Newsom Signs Warehouse bill, provoking industry response

Gov. Gavin Newsom and the state’s commercial developers have drawn battle lines over a bill he signed to regulate construction of warehouses.

After the governor signed Assembly Bill 98, commercial real estate groups vowed to fight back with opposing legislation in Sacramento, Bisnow and the San Bernardino Sun reported.

AB 98 sets requirements for locations of new warehouses, including setbacks of 300 feet from homes and schools. In areas that aren’t zoned for industrial use or where the zoning had to be changed to accommodate the property, setbacks are extended to 500 feet.

The bill, co-sponsored by Assemblywoman Eloise Gómez Reyes, D-Colton, and Assemblyman Juan Carrillo, D-Palmdale, came in response to an Inland Empire warehouse boom of buildings of up to 1 million square feet, with trucks that bring pollution, traffic and noise to local neighborhoods.

“AB 98 represents an important step forward for communities impacted by the over proliferation of warehousing,” Reyes said in an emailed statement to Bisnow, adding it would help protect vulnerable communities.

Critics say cities and counties haven’t done enough to require new warehouses to be good neighbors. A coalition of advocacy groups last year called on Newsom to impose a moratorium on new Inland Empire warehouses, according to the Sun.

Instead of supporting AB 98, environmental justice groups opposed it, saying it didn’t go far enough to protect the public.

At the same time, business groups cited the bill as a job killer, while a local government alliance argued it undermined local land-use planning. At the same time, commercial real estate groups say the bill didn’t receive enough input from the business and development community.

“AB 98 is a massive unfunded mandate that will harm our cities, stifle job growth and threaten the economic lifeblood of communities throughout California,” Daniel Parra, president of the League of California Cities, said in a statement. “We are committed to finding a fix to this harmful bill in next year’s legislative session.”

A chapter of the group once known as the National Association for Industrial and Office Parks had urged Newsom to veto the bill as costly, burdensome and not having addressed the concern of businesses.

“We are committed to strengthening the voice of commercial real estate in Southern California and Sacramento and will seek a fix to this harmful bill in next year’s legislative session,” NAIOP SoCal Board President Eric Paulsen said in a statement.

Paul Granillo, CEO of the Inland Empire Economic Partnership, joined statewide business advocacy groups in calling for an immediate overhaul of AB 98 — especially with the prospect of more cargo going to the ports of Los Angeles and Long Beach amid a possible strike by East Coast longshoremen.

“We demand those that wrote and lobbied for AB 98’s passage knowing it was deeply flawed, affects existing warehouses, and is so broadly written it impacts manufacturing and agricultural facilities as well, fix these issues immediately through an open and transparent early action budget bill as soon as the new Legislature convenes,” read a statement issued by co-chairs of the Goods Movement Alliance.

The bill is a response to what many residents see as an overabundance of warehouse construction and associated truck traffic that has helped make the Inland Empire a warehouse mecca with some of the nation’s worst air quality, according to Bisnow.

AB 98 will impose landscaping and screening requirements, such as a wall or landscape berm, to shield warehouses from their neighbors, with landscaping buffers ranging from 50 to 100 feet, according to the Sun.

Depending on their size, new warehouses will have to use zero-emission technology, meet energy efficiency standards and ban trucks from idling their engines.

Warehouses also will have to be built on arterial roads, collector roads, major thoroughfares or local roads primarily used by commercial traffic. And if homes are demolished to make way for a warehouse, the law requires two replacement units of affordable housing for every razed home and money equal to 12 months’ rent paid to every displaced tenant.

But the bill could have unintended consequences that work at odds with its stated goals, according to Matthew Hargrove, CEO of the California Business Properties Association.

“Rather than offering practical solutions, AB 98 imposes statewide mandates that undermine local control, stifles economic growth, negatively impacts the supply chain, and will push more warehouses further away from ports and population centers, increasing greenhouse gas emissions and costs to consumers,” Hargrove said in a statement.

— Dana Bartholomew