Facing scrutiny, bill on local agency real estate deals advances

A measure that would expand what local agencies can discuss behind closed doors about real estate deals advanced in the state Assembly on Wednesday, with the bill’s author, Assemblyman Reggie Jones-Sawyer (D-Los Angeles), promising to change the proposal to address transparency concerns.

The matter of real estate transactions conducted in secret has particular resonance following the scandal over the Los Angeles Memorial Coliseum, in which a judge ruled that while negotiating a lease with USC, the Coliseum Commission violated open-government laws.

The state’s open-meetings law allows local agencies to hold a closed session with its negotiator to discuss the “price and terms of payment” for a real estate transaction before that deal takes place.

Jones-Sawyer wants to remove the words “of payment” from the law, arguing that there are other nonmonetary factors that go into a real estate transaction and that the agency’s negotiating position could be compromised if those factors were discused in public.

The assemblyman said the measure was inspired by his previous stint as director of real estate for the city of Los Angeles. He said it used to “drive [him] crazy” when the city’s negotiating position was discussed, sometimes inadvertently, during open meetings.

“Let’s say a property is appraised at $1.7 million and we’re authorized to do $2 million,” Jones-Sawyer said in an interview. “Because they know we’re willing to spend up to that, a property owner can hold out.”

But the measure raised alarms among open-government advocates, who said tweaking the law could sweep many conversations behind closed doors.

“By removing those two words, we feel that there would be no cap on an agency’s ability to talk about just about anything they wanted behind closed doors,” said James W. Ewert, general counsel for the California Newspaper Publishers Assn., at the Assembly Local Government Committee hearing Wednesday. “We don’t think that’s good public policy.”

At the hearing, Jones-Sawyer stated the bill’s purpose was not to chip away at open-government laws. “This bill would not give local agencies the power to engage in backroom deals,” he said.

And seeking to address the concerns of the opposition, Jones-Sawyer vowed to “work diligently” to amend the bill, AB 2492. The bill is currently supported by the Assn. of California Health Care Districts, the California Special Districts Assn. and the Assn. of California Water Agencies.

“If we can’t come to any kind of compromise before then, I will make sure it does not go to the floor and continue to work with them next year to get this done,” he said. He later said that by offering to pull the measure, he hoped to show opponents that “the intent of this bill is not to hide anything.”

While several panel members expressed concern with the bill in its current form, the measure passed 5 to 1. It now heads to the Assembly floor.

Assemblyman Marc Levine (D-San Rafael), who cast the sole “no” vote, said he opposed the measure because “the public is clamoring for transparency in open meetings right now.” He said he was unsure an agreement could be found, but said Jones-Sawyer “certainly could have [his[ support in a future vote if he’s able to find a compromise.”