BILL ANALYSIS Ó
AB 2649
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2649 (Ammiano)
As Amended August 22, 2012
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |70-0 |(May 25, 2012) |SENATE: |38-0 |(August 27, |
| | | | | |2012) |
-----------------------------------------------------------------
Original Committee Reference: L. GOV.
SUMMARY : Adds seawall lots 322-1 and 377 to the list of seawall
lots no longer needed for specified trust purposes, and
authorizes the Port of San Francisco (Port) to lease those lots
for nontrust purposes, as specified.
The Senate amendments :
1)Authorize nonpublic trust uses at seawall lot 377 in the same
manner as the bill proposes for seawall lot 322-1.
2)Define "Seawall Lot 337" to mean "that parcel of real property
situated in the city commonly known as seawall lot 337, as
shown on that certain map entitled "revised map of designated
seawall lots," which is reproduced in Section 8 of this act
and is on file with the commission and the port."
3)Clarify that the Port is entitled to apply the value of the
rent credit, waiver, or deferral of rent in connection with a
nontrust lease of seawall lot 337 as an offset against fees or
other exactions or obligations that would otherwise be levied
or imposed by the city on any other development project
located on seawall lot 337, as specified.
4)Require the Port, should it construct structures other than
affordable housing on seawall lot 322-1, to acquire the
approval of the State Lands Commission (SLC) in consultation
with the California Coastal Conservancy, land of equal
monetary value to seawall lot 322-1 that is adjacent to the
water and has dedicated public trust values in exchange for
permanently lifting the trust use restrictions at seawall lot
322-1.
5)Require, if the Port is unable to find available and suitable
AB 2649
Page 2
land to acquire pursuant to 4) above, the Port shall make a
deposit of equal value to seawall lot 322-1 to the Kapiloff
Land Bank Fund, as specified.
6)Make other minor and technical changes.
EXISTING LAW :
1)Establishes the SLC, comprised of the Lieutenant Governor, the
State Controller, and the State Director of Finance.
2)Provides that SLC is the state agency that manages and
protects the state's tide and submerged lands.
3)Requires SLC to carry out its responsibilities consistent with
the Public Trust Doctrine which provides that tide and
submerged lands are reserved for uses associated with
commerce, fishing, navigation, recreation and the environment.
4)Authorizes SLC to administer and control those lands and to
lease, exchange, and otherwise dispose of them as provided by
law, subject to the terms and any considerations established
by SLC for each transfer or exchange of those lands. In most
instances, the Legislature has enacted statutes specifically
authorizing the transfer of particular parcels of state lands
to local jurisdictions for specified public trust uses, such
as navigation improvements, port construction, piers and
wharves, recreation, and public access, and SLC carries out
the transaction and exercises ongoing oversight responsibility
to make sure the grantee complies with the terms of the
transfer and public trust obligations.
5)Grants to the City and County of San Francisco the right,
title, and interest of the State of California in and to
certain tidelands and submerged lands in trust for specified
purposes.
6)Transfers in trust to the City and County of San Francisco,
the interest of the state in and to the Harbor of San
Francisco, under the provisions of the Burton Act and the
Burton Act transfer agreement.
7)Declares, until January 1, 2094, that certain parcels of real
property denominated as the designated seawall lots are free
from the use requirements of the public trust, the Burton Act
AB 2649
Page 3
trust, and the Burton Act transfer agreement, and authorizes
the Port to lease all or a portion of the designated seawall
lots, in specified instances.
AS PASSED BY THE ASSEMBLY , this bill:
1)Declared that seawall lot 322-1 is free from the use
requirements of the public trust, the Burton Act trust, and
the Burton Act transfer agreement for the period between the
effective date of the bill and January 1, 2094, and must be
treated as a designated seawall lot for purposes of the
authority granted to the Port under the same manner as other
designated seawall lots in existing law, as added by SB 815
(Migden), Chapter 660, Statutes of 2007 (known as Chapter
660).
2)Allowed the Port to enter into a nontrust lease for all or any
portion of seawall lot 322-1, subject to the requirements of
existing law that allow seawall lots to be free from use and
trust requirements if specified conditions are met, and
subject to the provisions of this bill.
3)Required the Port to obtain a certificate of appropriateness
or a comparable determination of compatibility of the
development with the historic character of the surrounding
areas, as may be provided under the City and County (City) of
San Francisco's Planning Code.
