BILL ANALYSIS Ó
AB 418
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 418 (Ammiano)
As Amended September 2, 2011
Majority vote
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|ASSEMBLY: |78-0 |(May 19, 2011) |SENATE: |35-0 |(September 8, |
| | | | | |2011) |
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Original Committee Reference: NAT. RES.
SUMMARY : Authorizes the State Lands Commission (SLC) 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 (Port) redevelopment
plans; Frees the public trust restrictions from Seawall Lot 330
in San Francisco and authorizes the transfer of the property to
a private party.
The Senate amendments :
1)With regard to Pier 70:
a) Make technical amendments regarding the Pier 70 public
trust land exchange;
b) Authorize the Port to hold and administer the lands that
are exchanged out of the public trust (i.e., trust
termination lands); and,
c) Authorize the non-trust use of historical buildings
situated on trust lands at Pier 70 if, among other things,
the executive officer of SLC finds that trust uses
available could not feasibly provide sufficient funds for
the restoration and preservation of the buildings and that
the uses or leases are part of an overall program that
furthers trust purposes.
2)With regard to Seawall Lot 330:
a) Find and declare that Seawall Lot 330 is not needed for
any trust use for the foreseeable future, that the residual
value to the trust of reserving Seawall Lot 330 for trust
uses after the year 2094 is minimal, and that allowing the
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port to obtain a major investment in waterfront
improvements to address its critical capital needs through
the sale of Seawall Lot 330 would provide a substantially
greater benefit to the trust.
b) Free Seawall Lot 330 from the public trust and the
Burton Act trust (Chapter 1333 of the Statutes of 1968) in
perpetuity and authorizes the Port to convey the fee
interest if the consideration received is equal to or
greater than the fair market value of the fee interest
conveyed and is used by the Port for trust purposes.
Consideration may be in the form of improvements to public
trust land in the Port's jurisdiction.
c) Require that if the Port conveys the fee interest in
Seawall Lot 330, it shall cause the public trust to be
impressed upon other lands situated on or adjacent to the
San Francisco Bay that have a total area equal to or
greater than the area of Seawall Lot 330 and have been
determined by SLC to be useful for trust purposes.
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 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, pursuant to the Burton Act,
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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.
5)Prohibits, pursuant to Section 3, Article X of the California
Constitution, the grant or sale of tidelands to any private
persons, partnerships, or corporations if the tidelands are
within two miles of any incorporated city, city and county, or
town in this state, and fronting on the water of any harbor,
estuary, bay, or inlet used for the purposes of navigation.
6)Finds and declares, pursuant to SB 815 (Migden), Chapter 660,
Statutes of 2008, that seawall lot 330, as well as other
specified seawall lots in San Francisco, have ceased to be
useful for the promotion of the public trust and the Burton
Act trust and are freed from the use requirements of the
public trust and the Burton Act until January 1, 2094.
AS PASSED BY THE ASSEMBLY , this bill:
1)Authorized 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 i)
have been filled, reclaimed, and are cut off from access to
waters of the San Francisco Bay, ii) are relatively useless
for public trust purposes, and, iii) 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. These lands are to be
granted to the Port and managed pursuant to the Public
Trust Doctrine and the Burton Act; and
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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, unknown General Fund costs, likely in the hundreds of
thousands for the implementation of the exchanges. These costs
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are fully reimbursable.
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 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.
At the end of the 2010 legislative session, AB 1199 (Ammiano),
Chapter 664, Statutes of 2010, 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 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.
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
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commercial, and perhaps a limited amount of residential uses.
To legally develop these non-trust uses, the trust must be
lifted from various parcels. This bill authorizes the lifting
of the trust from these parcels in exchange for lands that
will provide significant benefit to the trust.
2)Seawall Lot 330.
On December 14, 2010, the America's Cup Event Authority, San
Francisco America's Cup Organizing Committee, and the City and
County of San Francisco entered into the 34th America's Cup
Host and Venue Agreement (Host Agreement), which will bring
the 34th America's Cup to San Francisco Bay. The America's
Cup match is expected in 2013 with preliminary races worldwide
beginning in 2011 and in the San Francisco Bay in 2012. This
event is estimated to generate nearly 9,000 jobs and $1.4
billion in direct spending in the San Francisco Bay area and
California.
