BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1273| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1273 Author: Ting (D) Amended: 8/28/13 in Senate Vote: 21 SENATE NATURAL RESOURCES AND WATER COMMITTEE : 7-0, 6/25/13 AYES: Pavley, Cannella, Evans, Fuller, Hueso, Monning, Wolk NO VOTE RECORDED: Jackson, Lara SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/26/13 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg ASSEMBLY FLOOR : 59-10, 5/30/13 - See last page for vote SUBJECT : Tidelands and submerged lands: City and County of San Francisco Pier 30-32 SOURCE : City and County of San Francisco DIGEST : This bill seeks a determination from the Legislature that a proposed multi-purpose venue at Piers 30-32 in San Francisco Bay furthers the purposes of the common law public trust for commerce, navigation, and fisheries. The building on Piers 30-32 would include an arena for the Golden State Warriors, an NBA basketball franchise, which could also serve as a convention facility. There will be limited retail and parking associated with this venue. ANALYSIS : CONTINUED AB 1273 Page 2 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 (i.e., public trust lands) are to be held in trust by the state for the benefit of the people of California. 2.Grants, in trust, state public trust lands to over 80 local public agencies to be managed for the benefit of all the people of the state and pursuant to the Public Trust Doctrine and terms of the applicable granting statutes. 3.Grants to the Port of San Francisco (Port), pursuant to the Burton Act (Act) (Chapter 1333, Statutes of 1968) in trust, 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: 1.Authorizes the State Lands Commission (SLC) to approve a mixed-use development on the San Francisco waterfront at Pier 30-32, that includes a multipurpose venue if it finds specified conditions are met. 2.Provides for what is essentially a monitoring program which is called a "trust program report" by which the Port would assure the SLC at five year intervals that the conditions for public uses at the site are maintained as described above. Those five year reports are to include: A. A list and description of the trust-related events and programming that have occurred at the site of the mixed-use development and in the multipurpose venue over the preceding five-year period, including the dates on which the events occurred or the multipurpose venue was made available for those events, and identifying any free and low-cost visitor-serving events; CONTINUED AB 1273 Page 3 B. A description of the efforts made by the Port, its tenants, and subtenants to publicize the availability of Pier 30-32, including the multipurpose venue, for trust-related events and other efforts undertaken to solicit such events; C. A description of the maritime program on those portions of Pier 30-32 within the purview of the Port or the City, including a list of the facilities constructed, identification of any tenants, licensees, or other operators of the maritime facilities, and a description of the nature and frequency of the maritime use; D. A description of the tenants and use of the non-maritime office space and the use of the public community room on Pier 30-32; and, E. Any other information specifically requested by the SLC that pertains to the City or Port program of trust uses for Pier 30-32 and that is reasonable obtainable by the City or Port. 1.Provides that the Executive Officer of the SLC may require an implementation plan in case he/she determines that the trust program is not being fully implemented. The implementation plan may extend to all the terms and conditions set forth in the governmental approvals of the project, the leases and other contracts affecting use of the site. Those enforcement provisions are triggered by the following two findings that would have to be made by the Executive Officer: A. That Pier 30-32 is not being used for at least 15 trust-related events annually at the site as a whole or is not being used for at least three trust-related events annually at the multipurpose venue, as specified; or that the City or the Port has not implemented the maritime program for Pier 30-32 for its intended purpose; and, B. That the Port, or the City, has not taken effective action to achieve the objectives specified in this bill. 1.Amends previous legislation regarding Piers 30-32 and contains the Legislature's authorization of this project as the trustee CONTINUED AB 1273 Page 4 of the public trust. That authorization is dependent upon the SLC making the findings described above. 2.Contains a finding and declaration that Bay Conservation and Development Commission's (BCDC) regulatory authority is preserved in its Bay Plan and in the Special Area Plan that covers the area in which Piers 30-32 are located. 3.Specifies that, in addition to the findings that the SLC makes pursuant to this bill, that the SLC review of the project is limited to confirming the BCDC actions. This does not confer public trust consistency determination to the SLC because, as drafted, that determination would be made by the Legislature. 4.Contains numerous amendments negotiated between BCDC and the sponsors related to parking, conditions on retail, and a public benefits package that would be developed separately and through a public process. 5.Contains numerous findings and declarations that contain the legislative history and its prior actions with these two piers, the planning processes that have occurred by the Port, by San Francisco, and by BCDC, among other items. 