State Commercial Development Opportunities

Introduction

The California Department of General Services (DGS), through its Real Estate Services Division (RESD), oversees the State of California’s real estate portfolio to ensure properties are used efficiently and are effectively maximized. As part of this mission, DGS identifies underutilized excess or surplus state-owned properties and offers them for long-term lease or sale through this public Request for Proposal (RFP) portal. This initiative invites private developers to participate with the State in transforming these assets into vibrant, revenue-generating projects that deliver significant public benefit through long-term ground leases or by outright sales. By fostering collaboration between public agencies and private industry, the State’s goal is to unlock the full potential of its holdings while supporting innovation, sustainability, and economic development across California. Available properties can be explored via the interactive GIS map on this webpage.

This program solicits proposals to lease or sell the properties, as individually identified on the web page, to private developers. The core objective is to achieve multi-benefit outcomes while maximizing financial returns to the State. Land leased under a long-term ground lease shall obtain the highest and most certain return under the terms of the ground lease benefiting the State. The State invites proposals from qualified developers who have a proven track record of designing, entitling, developing and successfully operating projects on leased land or who have the requisite experience and financial capacity to purchase identified properties from the State.

Goals for long-term leased properties

Financial Return: Project appreciation, economic return, relative risk, and financial guarantees provided to the State.
Proposer's Financial Capacity: Demonstrated ability to secure and facilitate the necessary project funding.
Qualifications and Experience: Proven track record in designing, entitling, developing, and successfully operating projects, particularly on leased land.
Project Quality: Excellence in proposed architecture, design, materials, and alignment with public goals (e.g., community benefit, public access).

Goal for property sales

Maximization of Return: The highest value sale price.
Profit Participation: Inclusion of a mechanism for the State to share in future project profits or value appreciation.

REQUIRED PROPOSAL DEMONSTRATIONS

Proposals should demonstrate the following:

Project Delivery:
Present a clear and feasible strategy for meeting project timelines, including CEQA and entitlement plans. Prioritize this project within your broader portfolio and commit to exceeding all developer-controlled deadlines.
Financial Feasibility:
Provide robust evidence that the project is not only feasible but likely to succeed financially. Include plans to fund environmental mitigation if needed.
Sustainability and Accessibility:
Commit to implementing sustainability and accessibility practices that exceed California Building Code requirements, where practical and feasible.

GENERAL EXPECTATIONS

The selected developer must:

Accept the property in its current “as-is” condition, without warranties from the State.
Enter into a long-term ground lease or purchase agreement with the State.
Secure all necessary financing, conduct all due diligence, and obtain all necessary permits, entitlements and utility approvals from relevant authorities.
Cover all on-site and off-site development costs, including security, maintenance, remediation, construction, management, and operations.
Pay prevailing wages as required by state law.
Support DGS in complying with CEQA, including exploring streamlining or exemption options and preparing required environmental documents.
Pay any applicable local fees.
Meet all contractual milestones established in the final agreement.

Such costs may include, but are not limited to, State and local jurisdictional entitlement and permitting requirements related to project development including all obligations under the California Environmental Quality Act (CEQA). Any State and/or local jurisdictional entitlement and permitting costs will be the responsibility of the successful RFP proposer.

Submission, Evaluation, and Selection

Submittal Requirements

DGS seeks comprehensive concept proposals that clearly align with the program goals. The Concept Proposal must not exceed 25 pages (excluding attachments).

Required Components

Transmittal Letter (Required)

Legal name and structure of the submitting organization or consortium.
Name, title, signature, address, phone, and email of the authorized representative.
Identification of the Lead Developer (if applicable).
Roles and relationships of all team members. (Note: Post-award changes to the team require State approval and written justification.)

Concept Proposal (25-Page Limit)

Proposed uses, activities, and programs for the property.
Expected project impacts (economic, community, environmental).
Conceptual layout of the site.

Qualifications and Experience

Background and qualifications of the project principal and team members.
Detailed experience with projects of similar scale and complexity over the past 10 years.

Financial Capacity and Strategy

A clear financing strategy, detailing sources and amounts of capital (equity, debt, etc.).
Analysis of how the project will support local financial sustainability.
Anticipated benefits to the State and the local community.

Proposed Rent Structure and Lease Term

A clear and competitive rent proposal. The State will consider:

Base Rent: A fixed annual or monthly amount.
Revenue Sharing: A percentage of gross or net revenues.
Hybrid Models: A combination of base rent and revenue sharing.

Specify the desired lease term, including proposed renewal options.

Project Schedule

A detailed timeline outlining all key redevelopment milestones.

