Evaluation and Selection Process

Details on the evaluation and selection process for State Commercial Opportunities

Submittal Deadlines and Delivery

All properties on the Commercial Opportunities Map are open for submissions on a rolling basis, unless a specific deadline is posted for a particular site. Please refer to the Map for any site-specific deadlines. Submissions for sites may be transmitted to DGS at any time unless a site-specific deadline is noted on the Map.

Submissions shall be sent in one, complete package (all required components), in PDF format, via email to: StateComOpps@dgs.ca.gov

Initial Screening

Upon receipt of a submission, DGS shall evaluate the proposal for completeness. Submissions that lack material information shall be rejected and the submitter informed that they need to update their proposal and resubmit.

Detailed Evaluation of the Proposal

DGS recognizes that proposals for a given property may be diverse in nature, and contain any number of potential redevelopment scenarios, site uses, and compensation structures. For example, the State may receive a proposal for an agricultural lease, an offer to purchase property to be developed as a solar farm, or a proposal to lease the property for commercial warehouse development, all for the same site and various combinations from competing developers.

Because the State may receive a variety of potential scenarios, uses, and compensation structures, a straightforward analysis and comparison of proposals (in the event there are multiple submissions) is not possible.

Given this, to nonetheless ensure that sites are evaluated fairly, upon receipt of a complete submission, DGS will evaluate that proposal on its merits, and in accordance with the Overall State Goals.

Overall State Goals

Proposals will be evaluated qualitatively for how they demonstrate compliance with the following (in no particular order):

  1. Successful Implementation: here, DGS will evaluate the likelihood that the proposal, and the proposer, can successfully execute on the project. This analysis will include: evaluating the developer’s background, structure, and proven track record for delivering projects similar to what was proposed, as well as the costs, financing structure, assumptions, and availability of funding to carry out the project. Importantly, while DGS recognizes that redevelopment projects do evolve over time, the ability to successfully deliver the proposed project, and not just a description of what might be possible at the site, is the primary evaluation metric here.
  2. Financial Return to the State: here, DGS will evaluate the amount and the structure of the proposed revenue to the State. Importantly, this is not simply an evaluation of the highest initial return – DGS reserves the right to evaluate the proposed rate of return over time (including Net Present Value), and relative to the risks of successful delivery and the underlying assumptions of the project. For example, the sale of a property may be more attractive than an annual profit participation over 20 years via ground lease if the proposed sale could occur in two years while the redevelopment of the leased premises takes 10 years to construct. Alternatively, DGS may determine that the revenue from a long-term lease provides a better return than a short-term sale, as DGS could reinvest that revenue into other properties.
  3. Local/Regional Impact: here, DGS will evaluate the benefits of the proposed use to the community in which the property is located. This evaluation may look at the intrinsic benefit of the project, and it may also take into account local governmental preferences, planning principles, and needs.

Selection Process

Upon receipt of a complete submission, and after evaluating the proposal on its merits as described, DGS will determine whether to a) engage the developer in next steps, b) set a deadline for the site to encourage additional competitive submissions, or c) reject the proposal as written.

If DGS only receives a single submission after the close of a posted deadline (and assuming no extensions for the deadline are given), or DGS determines to proceed with next steps with that developer, DGS will temporarily close the site on the Map and begin good faith discussions with the submitter.

If multiple submissions are received for the same property, DGS will evaluate each proposal separately on its merits and then compare the proposals and rank them. DGS may then proceed with good faith discussions with the highest ranked proposer or may engage with some or all of the proposers through interviews, written question/answer sessions, or any other means to help finalize the ranking.

  • DGS reserves the right to adjust, including shortening or extending, any deadline set for a property.
  • DGS further reserves the right, at its sole discretion, to select one, multiple, or no developers for a site, and reject any or all proposals at any time.

Good Faith Discussions

DGS and the highest ranked proposer(s) will then begin discussions with the intent of entering into a Lease Option Agreement or Purchase and Sale Agreement as applicable. DGS shall provide the proposer(s) with the appropriate template, modified to include the terms of the offer made in the submission(s). A reasonable amount of time, as determined by DGS in its sole discretion, to execute the applicable Agreement shall also be communicated to the developer.

Unless that time period expires (and unless extended by DGS), the parties will enter into the applicable agreement, and DGS will issue a Notice of Selection on its website indicating which developer was awarded the site. The property will also be shown as “no longer available”  on the Map and webpage.

If at any point the parties do not reach agreement, DGS shall determine the best path to addressing the redevelopment of the property, including but not limited to: reopening the site on the Map, engaging another proposer (regardless of rank), or seeking an alternative path towards redevelopment.

  • Note: DGS may determine whether an Exclusive Negotiating Agreement is an appropriate initial step instead of entering directly into a Lease Option Agreement or Purchase and Sale Agreement.