6.Contains numerous findings and declarations in specific to the history, current condition, and estimated expense of preserving Piers 30-32. 7. Allows the conditions for the sale of Seawall Lot (SWL) 330 under AB 418 (Ammiano, Chapter 477, Statutes of 2011) 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. Background The Act allowed the granting of the Port 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 CONTINUED AB 1273 Page 5 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 Act 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 Commission (Commission) in the public's trust. 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 freed the public trust restrictions from 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 Commission 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 SLC. 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 BCDC, the Board of Supervisors of the City and County of San Francisco, and the State Lands Commission. The project is also subject to the California Environmental Quality Act (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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, no CONTINUED AB 1273 Page 6 unreimbursed costs. The SLC 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 SLC's work begins. SUPPORT : (Verified 9/3/13) City and County of San Francisco (source) A. Philip Randolph Institute San Francisco A. Philip Randolph Institute Western Region Alliance for Jobs and Sustainable Growth Asbestos, Lead and Mold Laborers Local Union 67 Bay Area Council Boys and Girls Club of San Francisco Bricklayers and Allied Craftworkers Local 3 Brightline Defense Project Building Owners and Managers Association of San Francisco CAL Insurance and Associates, Inc. California Labor Federation California Sate Pipe Trades Council California State Association of Electrical Workers California State Council of Laborers Charity Cultural Services Center Golden State Warriors Hotel Council of San Francisco International Brotherhood of Electrical Workers Local Union 6 Laborers' International Union of North American Local Union No. 261 Mission Hiring Hall Operating Engineers Local Union No. 3 San Francisco Chamber of Commerce San Francisco Citizens Initiative for Technology and Innovation San Francisco Deputy Sherriff's Foundation San Francisco Fire Department San Francisco Travel Association Sign Display & Allied Crafts Local Union No. 510 Silicon Valley Leadership Group South Market Business Association Sprinkler Fitters and Apprentices Local 483 State Building and Construction Trades Council CONTINUED AB 1273 Page 7 Sustainable Futures United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry United Brotherhood of Carpenters and Joiners of American Local Union No. 22 Western States Council of Sheet Metal Workers Young Community Developers, Inc. OPPOSITION : (Verified 9/3/13) Airport Area Business Association Alameda County Board of Supervisors City of Oakland Mayor of Berkeley Mayor of Oakland Mayor of Richmond Mayor of San Leandro Oakland African American Chamber of Commerce Pacific Merchant Shipping Association Safe Storage San Francisco Baykeeper San Francisco Tomorrow San Francisco Waterfront Alliance Save Oakland Sports Save The Bay Shred Works The Art Sign Company The Sierra Club California The Ultimate Sports Guide ARGUMENTS IN SUPPORT : The author, the City of San Francisco, the Port, and other key supporters of this bill believe that the proposal from the Golden State Warriors for a multi-purpose venue at Piers 30-32 with associated commercial development across the Embarcadero at SWL 330 represents the best opportunity for revitalizing the piers and maximizing public use and enjoyment of the site. The estimate is that this site could host 43 basketball games a year plus 160 or so other events including concerts, conventions, and the like. The Golden State Warriors proposal was made in May 2012, and negotiations between all the affected parties began in the fall of 2012. CONTINUED AB 1273 Page 8 These two piers occupy 13 acres at one of the most desirable locations in San Francisco. Moreover, there is no dispute that these two piers are in disrepair. Currently, they are used a parking lot. The estimate to repair the substructure to make the piers useable for the proposed project is $68 million which the Port cannot afford. That cost would be paid by the major tenant, the Golden State Warriors, in part through revenues generated by the components of the project that would occur on SWL 330. The useful life of the piers is estimated at 10 years. The arena itself would be privately financed. Supporters point out that this project, including the arena, unlike other recent stadium proposals that have been before the Legislature, does not short-circuit environmental review of CEQA or the regulatory approval processes by any affected agency pursuant to existing law. Approvals would be required by the Port, the Board of Supervisors, the SLC, BCDC, and the San Francisco Regional Water Quality Control Board, among others. The heart of the request of the supporters is that the Legislature determine, at this admittedly early stage of project development, that the project is consistent with the public trust doctrine. The supporters believe such a determination is essential to the confidence of the investors and the public agencies involved in the project that the project could ultimately be approved. The sponsors have been engaged in active negotiations with BCDC and the SLC for months, and they strongly believe that all remaining details and regulatory approvals can be successfully completed, even in light of the recent decision of BCDC to oppose the project unless