Amended in Assembly May 31, 2016

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 Francisco to also authorize leases of property for park, recreational, or open-space purposes, subject to certain additional terms andbegin delete conditions, includingend deletebegin insert conditions. These park, recreational, and open-space leases would be subject toend insert a requirement for the department to lease property located within a priority development area, as defined,begin insert to the city and countyend insert on a right of first refusal basisbegin delete andend deletebegin insert and, for up to 10 parcels,end insert at a specifiedbegin insert below market valueend insert lease amount, and a requirement for the lessee to be responsible for all associated nonhighway 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    1


The Legislature finds and declares all of the

3(a) Chapter 728 of the Statutes of 2008 (SB 375) supports the
4goals of the California Global Warming Solutions Act of 2006
5(AB 32) by requiring each of the state’s 18 metropolitan areas to
6reduce greenhouse gas emissions from cars and light trucks. SB
7375 calls on each metropolitan area to develop a sustainable
8communities strategy (SCS) to accommodate future population
9growth and reduce greenhouse gas emissions.

10(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.

15(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.

20(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.

26(e) There is a direct relationship between development planning
27for population growth in PDAs and the provision of open space
P3    1and other amenities in these areas that will be required to support
2projected growth. San Francisco, like most cities, aims to provide
3adequate quality open space for the broader public health and
4quality of life of its citizens and workforce. As new development
5occurs, it serves additional residents and employees, who, in turn,
6require new, or expanded and enhanced, open space.

7(f) A 2014 San Francisco Citywide Nexus Analysis documents
8this direct relationship between projected population growth and
9the cost of new open-space infrastructure to support growth.
10Providing recreation and open space, such as baseball diamonds,
11soccer fields, parks, playgrounds, tennis courts, flower gardens,
12community gardens, and greenways, is a capital intensive
13undertaking, especially in San Francisco where land availability
14is low and land prices are high.

15(g) To meet the goals of SB 375, more of the future development
16is planned to be walkable and bikeable and close to public transit,
17jobs, schools, shopping, parks, recreation, and other amenities.
18Many of San Francisco’s PDAs are located in areas of San
19Francisco that both lack open space and are home to most of the
20city’s freeways. There are many parcels and right-of-ways beneath
21and adjacent to these freeways and within PDAs that could be used
22for open-space purposes, yet currently the cost of leasing those
23lands from the Department of Transportation (Caltrans) is
24prohibitively high.

25(h) Thus, one strategy for supporting statewide SB 375 goals is
26to decrease the cost of providing additional open space by
27decreasing the cost of land. An innovative intergovernmental
28partnership would engage Caltrans in low-cost leases with San
29Francisco for areas under the freeways that overlap with PDAs
30and San Francisco would, in turn, take on the cost of building and
31maintaining much-needed new open space on those lands to support
32and accommodate future population growth and reduce greenhouse
33gas emissions.

34(i) San Francisco has already demonstrated the viability of
35open-space uses under Caltrans freeways through various
36completed and successful projects. In the Mission Bay Area, San
37Francisco operates several recreational uses under Interstate 280,
38including volleyball and basketball courts, as well as pedestrian
39walkways. In the SoMa West area under the Route 101 Central
40Freeway, San Francisco leased two Caltrans parcels and built a
P4    1very popular dog park and skatepark. The leases for these projects,
2which San Francisco negotiated carefully in partnership with
3Caltrans, could serve as models for a framework of more financially
4feasible open-space projects.

5(j) With an under-freeway open-space framework in place, San
6Francisco could more readily meet its SB 375 goals. If this lower
7land cost opportunity was established, the under-freeway
8open-space projects could become financially feasible and San
9Francisco would be able to localize the decisionmaking process
10for these new open-space uses. This would allow San Francisco
11the flexibility to coordinate and plan locally and to more
12comprehensively plan to accommodate future population growth
13and reduce greenhouse gas emissions.


SEC. 2.  

Section 104.16 of the Streets and Highways Code is
15amended to read:



(a) begin insert(1)end insertbegin insertend insert Any airspace under a freeway, or real property
17acquired for highway purposes, in the City and County of San
18Francisco, that is not excess property, may be leased by the
19department to the city and county or a political subdivision of the
20city and county or a state agency for purposes of an emergency
21shelter or feeding program.begin delete Anyend delete

22begin insert(2)end insertbegin insertend insertbegin insertAnyend insert airspace under or adjacent to a freeway, or other real
23property acquired for highway purposes, in the City and County
24of San Francisco, which is not excess property and is within a
25priority development area, shall be leased on a first right of refusal
26basis by the department to the city and county, a political
27subdivision of the city and county, or a state agency for park,
28recreational, or open-space purposes.

29(b) begin insert(1)end insertbegin insertend insert The lease amount for emergency shelter or feeding
30programs shall be for one dollar ($1) per month.begin delete Theend delete

31begin insert(2)end insertbegin insertend insertbegin insertFor up to 10 parcels, theend insert lease amount for park, recreational,
32or open-space purposes shall be 10 percent or less of the average
33fair market lease value of the applicable parcel, demonstrated
34through documented lease examples determined through either
35the average of fair market leases for the applicable parcel over the
36previous five years, or, in the absence of these recent fair market
37rate examples for the applicable parcel, an average of the fair
38market leases over the previous five years for the three department
39parcels in closest proximity to the applicable parcel.begin delete Theend delete

P5    1begin insert(3)end insertbegin insertend insertbegin insertWith respect to a lease for an emergency shelter or feeding
2program or for park, recreational, or open-space purposes, theend insert

3 lease amount may be paid in advance of the term covered in order
4to reduce the administrative costs associated with the payment of
5the monthly rental fee. The lease shall require the payment of an
6administrative fee not to exceed five hundred dollars ($500) per
7year, unless the department determines that a higher administrative
8fee is necessary, for the department’s cost of administering the

10(c) In the case of a lease for park, recreational, or open-space
11purposes, the lease shall require the lessee to fund and construct
12associated infrastructure, and to accept full responsibility for
13liability associated to the uses, except as otherwise provided in the
14lease. The lease shall require the lessee to be responsible for all
15nonhighway-related maintenance costs associated with those uses,
16except as otherwise provided in the lease. The lease shall authorize
17the lessee, at its discretion, to subsidize its associated maintenance
18costs through generation of revenue under a limited revenue
19generation model, such as from limited parking facilities or retail
20use located on or contiguous to the leased property, if any revenues
21generated that exceed the associated maintenance costs are shared
22with the state, at a rate not less than 50 percent of those excess
23revenues, with that amount to be deposited in the State Highway

25(d) As used in this section, “priority development area” means
26a neighborhood within walking distance of frequent transit service
27that offers a wide variety of housing options and that features
28various amenities, including grocery stores, community centers,
29open space, and restaurants.

30(e) The Legislature finds and declares that the lease of real
31property pursuant to this section serves a public purpose.