BILL ANALYSIS Ó AB 418 Page 1 Date of Hearing: March 21, 2011 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 418 (Ammiano) - As Introduced: February 14, 2011 SUBJECT : Tidelands and submerged lands: City and County of San Francisco: Pier 70 SUMMARY : Authorizes the State Lands Commission to approve and effectuate a land exchange involving public trust lands within the Pier 70 area in San Francisco for the purpose of facilitating the Port of San Francisco's redevelopment plans. EXISTING LAW : 1)Protects, pursuant to the common law doctrine of the public trust (Public Trust Doctrine), the public's right to use California's waterways for commerce, navigation, fishing, boating, natural habitat protection, and other water oriented activities. The Public Trust Doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways (public trust lands) are to be held in trust by the state for the benefit of the people of California. 2)Establishes that the State Lands Commission (SLC) is the steward and manager of the state's public trust lands. SLC has direct administrative control over the state's public trust lands and oversight authority over public trust lands granted by the Legislature to local public agencies (granted lands). 3)Allows SLC to lease trust lands, enter into boundary line agreements, and in limited circumstances exchange public trust lands for non-trust lands. 4)Grants in trust to the Port of San Francisco (Port), pursuant to the Burton Act (Chapter 1333 of the Statutes of 1968), administrative control over the public trust lands in the harbor of San Francisco for purposes of commerce, navigation, and fisheries and subject to other terms and conditions specified in the act. THIS BILL: AB 418 Page 2 1)Authorizes SLC to approve and effectuate a land exchange involving public trust lands within the Pier 70 area in San Francisco provided in part that: a) The public trust lands exchanged out of the trust (1) have been filled, reclaimed, and are cut off from access to waters of the San Francisco Bay, (2) are relatively useless for public trust purposes, and (3) constitute a relatively small portion of the granted lands within the city. b) The lands to be received into the trust have a monetary value equal to or greater than the monetary value of lands to be exchanged out of the trust. c) The exchange will not substantially interfere with trust uses and purposes, and the lands impressed with the trust will provide significant benefit to the trust. d) The applicable state agencies have approved a risk management plan or remedial action plan sufficient to protect human health and the environment from hazardous substances in the Pier 70 area, the Port is in compliance with the approved plan, and the Port has provided adequate financial assurances to ensure continuing compliance with the plan. e) The Port and San Francisco board of supervisors have approved the exchang. f) The exchange furthers the purpose of the public trust and is in the best interest of the statewide public. 2)Requires SLC to grant the lands received into the trust as a result of the exchange to the Port. These granted lands are to be managed by the Port pursuant to the Public Trust Doctrine and the Burton Act. FISCAL EFFECT : Unknown COMMENTS : 1)Pier 70. Pier 70 is a Port site that is approximately 67 acres located in San Francisco's Central Waterfront, sitting at the foot of Potrero Hill and generally located between AB 418 Page 3 Mariposa and 22nd Street, east of Illinois Street. It is home to a handful of the oldest and most photogenic buildings in San Francisco and receives a tremendous amount of sunshine compared to other parts of the city. This site has been identified as a future National Historic District due to its over 150 years of continuous operations in ship building and repair, the role it has played in the industrialization of the western United States, the war efforts, and architectural and engineering feats. Despite its desirable climate and historical features, Pier 70 is in need of major rehabilitation as a result of dilapidated and unsafe structures as well as contamination that occurred during its long history of industrial use. In 2007, the Port commenced a public process to develop a master plan for Pier 70. In November 2008, the San Francisco voters overwhelmingly approved Proposition D, which creates a variety of financing mechanisms to help fund the Port's renovation and redevelopment of Pier 70. In April 2010, following an extensive public planning process, the Port published its Pier 70 master plan. The Port's vision for Pier 70, as articulated in the master plan, is to "create a vibrant and authentic historic district that re-establishes the historic activity level, activates new waterfront open spaces, creates a center for innovative industries, and integrates ongoing ship repair operations." The master plan specifically calls for maintaining approximately 17 acres of the site for ship repair with the goal of preserving the long-term viability of the ship repair industry. The remaining 50 acres will consist of 700,000 square feet of new uses within historic buildings; 11 acres of open space along the shoreline and up to 9 additional acres of open space integrated within the development; 3 million square feet of compatible infill development; and infrastructure construction and environmental remediation. The master plan's conceptual development program estimates that development will generate 6,000 to 8,000 new jobs and become a major economic stimulus to San Francisco's local economy. At the end of the 2010 legislative session, AB 1199 (Ammiano) was passed, which will allow an infrastructure financing district (IFD) for Pier 70 to capture 90 percent of the growth in property taxes from Port revitalization efforts in the Pier 70 area. AB 1199 will also require the Port to spend at least AB 418 Page 4 20 percent of total Pier 70 IFD revenues on waterfront parks and public access to San Francisco Bay, environmental remediation of the contaminated shoreline, and removal of bay fill. 2)Public Trust Lands. In 1968, the Legislature enacted the Burton Act, which granted the Port administrative control over the public trust lands in the harbor of San Francisco. The Port holds these lands in trust for the benefit of the people of California for public trust purposes. SLC has oversight authority over the Port's public trust land to ensure compliance with the Burton Act and the Public Trust Doctrine. Pier 70 is generally made up of public trust lands. As part of its Pier 70 master plan, the Port would like to develop non-trust uses in areas that it believes are least suitable for public trust uses. The contemplated non-trust development includes cultural, institutional, office, biotech, other commercial, and perhaps a limited amount of residential uses. To legally develop these non-trust uses, the trust must be lifted from various parcels. SLC has authority under Section 6307 of the Public Resources Code to enter into an exchange of filled or reclaimed public trust lands for other lands if SLC finds, among other things, that the lands to be acquired in the exchange will provide a significant benefit to the public trust; the lands given in exchange are filled or reclaimed and have been cut off from water access; and the exchange is for purposes such as enhancing waterfront and nearshore development or redevelopment for public trust purposes. The exchange that is proposed in this bill could be accomplished by SLC exercising its existing authority under Section 6307 of the Public Resources Code. However, approving an exchange through legislation has several advantages. First, the public process associated with the legislation brings additional transparency and public participation to the exchange. Second, the Legislature can provide SLC detailed exchange guidelines that are tailored to the specific areas involved. Lastly, the Legislature can authorize SLC to convey the newly acquired trust lands to the local trustee-without this legislation, SLC would have to lease the land to the local trustee until future granting legislation is passed. AB 418 Page 5 3)Previous Grant Legislation. The Legislature recently approved two public trust land exchange bills involving San Francisco and redevelopment projects. SB 792 (Leno), which passed in 2010, authorized SLC to approve and effectuate a land exchange involving public trust lands located at Candlestick Point and the former Hunters Point Naval Shipyard. SB 815 (Migden), which passed in 2007, authorized SLC to approve and effectuate a land exchange at Treasure Island. AB 418 Page 6 REGISTERED SUPPORT / OPPOSITION : Support City and County of San Francisco Port of San Francisco Opposition None on file Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916) 319-2092