the author agrees to make the bill into a two-year bill. Part of the reason for the optimism is that the bill now reflects agreements between BCDC and the SLC on several key points. The supporters contend that this project is directly analogous to other waterfront projects in California such as the Long Beach Municipal Auditorium, Long Beach Convention Center, AT&T Park in San Francisco, and the San Diego Convention Center. Many other supporters from the San Francisco business and labor community point to the non-public trust economic benefits of the CONTINUED AB 1273 Page 9 project including an estimated 5000 construction jobs and 3000 direct and ongoing jobs. The annual economic output of the project provided by supporters is $500 million across the entire Bay region. ARGUMENTS IN OPPOSITION : In addition to the opposition (unless amended) from BCDC, other opposition to this bill falls into three general categories: (1) affected governments and businesses from the East Bay concerned about regional loss including economic losses, (2) environmental organizations and some maritime and fishing associations who do not believe the project is consistent with the Public Trust doctrine, and (3) those who fundamentally disagree that the project is appropriate for the waterfront. A joint opposition letter from the Mayors of several East Bay Cities (Berkeley, Oakland, Richmond, and San Leandro) argues that this bill diminishes the authority of both the SLC and the Bay Conservation and Development Commission in the project approval process. The letter states that "removing from BCDC or the State Lands Commission any real role in scrutinizing a massive commercial development on the Bay would run directly contrary to the very purposes of these two bodies, each of which has decades of experience balancing the sometimes competing interests of developing and preserving the waters, tidelands and submerged lands under their jurisdictions." The San Francisco Waterfront Alliance, a group formed in reaction to this development proposal, argues the position of BCDC demonstrates that this bill is premature. It also argues that this bill enables an entertainment complex to be built over San Francisco Bay waters, a resource that is jointly shared by nine counties, dozens of cities, millions of citizens, and enjoyed by millions of visitors. San Francisco Baykeeper argues that this bill circumvents BCDC and SLC authority and that the merits of the project should be assessed under normal procedures. It notes that the failure of the bill would not constitute a denial of the project. Save the Bay argues that the construction on the pier and the project would have significant effects to the Bay's water quality. It would support uses that would require less repairs, including consideration of open space or parks. CONTINUED AB 1273 Page 10 The board of the BCDC voted to request that the author convert AB 1273 into a two-year bill. The BCDC resolution states that the author's failure to do so would mean BCDC would outright oppose the bill. A recent staff report from BCDC seriously questioned whether the proposed project is trust consistent. To quote from the document, "The proposed arena is not a traditional public trust use and is proposed on piers that are subject to the public trust, and for this reason BCDC staff believes that the enclosed arena use is not, at its heart, trust consistent. However the State Legislature, subject to judicial review, is the final arbiter of the public trust in California." BCDC staff have noted that some progress has been made in resolving open issues, and a process to resolve some of the remaining open issues is also in place. Project design, including its size, height, and bulk, are all essential to regulatory approvals, and those inter-related issues are still in flux so there are no specific outcomes on that particular open issue. The development of the off-site public benefits package is deferred by mutual agreement of the parties and will be established through a public process. Those are the two most significant unresolved open issues. An array of other issues have been noted by opponents from San Francisco itself. These include traffic, walling off the waterfront in violation of local values, standards, and requirements, a lack of parking for the estimated two million or so annual patrons of the proposed facility, and massive traffic jams when major events at the new arena would conflict with massive crowds at AT&T Park or other major downtown events. Others have raised the question of whether a deadline should be established for the project to be built. Still others have raised the question of whether the major tenant should be required to pay for all or part of the off-site public benefits package or offer some sort of compensation to Oakland to make up for the expected losses at the Oracle Arena there. ASSEMBLY FLOOR : 59-10, 5/30/13 AYES: Achadjian, Alejo, Allen, Atkins, Bigelow, Bloom, Bocanegra, Bradford, Brown, Buchanan, Ian Calderon, Campos, CONTINUED AB 1273 Page 11 Chávez, Chesbro, Conway, Dahle, Daly, Dickinson, Donnelly, Eggman, Fox, Frazier, Beth Gaines, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones, Levine, Linder, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, Quirk-Silva, Salas, Ting, Wagner, Waldron, Weber, Wilk, Williams, John A. Pérez NOES: Ammiano, Blumenfield, Bonilla, Bonta, Cooley, Logue, V. Manuel Pérez, Quirk, Skinner, Wieckowski NO VOTE RECORDED: Chau, Fong, Garcia, Holden, Jones-Sawyer, Lowenthal, Muratsuchi, Rendon, Stone, Yamada, Vacancy RM:nl 9/3/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED