Over the weekend, California Gov. Gavin Newsom signed into law two bills born out of the cold storage warehouse fire in Boyle Heights and the weeks of turmoil that followed it.

Senate Bill 716 by state Sen. María Elena Durazo increases the fines that local governments can levy when nonresidential buildings over 20K SF commit health and safety violations. It will apply immediately to LA County, then statewide as of July 1, 2028.

Assembly Bill 817 by Assemblymember Mark González requires eligible cold storage facilities to maintain contingency funds as a condition of receiving a building permit for a new facility over 20K SF. AB 817 will apply first in a way that limits its application to just the Boyle Heights site and affecting just the permit to rebuild the facility that burned. But on July 1, 2028, it will become effective statewide.

"Boyle Heights showed us the lasting impact a major facility emergency can have on a community," Newsom said in a statement. "These laws strengthen the tools, resources and accountability needed to protect residents and help communities respond when emergencies happen.” 

The fire that consumed the 500K SF cold storage warehouse burned for a week in mid-June, destroying the air quality for miles around and prompting local and state emergency declarations. Once the fires were out, a new problem emerged as flies and rats converged on the neighborhood, drawn by the smell of millions of pounds of food spoiling.

Though a response to the situation was expected, some commercial real estate voices were frustrated that the bills made it this far.

CRE industry organization CREDA SoCal had strongly opposed SB 716 and formally requested a veto of the bill. What Newsom signed "establishes a sweeping statewide penalty structure affecting nearly every nonresidential building in California that is 20,000 square feet or larger, regardless of use," CREDA SoCal said in a statement.

“We do not believe this rushed bill accomplishes the goal it was intended to serve, and we remain concerned about the breadth and ambiguity of its provisions," CREDA SoCal CEO Timothy Jemal said in a statement. Jemal commended González for working with CREDA SoCal to ensure a phased rollout of the legislation.

“We look forward to working through our remaining concerns with Assemblymember González’s office before any statewide expansion takes effect," Jemal said.

It's unclear how much of an impact these new regulations will actually have on cold storage and commercial facilities. With high construction costs and rising interest rates, there's little new cold storage construction happening in California. The average existing facility in the Inland Empire was built in 1974.