Amended in Senate June 21, 2016

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 and conditions. These park, recreational, and open-space leases would be subject to a requirement for the department to lease property located within a priority development area, as defined, to the city and county on a right of first refusal basis and, for up to 10 parcels, at a specified below market value 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.

P3    1(e) There is a direct relationship between development planning
2for population growth in PDAs and the provision of open space
3and other amenities in these areas that will be required to support
4projected growth. San Francisco, like most cities, aims to provide
5adequate quality open space for the broader public health and
6quality of life of its citizens and workforce. As new development
7occurs, it serves additional residents and employees, who, in turn,
8require new, or expanded and enhanced, open space.

9(f) A 2014 San Francisco Citywide Nexus Analysis documents
10this direct relationship between projected population growth and
11the cost of new open-space infrastructure to support growth.
12Providing recreation and open space, such as baseball diamonds,
13soccer fields, parks, playgrounds, tennis courts, flower gardens,
14community gardens, and greenways, is a capital intensive
15undertaking, especially in San Francisco where land availability
16is low and land prices are high.

17(g) To meet the goals of SB 375, more of the future development
18is planned to be walkable and bikeable and close to public transit,
19jobs, schools, shopping, parks, recreation, and other amenities.
20Many of San Francisco’s PDAs are located in areas of San
21Francisco that both lack open space and are home to most of the
22city’s freeways. There are many parcels and right-of-ways beneath
23and adjacent to these freeways and within PDAs that could be used
24for open-space purposes, yet currently the cost of leasing those
25lands from the Department of Transportation (Caltrans) is
26prohibitively high.

27(h) Thus, one strategy for supporting statewide SB 375 goals is
28to decrease the cost of providing additional open space by
29decreasing the cost of land. An innovative intergovernmental
30partnership would engage Caltrans in low-cost leases with San
31Francisco for areas under the freeways that overlap with PDAs
32and San Francisco would, in turn, take on the cost of building and
33maintaining much-needed new open space on those lands to support
34and accommodate future population growth and reduce greenhouse
35gas emissions.

36(i) San Francisco has already demonstrated the viability of
37open-space uses under Caltrans freeways through various
38completed and successful projects. In the Mission Bay Area, San
39Francisco operates several recreational uses under Interstate 280,
40including volleyball and basketball courts, as well as pedestrian
P4    1walkways. In the SoMa West area under the Route 101 Central
2Freeway, San Francisco leased two Caltrans parcels and built a
3very popular dog park and skatepark. The leases for these projects,
4which San Francisco negotiated carefully in partnership with
5Caltrans, could serve as models for a framework of more financially
6feasible open-space projects.

7(j) With an under-freeway open-space framework in place, San
8Francisco could more readily meet its SB 375 goals. If this lower
9land cost opportunity was established, the under-freeway
10open-space projects could become financially feasible and San
11Francisco would be able to localize the decisionmaking process
12for these new open-space uses. This would allow San Francisco
13the flexibility to coordinate and plan locally and to more
14comprehensively plan to accommodate future population growth
15and reduce greenhouse gas emissions.


SEC. 2.  

Section 104.16 of the Streets and Highways Code is
17amended to read:



(a) (1) Any airspace under a freeway, or real property
19acquired for highway purposes, in the City and County of San
20Francisco, that is not excess property, may be leased by the
21department to the city and county or a political subdivision of the
22city and county or a state agency for purposes of an emergency
23shelter or feeding program.

24(2) Any airspace under or adjacent to a freeway, or other real
25property acquired for highway purposes, in the City and County
26of San Francisco, which is not excess property and is within a
27priority development area, shall be leased on a first right of refusal
28basis by the department to the city and county, a political
29subdivision of the city and county, or a state agency for park,
30recreational, or open-space purposes.

31(b) (1) The lease amount for emergency shelter or feeding
32programs shall be for one dollar ($1) per month.

33(2) For up to 10 parcels, the lease amount for park, recreational,
34or open-space purposes shall be 10 percent or less of the average
35fair market lease value of the applicable begin delete parcel, demonstrated
36through documented lease examples determined through either
37the average of fair market leases for the applicable parcel over the
38previous five years, or, in the absence of these recent fair market
39rate examples for the applicable parcel, an average of the fair
P5    1market leases over the previous five years for the three department
2parcels in closest proximity to the applicable parcel.end delete
begin insert parcel.end insert

3(3) With respect to a lease for an emergency shelter or feeding
4program or for park, recreational, or open-space purposes, the lease
5amount may be paid in advance of the term covered in order to
6reduce the administrative costs associated with the payment of the
7monthly rental fee. The lease shall require the payment of an
8administrative fee not to exceed five hundred dollars ($500) per
9year, unless the department determines that a higher administrative
10fee is necessary, for the department’s cost of administering the

12(c) In the case of a lease for park, recreational, or open-space
13purposes, the lease shall require the lessee to fund and construct
14associated infrastructure, and to accept full responsibility for
15liability associated to the uses, except as otherwise provided in the
16lease. The lease shall require the lessee to be responsible for all
17nonhighway-related maintenance costs associated with those uses,
18except as otherwise provided in the lease. The lease shall authorize
19the lessee, at its discretion, to subsidize its associated maintenance
20costs through generation of revenue under a limited revenue
21generation model, such as frombegin delete limited parking facilities orend delete retail
22use located on or contiguous to the leased property, if any revenues
23generated that exceed the associated maintenance costs are shared
24with the state, at a rate not less than 50 percent of those excess
25revenues, with that amount to be deposited in the State Highway

27(d) As used in this section, “priority development area” means
28a neighborhood within walking distance of frequent transit service
29that offers a wide variety of housing options and that features
30various amenities, including grocery stores, community centers,
31open space, and restaurants.

32(e) The Legislature finds and declares that the lease of real
33property pursuant to this section serves a public purpose.