Amended in Senate August 1, 2016

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,
P3    1and featuring amenities such as grocery stores, community centers,
2open space, and restaurants.

3(e) There is a direct relationship between development planning
4for population growth in PDAs and the provision of open space
5and other amenities in these areas that will be required to support
6projected growth. San Francisco, like most cities, aims to provide
7adequate quality open space for the broader public health and
8quality of life of its citizens and workforce. As new development
9occurs, it serves additional residents and employees, who, in turn,
10require new, or expanded and enhanced, open space.

11(f) A 2014 San Francisco Citywide Nexus Analysis documents
12this direct relationship between projected population growth and
13the cost of new open-space infrastructure to support growth.
14Providing recreation and open space, such as baseball diamonds,
15soccer fields, parks, playgrounds, tennis courts, flower gardens,
16community gardens, and greenways, is a capital intensive
17undertaking, especially in San Francisco where land availability
18is low and land prices are high.

19(g) To meet the goals of SB 375, more of the future development
20is planned to be walkable and bikeable and close to public transit,
21jobs, schools, shopping, parks, recreation, and other amenities.
22Many of San Francisco’s PDAs are located in areas of San
23Francisco that both lack open space and are home to most of the
24city’s freeways. There are many parcels andbegin delete right-of-waysend delete
25begin insert rights-of-wayend insert beneath and adjacent to these freeways and within
26PDAs that could be used for open-space purposes, yet currently
27the cost of leasing those lands from the Department of
28Transportation (Caltrans) is prohibitively high.

29(h) Thus, one strategy for supporting statewide SB 375 goals is
30to decrease the cost of providing additional open space by
31decreasing the cost of land. An innovative intergovernmental
32partnership would engage Caltrans in low-cost leases with San
33Francisco for areas under the freeways that overlap with PDAs
34and San Francisco would, in turn, take on the cost of building and
35maintaining much-needed new open space on those lands to support
36and accommodate future population growth and reduce greenhouse
37gas emissions.

38(i) San Francisco has already demonstrated the viability of
39open-space uses under Caltrans freeways through various
40completed and successful projects. In the Mission Bay Area, San
P4    1Francisco operates several recreational uses under Interstate 280,
2including volleyball and basketball courts, as well as pedestrian
3walkways. In the SoMa West area under the Route 101 Central
4Freeway, San Francisco leased two Caltrans parcels and built a
5very popular dog park and skatepark. The leases for these projects,
6which San Francisco negotiated carefully in partnership with
7Caltrans, could serve as models for a framework of more financially
8feasible open-space projects.

9(j) With an under-freeway open-space framework in place, San
10Francisco could more readily meet its SB 375 goals. If this lower
11land cost opportunity was established, the under-freeway
12open-space projects could become financially feasible and San
13Francisco would be able to localize the decisionmaking process
14for these new open-space uses. This would allow San Francisco
15the flexibility to coordinate and plan locally and to more
16comprehensively plan to accommodate future population growth
17and reduce greenhouse gas emissions.


SEC. 2.  

Section 104.16 of the Streets and Highways Code is
19amended to read:



(a) (1) Any airspace under a freeway, or real property
21acquired for highway purposes, in the City and County of San
22Francisco, that is not excess property, may be leased by the
23department to the city and county or a political subdivision of the
24city and county or a state agency for purposes of an emergency
25shelter or feeding program.

26(2) Any airspace under or adjacent to a freeway, or other real
27property acquired for highway purposes, in the City and County
28of San Francisco, which is not excess property and is within a
29priority development area, shall be leased on a first right of refusal
30basis by the department to the city and county, a political
31subdivision of the city and county, or a state agency for park,
32recreational, or open-space purposes.

33(b) (1) The lease amount for emergency shelter or feeding
34programs shall be for one dollar ($1) per month.

35(2) For up to 10 parcels, the lease amount for park, recreational,
36or open-space purposes shall be 10 percent or less of the average
37fair market lease value of the applicable parcel.

38(3) With respect to a lease for an emergency shelter or feeding
39program or for park, recreational, or open-space purposes, the lease
40amount may be paid in advance of the term covered in order to
P5    1reduce the administrative costs associated with the payment of the
2monthly rental fee. The lease shall require the payment of an
3administrative fee not to exceed five hundred dollars ($500) per
4year, unless the department determines that a higher administrative
5fee is necessary, for the department’s cost of administering the

7(c) In the case of a lease for park, recreational, or open-space
8purposes, the lease shall require the lessee to fund and construct
9associated infrastructure, and to accept full responsibility for
10liability associated to the uses, except as otherwise provided in the
11lease. The lease shall require the lessee to be responsible for all
12nonhighway-related maintenance costs associated with those uses,
13except as otherwise provided in the lease. The lease shall authorize
14the lessee, at its discretion, to subsidize its associated maintenance
15costs through generation of revenue under a limited revenue
16generation model, such as from retail use located on or contiguous
17to the leased property, if any revenues generated that exceed the
18associated maintenance costs are shared with the state, at a rate
19not less than 50 percent of those excess revenues, with that amount
20to be deposited in the State Highway Account.

21(d) As used in this section, “priority development area” means
begin delete a neighborhood within walking distance of frequent transit service
23that offers a wide variety of housing options and that features
24various amenities, including grocery stores, community centers,
25open space, and restaurants.end delete
begin insert an area identified in a sustainable
26communities strategyend insert
begin insert developed pursuant to Section 65080 of the
27Government Code.end insert

28(e) The Legislature finds and declares that the lease of real
29property pursuant to this section serves a public purpose.