BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 1273 (Ting) - Tidelands and submerged lands: City and County of San Francisco: Pier 30-32: multipurpose venue. Amended: August 13, 2013 Policy Vote: NR&W 7-0 Urgency: No Mandate: No Hearing Date: August 26, 2013 Consultant: Marie Liu This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 1273 authorizes the State Lands Commission (commission) to approve a mixed-use development on Pier 30-32 in San Francisco, including a multipurpose venue, if the commission finds that specific conditions are met. Fiscal Impact: No unreimbursed costs. The commission is likely to incur one-time costs in the high tens of thousands to low hundreds of thousands of dollars over several years to consider the development and related land swaps. There will be some minor costs ongoing to monitor trust-consistent uses of the multipurpose venue. All reasonable costs will be borne by the Port or the City according to a budget which will be agreed upon before the commission's work begins. Background: Chapter 1333 of the Statutes of 1968, otherwise known as the Burton Act, allowed the granting of the Port of San Francisco from the state to the City and County of San Francisco. The Act allows San Francisco to operate, manage, regulate, and improve the granted lands in a manner consistent with the public trust. Allowable activities include: activities for the promotion and accommodation of commerce and navigation; and the construction, maintenance, and operation of public buildings, parks, and public educational and recreational facilities. Revenues from the leases and other uses of the granted lands are deposited into the Harbor Trust Fund (Harbor Fund) and may only be used for the management of San Francisco's granted trust lands. The Burton Act of 1986 grants the tidelands and submerged lands along the San Francisco waterfront to the city and county of San Francisco to be managed and controlled by the San Francisco Port AB 1273 (Ting) Page 1 Commission (Port) in the public's trust. Section 3 of Article X of the California Constitution prohibits all tidelands within two miles of any incorporated city, city and county, or town from being granted or sold to private parties unless the Legislature finds that these tidelands are not used or necessary for navigation. The Legislature may impose conditions on these sales and grants to protect the public interest. AB 418 (Ammiano) Chapter 477/2011 freed the public trust restrictions from Seawall Lot (SWL) 330 as a package of items aimed at allowing the Port to make developments and investments related to the hosting of America's Cup Yacht Race. As a condition of the sale of SWL 330, the Port would be required to impress the public trust on other lands on or adjacent to the San Francisco Bay that has an area equal to or greater than the area of SWL 330 and is useful for trust purposes, as determined by the commission. This approval was a departure from the historic practice of requiring replacement land equal in value. In 2012, San Francisco entered into an agreement with the Golden State Warriors to build a new, LEED Gold, multi-purpose facility at Piers 30-32 capable of being used to host Warriors' home games, other events including conventions, and expanding public access to the waterfront, among other things. The approval for this project involves permitting from Bay Conservation and Development Commission (BCDC), the Board of Supervisors of the City and County of San Francisco, and the State Lands Commission. The project is also subject to CEQA and the project is currently in the early stages of preparing a draft environmental impact report. No approvals or reviews have yet been completed. Proposed Law: This bill would authorize the commission, until January 1, 2024, to approve a mixed-use development with a multipurpose venue on Pier 30-32 in San Francisco so long as specified conditions are met, including: The development is designed to attract people to the waterfront, increase public enjoyment of the Bay, and enhance public use of trust assets and waterfront resources. The mixed-use development provides multiple significant views of the Bay Bridge and the San Francisco Bay including from inside the multipurpose venue. AB 1273 (Ting) Page 2 The multipurpose venue is located to minimize interference with public views of the San Francisco Bay. The mixed-use development is designed to achieve and enhance maximum feasible public access to the bay and minimize fill in a manner that is consistent with the Special Area Plan, the McAteer-Petris Act, and the Bay Plan, as determined by BCDC. The mixed-use development includes a maritime program. Public trust-consistent events, uses, and programming are offered regularly at the site of the mixed-use development at least 15 days of the year, of which at least 3 must include the multipurpose venue. These events shall include free and low-cost visitor-serving events. A community room is available at the site for free or low-cost use by members of the public without preference to local residents or organizations. The development approved for Seawall Lot 330 includes a hotel or other visitor-serving uses that will enhance the public trust uses on the waterfront. The city has filed a notice of determining for the mixed-use development under the California Environmental Quality Act and all necessary local approvals have been given. The mixed-use development project at Pier 30-32 is in the best interest of the state. BCDC, in its determining whether the project is consistent with the Bay Plan and the Special Area Plan, may consider the offsite public benefits proposed as part of the development. The Port would be required to submit a report to the commission at least every five years that describes the trust-related events and programming that have occurred at the site over the past five years and describes the efforts the Port and its tenants have done to publicize the availability of Pier 30-32 for trust-related events, the maritime program established at Pier 30-32, and other information that demonstrates preservation of the public trust by the development. The Port would be required to work with the commission to develop an implementation plan if the commission finds that the development is not being used sufficiently for trust-related events and the Port has not taken effective action to have more events. This bill would also allow the conditions for the sale of SWL AB 1273 (Ting) Page 3 330 under AB 418 to be satisfied by a public trust easement over, or a fee interest in, a portion of the Baylands Parcel. If the easement or fee interest covers an area greater than that required by the sale of SWL 330, the Port may treat the surplus area as a credit for future trust exchanges. All reasonable costs of a study or investigation undertaken by the commission to implement this act shall be borne by the Port or the City of San Francisco. This bill also makes extensive findings and declarations regarding the history of the granted lands in San Francisco, management issues of those lands, and future development plans of those lands. Related Legislation: AB 1389 (Shelley) Chapter 489/2001 authorized the Port to approve a cruise ship terminal development on Piers 30-32, which included general office and retail use. AB 664 (Ammiano) Chapter 314/2011 authorized the America's Cup racing event to be held at Piers 30-32, although the rate ultimately re-located to a different location. The bill declared that the comprehensive re-financing of the district near the piers and the race furthered the objectives of the Public Trust. Staff Comments: The commission under existing law has the ability to approve the mixed-use development and arena described under this bill should it find that the project is consistent with the public trust. AB 1273 would establish minimum criteria for what must be considered in making that trust determination. Additionally, the extensive findings and declarations in this bill also would illustrate Legislative support for the opinion that the project is consistent with the public trust, though the bill leaves that ultimate decision to the commission. The commission will incur costs in reviewing the project against the minimum criteria specified in this bill, particularly regarding the land exchange. These costs are likely to total in the high tens of thousands to the low hundreds of thousands, most likely in the $60,000 to $120,000 range. Under the terms of the bill, all costs would be covered by the Port and the city according to a budget that will be agreed upon before work is begun. Staff notes that it is common for the grantee to pay for AB 1273 (Ting) Page 4 costs involved in a land exchanges and project consideration, the commission's is not always fully compensated. This language would ensure full reimbursement. The author has proposed amendments to remove all references to the Baylands Parcel, including the ability to use surplus land as credit for future land exchanges. Staff notes that although this language is being struck from the bill, such an exchange of the Baylands Parcel and SWL 330 could still be authorized by the commission, should it deem the exchange appropriate, but the Port would not be able to get credit for surplus land purchased. Proposed Author Amendments: Remove all references to the Baylands Parcel and the SFPUC. Page 3, delete lines 8-10, inclusively Page 4, delete lines 30-32, inclusively Page 25, delete lines 8-40, inclusively Page 26, delete lines 1-6, inclusively