On August 31, the California legislature adopted AB 98. Governor Newsom has until September 30, 2024, to sign or veto AB 98. If the bill becomes law, it will have impacts on all warehouse developments, regardless of whether there are any sensitive receptors near the potential warehouse site. Because AB 98 was rushed through the legislative process, it has numerous uncertainties, and unclear provisions. Developers who are contemplating the development of warehouse facilities should attempt to “commence a local entitlement process” before September 30, 2024, in order to be exempt from AB 98. Projects that have received an approval from a local government before January 1, 2025, also will be exempt from AB 98. These two exemptions of AB 98 are not perpetual. If “no development activity” occurs within five years of approval of all entitlements, these exemptions expire.

The following summarizes some of the new development standards which will be adopted if AB 98 becomes law:

If a logistics use is not exempt from AB 98, the first set of standards commence on January 1, 2025 and will apply to all logistic uses. These standards include the submission of a truck routing plan, truck route signage, anti-idling signage, positioning of entry gates, and a 2-1 housing replacement obligation if dwelling units will be demolished.

The remaining standards commence January 1, 2026, except for logistics use developments with a loading bay within 900 feet of a sensitive receptor that require a zone change to industrial — for these projects, most of the development standards likely become effective September 30, 2024.

Projects that: (1) cannot be designed to provide more than 900 feet of separation from its loading docks to the nearest sensitive receptor; or (2) are within the Warehouse Concentration Region and require a zone change to industrial, will be subject to the bill’s more restrictive standards.

If a logistics use development cannot meet the specified development standards, the city or county is prohibited from approving the project.

Some of these requirements include: providing a separate heavy truck entrance; siting logistics use developments along qualifying roadways; maintaining specified buffering and screening distances from sensitive receptors; orientation and circulation requirements; and differing requirements of solar installation based on the size of the building, including, for some types of projects, installation of sufficient solar facilities to generate electricity to service the entire project.

In the event that Governor Newsom signs AB 98, we will provide an updated E-Alert which goes into more detail regarding the various restrictions and requirements that will dictate the siting, design, and operation of warehouses.