Amended in Assembly April 7, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2428

Introduced by Assembly Member Ting

February 19, 2016

An act to amend Section 104.16 of the Streets and Highways Code, relating to state highways.


AB 2428, as amended, Ting. State highways: property leases.

Existing law provides that the Department of Transportation has full possession and control of the state highway system, including associated property. Existing law authorizes the department to lease certain property, including the area above or below a state highway, and certain property held for future highway purposes, to public agencies under specified terms and conditions, including specific provisions governing leases of airspace and other property in the City and County of San Francisco for purposes of an emergency shelter or feeding program, at a lease cost of $1 per month and payment of an administrative fee not to exceed $500 per year.

This bill would revise the provisions governing leases of department property in the City and County of San Franciscobegin delete under these financial termsend delete to also authorize leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions, includingbegin insert a requirement for the department to lease property located within a priority development area, as defined, on a right of first refusal basis and at a specified lease amount, andend insert a requirement for the lessee to be responsible for all associatedbegin insert nonhighwayend insert maintenance costs. The bill would provide for the lease to authorize the lessee to subsidize its maintenance costs through a limited revenue generation model, with any revenues generated above the maintenance costs to be shared with the state, as specified.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertThe Legislature finds and declares all of the
2following:end insert

begin insert

(a) Chapter 728 of the Statutes of 2008 (SB 375) supports the
4goals of the California Global Warming Solutions Act of 2006 (AB
532) by requiring each of the state’s 18 metropolitan areas to reduce
6greenhouse gas emissions from cars and light trucks. SB 375 calls
7on each metropolitan area to develop a sustainable communities
8strategy (SCS) to accommodate future population growth and
9 reduce greenhouse gas emissions.

end insert
begin insert

(b) One of the major components of SB 375 is to coordinate the
11regional housing needs allocation process with the regional
12transportation process while maintaining local authority over land
13use decisions. Thus, local officials are key decisionmakers in how
14the provisions of SB 375 are ultimately implemented.

end insert
begin insert

(c) The nine-county Bay Area metropolitan area SCS, Plan Bay
16Area, was adopted in 2013 through a cooperative effort of the
17Metropolitan Transportation Commission (MTC) and the
18Association of Bay Area Governments (ABAG). The Bay Area is
19expected to grow by 2,000,000 people over the next 25 years.

end insert
begin insert

(d) Plan Bay Area provides a strategy for meeting 80 percent
21of the region’s future housing needs in priority development areas
22(PDAs). These are neighborhoods within walking distance of
23 frequent transit service, offering a wide variety of housing options,
24and featuring amenities such as grocery stores, community centers,
25open space, and restaurants.

end insert
begin insert

(e) There is a direct relationship between development planning
27for population growth in PDAs and the provision of open space
28and other amenities in these areas that will be required to support
29projected growth. San Francisco, like most cities, aims to provide
30adequate quality open space for the broader public health and
P3    1quality of life of its citizens and workforce. As new development
2occurs, it serves additional residents and employees, who, in turn,
3require new, or expanded and enhanced, open space.

end insert
begin insert

(f) A 2014 San Francisco Citywide Nexus Analysis documents
5this direct relationship between projected population growth and
6the cost of new open-space infrastructure to support growth.
7Providing recreation and open space, such as baseball diamonds,
8soccer fields, parks, playgrounds, tennis courts, flower gardens,
9community gardens, and greenways, is a capital intensive
10undertaking, especially in San Francisco where land availability
11is low and land prices are high.

end insert
begin insert

(g) To meet the goals of SB 375, more of the future development
13is planned to be walkable and bikeable and close to public transit,
14jobs, schools, shopping, parks, recreation, and other amenities.
15Many of San Francisco’s PDAs are located in areas of San
16Francisco that both lack open space and are home to most of the
17city’s freeways. There are many parcels and right-of-ways beneath
18and adjacent to these freeways and within PDAs that could be
19used for open-space purposes, yet currently the cost of leasing
20those lands from the Department of Transportation (Caltrans) is
21prohibitively high.

