that a lesser portion of the property is sufficient to meet the objectives of the project approved by the Legislature – see Section 13332.11(i) of the Government Code. This item requires a 20-day Legislative notification.

PWB’s role related to acquisition:  PWB approves acquisition.

PWB agenda package for standard acquisition:  When submitting requests for approval of acquisition, the department provides the following:

1. An agenda item that:
   1. Confirms the information provided during site selection approval remains valid.
   2. Provides the purchase price and confirms it is within the appropriated amounts.
   3. Describes the condition of property, any improvements, and Environmental Site Assessments. Discuss any issues identified and the costs associated with resolving those issues. If any of the issues cannot be resolved, indicate why they cannot be resolved and provide justification for recommendation of the acquisition.
   4. States the anticipated close of escrow.
2. Signed Property Acquisition Agreement with Grant Deed.
3. Signed DF-14D (See Section 6822).

PWB agenda package for acquiring less property pursuant to Government Code Section 13332.11 (g). The agenda package includes:

1. All of the elements specified above for a standard acquisition.
2. A written statement explaining why the purchase of lesser property fulfills the Legislature’s intent; and,
3. A draft notification letter to the Legislature.

PWB agenda package for acquiring property with a settlement price that exceeds the appraisal. The agenda package includes:

1. All of the elements specified above for a standard acquisition.
2. An explanation for the increase in the settlement price and justification for the recommendation of the acquisition.
3. If an augmentation is required, a separate agenda package is not needed but the submittal must include the additional information outlined in Section 6833.

After the PWB has approved acquisition: Finance will sign the DF-14D and the Property Acquisition Agreement.

Interim property management by DGS after acquisition: Until property acquired under the Property Acquisition Law is needed, jurisdiction lies with DGS:

1. The Director of General Services may transfer jurisdiction to the client department, if early transfer is in the best interest of the state (e.g., the department requires interim use for parking).
2. DGS may lease all or any part of the property.
3. DGS may remove or demolish structures.
4. DGS may sell or dispose of the improvements.
5. Rentals received are deposited in a special account in the General Fund and, when appropriated by the Legislature, are available to DGS to maintain, improve or care for the property until needed for the purpose acquired (Government Code Section 15863), with the exception of lands acquired for the State Park System (Public Resources Code 5003.17). However, proceeds of sale of improvements are not deposited in the special account or available for maintenance.