FEATURE ARTICLE

March 2006

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Redevelopment Agency Real Property Transfers at Fair Reuse Value: Santa Ana Transit Village and the Requirement for the Payment of Prevailing Wages

On December 5, 2005, the Director of the Department of Industrial Relations (DIR) issued a decision in Santa Ana Transit Village, PW 2004-035 (December 5, 2005), a highly anticipated case that had been pending for almost one and a half years, ruling that real property transferred by a redevelopment agency at its “fair reuse value,” in most circumstances, will trigger prevailing wage coverage under California’s Public Works laws. The decision has been appealed within the DIR and a ruling is pending. Under the decision, unless a redevelopment agency and the developer buying the property meet certain narrow criteria (which in most cases will not be possible), whenever a redevelopment agency transfers real property at its fair reuse value, it is providing a public subsidy to that developer and prevailing wages under the California Labor Code will be required.