Submittal Deadlines and Delivery

Deadlines: All properties listed as “available” on the Commercial Opportunities map are open for proposal submissions unless a specific site-based deadline is noted on the website.
Delivery: Submit one complete proposal package (all components above) in PDF format via email to: StateComOpps@dgs.ca.gov
Disclaimer: All submissions become the property of DGS.

Evaluation and Selection Process

Upon receipt, the State will review the proposal for completeness. If minimum requirements are met, the State may:

Issue a Notice of Selection.
Set a deadline to encourage additional competitive submissions.
Evaluate multiple proposals comparatively.

The State reserves the right, at its sole discretion, to: shortlist candidates, conduct interviews, request additional information, select one, multiple, or no developers for a site, and reject any or all proposals at any time.

Completeness and Resubmission: Incomplete proposals may be deemed non-responsive and rejected. Rejection does not preclude a developer from revising and resubmitting a proposal for the same site.

Additional Documents and Resources

Developers are strongly encouraged to review the following templates, as the selected parties must be prepared to accept and enter into these contracts:

Lease Option Agreement - Template
Assignment of Lease Option Agreement - Template
Development Ground Lease Agreement - Template
Right of Entry Agreement - Template
Sustainability Contract Template for Renewable Energy Production

OWNERSHIP, LEASE OPTIONS, AND RELATED INFORMATION

Property Ownership and Leases

The State retains fee simple ownership of all properties leased for redevelopment and will not subordinate its fee interest. Developers who meet all requirements will enter into a long-term ground lease, with renewal options contingent on compliance.

Only the developer’s leasehold interest may be used as collateral for financing. All references to excess property must clearly define the leasehold interest and include a legal description.

Applicable Government Codes

DGS leases state property on behalf of state departments under Government Code Sections 11011.2, 11011.4, and 14670. Unless another authority applies, all ground leases must comply with the applicable statutes.

The DGS Director may lease property deemed unnecessary for immediate state use but potentially valuable in the future. DGS may also sell, lease, exchange, or transfer excess property under the Department of Corrections and Rehabilitation’s jurisdiction, as determined to be in the state’s best interest.

Former sites under the jurisdiction of the California Department of Corrections and Rehabilitation (CDCR) CR will be sold or leased pursuant to Government Code 11011.4.

California Environmental Quality Act (CEQA)

The California Environmental Quality Act governs the zoning and development approval process. CEQA may require an Environmental Impact Report (EIR), which the lead agency, often the local city council, decides whether to certify the EIR as complete or adequate. The council determines whether the EIR identifies all the impacts, feasible alternatives, and possible mitigation of a proposed development. This allows cities, counties, regional agencies and local interest groups a clear voice in the CEQA process. Locally elected officials make the final determination of the reuse of surplus state property, following their normal approval process. The lessee shall be responsible for all costs related to obtaining CEQA clearance.

Lease Option Agreements

After selection, developers will first negotiate a lease option agreement (or, in rare cases, an exclusive negotiating agreement). Ground leases will only be executed once financing is secured Once the Lease Option Agreement is fully executed by all parties, the selected developer (Lessee) will apply to the local jurisdiction for environmental review followed by the project approval process. No construction will be allowed on the property until CEQA is cleared and all entitlements are approved.

Subleases and Assignments

Subleasing is not allowed (improvement leases are allowed). For phased or multi-project developments, developers may form separate entities for each phase. The State will structure site control agreements accordingly through assignments.

ADDITIONAL DOCUMENTS AND RESOURCES

The following templates support the development of state-owned properties for commercial opportunities, and the parties selected must be prepared to accept and enter into the following contracts:

Lease Option Agreement - Template
Assignment of Lease Option Agreement - Template
Development Ground Lease Agreement - Template
Right of Entry Agreement - Template
Sustainability Contract Template for Renewable Energy Production

DISCLOSURES

DGS reserves the right to:

Postpone the selection process for any reason.
Withdraw this RFP at any time.
Reject any or all proposals without explanation.
Contract with any, all, or none of the responding development teams.
Retain all submitted materials, which will not be returned.

DGS retains sole discretion to evaluate proposals based on the published criteria. It may accept or reject any proposal, cancel the RFP in whole or in part, and waive minor irregularities. This RFP does not constitute a contract or commitment by DGS to award a lease or sell any property. The State will not pay real estate brokerage fees.

PRIVACY OF RECORDS DISCLAIMER

Under the California Public Records Act (Government Code Section 6251 et seq.), the public has the right to access records unless exempt by law. The State assumes that documents prepared, used, or retained by a state agency are public records. All submissions are subject to disclosure to anyone making a public records request under the Public Records Act.

EXECUTIVE ORDER COMPLIANCE

On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 regarding economic sanctions against Russia and related entities. By submitting a proposal, developers affirm they are not subject to these sanctions. If the State determines a developer is in violation- either before or after contract execution - it may reject the proposal or terminate the contract.