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(h) Thus, one strategy for supporting statewide SB 375 goals
23is to decrease the cost of providing additional open space by
24decreasing the cost of land. An innovative intergovernmental
25partnership would engage Caltrans in low-cost leases with San
26Francisco for areas under the freeways that overlap with PDAs
27and San Francisco would, in turn, take on the cost of building and
28maintaining much-needed new open space on those lands to
29support and accommodate future population growth and reduce
30greenhouse gas emissions.

end insert
begin insert

(i) San Francisco has already demonstrated the viability of
32open-space uses under Caltrans freeways through various
33completed and successful projects. In the Mission Bay Area, San
34Francisco operates several recreational uses under Interstate 280,
35including volleyball and basketball courts, as well as pedestrian
36walkways. In the SoMa West area under the Route 101 Central
37Freeway, San Francisco leased two Caltrans parcels and built a
38very popular dog park and skatepark. The leases for these projects,
39which San Francisco negotiated carefully in partnership with
P4    1Caltrans, could serve as models for a framework of more
2financially feasible open-space projects.

end insert
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(j) With an under-freeway open-space framework in place, San
4Francisco could more readily meet its SB 375 goals. If this lower
5land cost opportunity was established, the under-freeway
6open-space projects could become financially feasible and San
7Francisco would be able to localize the decisionmaking process
8for these new open-space uses. This would allow San Francisco
9the flexibility to coordinate and plan locally and to more
10comprehensively plan to accommodate future population growth
11and reduce greenhouse gas emissions.

end insert

begin deleteSECTION 1.end delete
begin insertSEC. 2.end insert  

Section 104.16 of the Streets and Highways Code is
14amended to read:



(a) Any airspace under a freeway, or real property
16acquired for highway purposes, in the City and County of San
17Francisco, that is not excess property, may be leased by the
18department to the city and county orbegin delete anotherend deletebegin insert aend insert political subdivision
19begin insert of the city and countyend insert or a state agency for purposes of an
20emergency shelter or feedingbegin delete program, or for park, recreational,
21or open-space purposes.end delete
begin insert program. Any airspace under or adjacent
22to a freeway, or other real property acquired for highway purposes,
23in the City and County of San Francisco, which is not excess
24property and is within a priority development area, shall be leased
25on a first right of refusal basis by the department to the city and
26county, a political subdivision of the city and county, or a state
27agency for park, recreational, or open-space purposes.end insert

28(b) The leasebegin insert amount for emergency shelter or feeding programsend insert
29 shall be for one dollar ($1) per month.begin insert The lease amount for park,
30recreational, or open-space purposes shall be 10 percent or less
31of the average fair market lease value of the applicable parcel,
32demonstrated through documented lease examples determined
33through either the average of fair market leases for the applicable
34parcel over the previous five years, or, in the absence of these
35recent fair market rate examples for the applicable parcel, an
36average of the fair market leases over the previous five years for
37the three department parcels in closest proximity to the applicable
38parcel.end insert
The lease amount may be paid in advance of the term
39covered in order to reduce the administrative costs associated with
40the payment of the monthly rental fee. The lease shall require the
P5    1payment of an administrative fee not to exceed five hundred dollars
2($500) per year, unless the department determines that a higher
3administrative fee is necessary, for the department’s cost of
4administering the lease.

5(c) In the case of a lease for park, recreational, or open-space
6purposes, the lease shall require the lessee to fund and construct
7begin delete allend delete associated infrastructure, and to accept full responsibility for
8liabilitybegin delete relatedend deletebegin insert associatedend insert tobegin delete those uses.end deletebegin insert the uses, except as
9otherwise provided in theend insert
begin insert lease.end insert The lease shall require the lessee
10to be responsible for allbegin insert nonend insertbegin inserthighway-relatedend insert maintenance costs
11associated with those uses, except as otherwise provided in the
12lease. The lease shall authorize thebegin delete lesseeend deletebegin insert lessee, at its discretion,end insert
13 to subsidize its associated maintenance costs through generation
14of revenue under a limited revenue generation model, such as from
15limited parking facilities begin insertor retail use end insertlocated onbegin insert or contiguous toend insert
16 the leased property, if any revenues generated that exceed the
17associated maintenance costs are shared with the state, at a rate
18not less than 50 percent of those excess revenues, with that amount
19to be deposited in the State Highway Account.

begin insert

(d) As used in this section, “priority development area” means
21a neighborhood within walking distance of frequent transit service
22that offers a wide variety of housing options and that features
23various amenities, including grocery stores, community centers,
24open space, and restaurants.

end insert
begin delete


end delete

26begin insert(e)end insert The Legislature finds and declares that the lease of real
27property pursuant to this section serves a public purpose.