CRE Plans Pushback After Newsom Signs Bill Regulating Warehouse Development

California Gov. Gavin Newsom has signed a bill that influences where new warehouses can be built statewide.

Commercial real estate groups staunchly opposed the measure and are planning potential remedies to bring forward in next year's legislative session.

Assembly Bill 98 outlines requirements for locations of new warehouses, including setbacks of 300 feet from so-called sensitive uses, which include 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.

CRE leaders in California say the bill didn't receive enough input from the business and development community. 

“Hundreds of NAIOP SoCal Members who are directly impacted by AB 98 urged the Governor to veto this costly, burdensome bill, because our concerns were never heard or addressed in the process,” NAIOP SoCal Board President Eric Paulsen said in a statement.

“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,” Paulsen said. 

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

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

“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. 

AB 98 was sponsored by Assembly Member Eloise Gómez Reyes, whose district spans a band of the Inland Empire that includes Rancho Cucamonga, Fontana, Colton and Redlands, and Assembly Member Juan Carrillo, whose district spans the northern LA County areas of Lancaster and Palmdale east to Victorville and Adelanto. 

“AB 98 represents an important step forward for communities impacted by the over proliferation of warehousing,” Reyes said in an emailed statement to Bisnow. “By putting in place new minimums for warehouses built near sensitive receptors we are protecting vulnerable communities without limiting stronger provisions from being adopted by local communities.”

Reyes had previously put forward bills that would place limits on where larger warehouses could be located. 

Newsom announced the bill's signing in a release with a list of roughly 60 other bills he approved. The signature came Sunday, a day before the deadline to sign or veto. The bill passed the California Assembly and Senate in a similar buzzer-beating fashion, the Daily News reported at the time. 

AB 98 will go into effect on Jan. 1.