4)Allowed the Port to provide a rent credit or other waiver or
deferral of rent in connection with either a nontrust lease of
seawall lot 322-1, or, with the approval of the SLC, a lease
of any other designated seawall lot or other port property
that is not subject to public trust or Burton Act trust use
restrictions, that results in an effective rent to the Port
below fair market value, if the SLC finds that both of the
following conditions were met:
a) The nontrust lease is for affordable housing. The lease
may allow other uses, including but not limited to,
commercial uses and market rate housing, provided that no
portion of the rent credit, waiver, or deferral is applied
to the rent for those other uses; and,
b) The Port is entitled to apply the value of the rent
credit, waiver, or deferral as an offset against fees or
AB 2649
Page 4
other exactions or obligations that would otherwise be
levied or imposed by the city on development projects
located on Pier 70, or on other lands under the Port's
jurisdiction, if approved by the SLC, relating to the
projects' impacts on or demand for affordable housing,
including, but not limited to, fees imposed pursuant to the
city's jobs-housing linkage program.
5)Required the Port to provide the SLC with documentation
necessary to support the findings required in 4) above at the
time the Port submits the proposed nontrust lease and other
documentation as required under existing law.
6)Provided that nothing in the bill's provisions shall be
construed as limiting the Port's Authority to provide rent
credits, waivers, or deferrals under a nontrust lease in
exchange for other valuable consideration provided by the
lessee that meets the fair market value requirement of Chapter
660.
7)Provided that nothing in the bill's provisions shall be
construed as limiting the Port's authority under the Burton
Act to use or lease the designated seawall lots for uses
permitted by the Burton Act, subject to any applicable
limitations of state law.
8)Sunsetted the provisions contained in 1) through 4) above as
of January 1, 2094, and required, after that date, the use of
designated seawall lots to be consistent with the public
trust, the Burton Act trust, and the Burton Act transfer
agreement.
9)Required, no later than January 1, 2094, all structures,
buildings, and appurtenances on the designated seawall lots
not consistent with the purposes of the public trust, the
Burton Act trust and the Burton Act transfer agreement to be
removed or modified, including any necessary restoration or
remediation of the seawall lots, to facilitate public trust
uses.
10)Added, to the Burton Act, the following:
a) The preservation or restoration of marine resources
consistent with the primary mission of the San Francisco
Harbor may include the sale or transfer by the City and
AB 2649
Page 5
County
of San Francisco, acting by and through its Port, of the
Port's transferable development rights, as defined in the
city's planning code, in connection with the preservation
of a historic pier or historic structure under port
jurisdiction.
b) To the extent authorized by the planning code, the Port
may sell or transfer development rights associated with a
historic pier or historic resource on port property,
provided that
if the affected Port property is subject to the public trust,
the restriction on the Port's development rights following
transfer shall be for a period not exceeding 66 years.
c) The port shall use the proceeds from a transfer of
development rights solely for the furtherance of the
purposes specified in this bill, which include, without
limitation, reimbursement of the costs of rehabilitation of
a historic pier or historic resource undertaken by any
individual, corporation, limited liability company,
partnership, joint venture, business entity, business
trust, association or other private organization or private
entity.
11)Found and declared that the bill's provisions set no
precedent for any other location or project in the state
because of the unique circumstances that exist at the San
Francisco waterfront.
12)Included a map of the San Francisco waterfront, as specified.
13)Made findings and declarations about the necessity for a
special statute because of the unique circumstances applicable
only to the lands described in this bill.
14)Specified that if any provision of this bill, or its
application to any person, property or circumstance, is held
invalid by any court, the invalidity or inapplicability of
such provision shall not affect any other provision of this
bill, as specified.
15)Made findings and declarations about the need to remove
seawall lot 322-1 from the use requirements of the public
trust, the Burton Act trust, and the Burton Act transfer
AB 2649
Page 6
agreement in the same manner as other designated seawall lots.
16)Made findings and declarations about the lack of affordable
housing and declared that seawall lot 322-1 is well-suited to
support infill affordable housing development.
17)Contained definitions for terms used in the bill.
FISCAL EFFECT : According to the Senate Appropriations
Committee, there is a major loss of a public trust resource
through 2094. There is no fair market value appraisal of
seawall lot 322-1.
COMMENTS : The common law doctrine of the public trust (Public
Trust Doctrine) protects 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, known as public trust lands, are to be held
in trust by the state for the benefit of the people of
California.
Under the Burton Act (Chapter 1333, Statutes of 1968), the state
conveyed certain state tidelands along the San Francisco
waterfront, generally extending from Fisherman's Wharf to
Candlestick Point, to the City and County of San Francisco,
through its Port, in 1969 in trust for public trust and Burton
Act trust purposes, subject to the obligation on the part of the
City and County of San Francisco to assume $55 million in state
debt obligations then existing relating to the waterfront
properties. Typically, private uses such as office space or
housing are not allowed for those lands for which the Burton Act
applies.
