Amended in Assembly April 7, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 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.

LEGISLATIVE COUNSEL’S DIGEST

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 Francisco begin delete under these financial terms end delete to also authorize leases of property for park, recreational, or open-space purposes, subject to certain additional terms and conditions, including begin 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, and end insert a requirement for the lessee to be responsible for all associated begin insert nonhighway end 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:

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begin insert SECTION 1. end insert   

end insert

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

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

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

end insert begin insert

(c) The nine-county Bay Area metropolitan area SCS, Plan Bay
Area, was adopted in 2013 through a cooperative effort of the
Metropolitan Transportation Commission (MTC) and the
Association of Bay Area Governments (ABAG). The Bay Area is
expected 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
of the region’s future housing needs in priority development areas
(PDAs). These are neighborhoods within walking distance of
frequent transit service, offering a wide variety of housing options,
and featuring amenities such as grocery stores, community centers,
open space, and restaurants.

end insert begin insert

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

end insert begin insert

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

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

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

end insert begin insert

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

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

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begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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

104.16.  

(a) Any airspace under a freeway, or real property
acquired for highway purposes, in the City and County of San
Francisco, that is not excess property, may be leased by the
department to the city and county or begin delete another end delete begin insert a end insert political subdivision
begin insert of the city and county end insert or a state agency for purposes of an
emergency shelter or feeding begin delete program, or for park, recreational,
or open-space purposes. end delete begin insert program. Any airspace under or adjacent
to a freeway, or other real property acquired for highway purposes,
in the City and County of San Francisco, which is not excess
property and is within a priority development area, shall be leased
on a first right of refusal basis by the department to the city and
county, a political subdivision of the city and county, or a state
agency for park, recreational, or open-space purposes. end insert

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

(c) In the case of a lease for park, recreational, or open-space
purposes, the lease shall require the lessee to fund and construct
begin delete all end delete associated infrastructure, and to accept full responsibility for
liability begin delete related end delete begin insert associated end insert to begin delete those uses. end delete begin insert the uses, except as
otherwise provided in the end insert begin insert lease. end insert The lease shall require the lessee
to be responsible for all begin insert non end insert begin insert highway-related end insert maintenance costs
associated with those uses, except as otherwise provided in the
lease. The lease shall authorize the begin delete lessee end delete begin insert lessee, at its discretion, end insert
to subsidize its associated maintenance costs through generation
of revenue under a limited revenue generation model, such as from
limited parking facilities begin insert or retail use end insert located on begin insert or contiguous to end insert
the leased property, if any revenues generated that exceed the
associated maintenance costs are shared with the state, at a rate
not less than 50 percent of those excess revenues, with that amount
to be deposited in the State Highway Account.

begin insert

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

end insert begin delete

(d)

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