As part of the Host Agreement, the City and County of San
Francisco agreed to a term that "unconditionally obligateŬd]"
it to remove in its entirety the common law public trust and
Burton Act trust from Seawall Lot 330. There is another
provision in the Host Agreement that requires the City and
County of San Francisco to make best efforts to remove the
trust. It can be argued that it was inappropriate for San
Francisco to commit to removing the trust since, in general,
the Legislature and SLC are the only entities authorized to
remove the common law public trust and Burton Act trust from
public trust land.
Seawall Lot 330 is a two acre filled tideland parcel located
on The Embarcadero between the Ferry Building and AT&T Park.
The property is part of an engineered seawall built over
public trust lands and is managed in trust by the Port.
In 2008, SB 815 (Migden) authorized the Port to issue nontrust
consistent leases for Seawall Lot 330 to generate revenue for
the preservation of historic piers and historic structures, or
for the construction and maintenance of waterfront plazas and
open space. These nontrust uses of Seawall Lot 330 are
authorized until January 1, 2094, at which time the public
trust restrictions on the land are restored. The Legislature
justified its actions in SB 815 by finding that Seawall Lot
330 has "ceased to be useful for the promotion of the public
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trust and the Burton Act trust, except for the production of
revenue to support the purposes of the Burton Act trust?" A
similar rationale is being used in this bill to justify
terminating the public trust from Seawall Lot 330.
The legal significance of the Legislature finding that a
filled tideland parcel ceases to be useful for the promotion
of the public trust is that, according to the California
Supreme Court in Long Beach v. Mansell (1970) 3 Cal. 3d 462,
the Legislature can then constitutionally terminate the public
trust from the land and transfer it into absolute private
ownership-the Mansell case actually requires that the land be
"valueless for trust purposes." Without such a finding,
filled tidelands must be held in trust for the people of the
state of California and subject to the California
Constitution's prohibition on the grant or sale of tidelands
to any private persons, partnerships, or corporations if the
lands are within two miles of an incorporated city or town.
To determine if Seawall Lot 330 is valueless for trust
purposes, the Legislature may wish to consider the land's
current uses and location to determine if the parcel is in
fact valueless for water related commerce, navigation,
fishing, boating, natural habitat protection, or other water
oriented activities.
Seawall Lot 330 is currently used as a parking lot. The
parking lot can be viewed as something that can service people
who utilize the waterfront for public trust uses. It can also
be viewed as something not specially connected to water
related commerce, navigation, fishing, boating, natural
habitat protection, and other water oriented activities.
In terms of its location, Seawall Lot 330 is just across the
street from the San Francisco Bay and Piers 30-32. Based on
pictures of the area, it appears that the property has
unobstructed views of the bay. In other cases, the City and
County of San Francisco and SLC have asserted that areas at
Hunters Point and Yerba Buena Island that are farther inland
than Seawall Lot 330 serve a public trust purpose by, among
other things, providing scenic views of the bay. It should be
noted that even the bill itself acknowledges that the property
is not completely valueless. Specifically, the bill states
that "the residual value to the trust of reserving Seawall Lot
330 for trust uses after the year 2094 is minimal?" (emphasis
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added).
If the Legislature determines that Seawall Lot 330 is
valueless for public trust purposes and terminates the public
trust restrictions on the land, San Francisco is required to
transfer Seawall Lot 330 to the America's Cup Event Authority,
who would likely develop the property for private uses.
According to the terms of the Host Agreement, the transfer of
Seawall Lot 330 shall be for "no cash consideration" because
of the projected costs for the America's Cup Event Authority's
infrastructure work.
According to the Senate Appropriations Committee, Seawall Lot
330 has an estimated development value of $25 million. The
bill requires the Port to receive equal or greater value for
the property; however, consideration can take the form of the
America's Cup Event Authority's improvements to the Port's
public trust lands. As a condition to this in-kind
consideration, SLC must find, prior to conveyance, that either
the improvement have been completed or that the America's Cup
Event Authority has secured the cost of completing the work by
performance bond, cash deposit, letter of credit, promissory
note secured by a deed of trust on the property, or comparable
security.
The bill also requires the Port to impose the public trust on
two acres of land, which is the size of Seawall Lot 330. The
land must be situated on or adjacent to the San Francisco Bay
and SLC must determine that the land is useful for trust
purposes.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0002826