The San Francisco waterfront includes a number of seawall lots
controlled by the Port, which are triangular lots on the west
side of the Embarcadero that have been used for decades as
parking lots, a use that is inconsistent with the trust and does
not conform with the surrounding urban landscape. The
Embarcadero cuts these lots off from the water.
SB 815 (Migden), freed trust use restrictions from the seawall
lots along the Embarcadero, and allowed the Port to lease these
properties at market rates for non-trust purposes provided that
AB 2649
Page 7
net proceeds are used to rehabilitate piers or build parks, as
required by the Bay Conservation and Development Commission
(BCDC). These nontrust uses 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 lots had "ceased to be useful for the
promotion of the public trust and the Burton Act trust?"
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 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.
According to the Port, seawall lot 322-1 is a 37,823 square foot
rectangular parcel bounded by Broadway, Front and Vallejo
Streets, located in the Northeast Waterfront Historic District.
Any new non-trust development must meet design standards of
Article 10 of the San Francisco Planning Code. The Waterfront
Land Use Plan considers residential, open space/public access,
general office, hotels, parking and retail to be acceptable uses
of seawall lot 322-1. Previously, the lot was part of a Port
hotel development offering that included seawall lot 324,
however, the selected hotel proposal was not approved. The Port
currently earns $47,152 a month (approximately $570,000
annually) from monthly and daily parking at seawall lot 322-1.
The San Francisco Planning Code provides for the imposition of
Jobs-Housing Linkage Program fees on development of most types
of commercial development to offset the new demand for
affordable housing produced by new employment. Current fees
range from $14.70 per square foot for new research and
development space to $22.06 per square foot for new office
space. Most types of commercial and institutional development
on Port property are subject to fees in the Planning Code,
including Jobs-Housing Linkage fees.
AB 2649
Page 8
This bill, sponsored by the Port, would free seawall lot 322-1
from trust use restrictions, authorize affordable housing at
that site, and permit the City and County of San Francisco to
lease the site below market rate in exchange for Jobs-Housing
Linkage fee credits at another waterfront site. The proposal
would be subject to an agreement by the SLC, and the Port would
offer the site below market rate to the San Francisco Mayor's
Office of Housing.
According to the author, the Port is currently pursuing market
rate housing at several seawall lots that are no longer needed
for trust purposes. The Port has directed staff to explore the
feasibility of developing affordable housing on seawall lots no
longer required for trust purposes as well. For affordable
housing to be feasible on a seawall lot, the Port would need
legislative authorization to lease the site for affordable
housing at a below market rate.
The Port's Pier 70 Master Plan calls for retention of the ship
repair use at Pier 70, environmental remediation of the site,
approximately 20 acres of parks and open space, development of
more than three million square feet of new commercial uses and
nomination of the Pier 70's numerous historic buildings as a
district to the National Register of Historic Places. The
economic analysis demonstrated that the plan has a deficit of
more than $50 million in 2009 dollars. The Port believes that
increased public financing is required to realize the vision of
Pier 70. The Port expects that the Pier 70 project is likely to
owe $30 million in affordable housing fees at Pier 70 under San
Francisco's Jobs-Housing Linkage Program.
This bill allows the Port, subject to approval by the SLC, to
lease a seawall lot that is no longer needed for trust purposes
for affordable housing at a below-market rate, in exchange for
credits equal to the difference between the below-market rate
and market rate, which would offset affordable housing fees
arising from redevelopment of Pier 70 on a dollar-for-dollar
basis.
In addition to this bill, the Port is also currently seeking
legislation to amend the City's Jobs-Housing Linkage ordinance
to provide for an alternative means of allowing the Port to meet
affordable housing obligations with provision of land for
affordable housing purposes.
AB 2649
Page 9
According to the author and sponsor, the "purpose of this act is
to reduce the costs associated with development that will
revitalize the waterfront and benefit the public trust, while
also encouraging affordable housing development on port lands no
longer needed for trust purposes, by authorizing the Port to
grant rent credits or similar incentives for affordable housing
development on seawall lot 322-1 or other Port property where
housing is permitted, provided the Port can apply those credits
to reduce the affordable housing fees or other obligations
imposed on development within the Pier 708 area or on other Port
lands and subject to specified conditions."
Amendments taken in the Senate authorize nonpublic trust uses at
seawall lot 377 in generally the same manner as seawall lot
322-1, and ensure SLC consideration and approval prior to the
issuance of any leases. Amendments provide the Legislature with
greater assurance that affordable housing, the non-trust
purpose, will be constructed on seawall lot 322-1 in conjunction
with the development of Pier 70.
Support arguments: Supporters argue the need for additional
affordable housing and believe that this bill will help create
more opportunities to build affordable housing in San Francisco.
Opposition arguments: None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0005370