BILL ANALYSIS Ó AB 2428 Page 1 ASSEMBLY THIRD READING AB 2428 (Ting) As Amended May 31, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Transportation |10-5 |Frazier, Bloom, |Linder, Baker, Kim, | | | |Brown, Chu, Daly, |Mathis, Melendez | | | |Dodd, Gomez, Medina, | | | | |Nazarian, O'Donnell | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Gallagher, Jones, | | | |Calderon, Daly, |Obernolte, Wagner | | | |Eggman, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Quirk, Santiago, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Directs the California Department of Transportation AB 2428 Page 2 (Caltrans) to lease to the City and County of San Francisco (San Francisco) up to 10 airspace parcels under or adjacent to a freeway or other real property acquired for highway purposes that is within a priority development area, as defined, for park, recreational, or open-space purposes. Specifically, this bill: 1)Makes legislative findings and declarations: a) Regarding the San Francisco Bay Area's sustainable communities strategies, entitled "Plan Bay Area," that was adopted in 2013 and that provides a strategy for meeting 80% of the area's future housing needs in priority development areas (PDAs). b) Describing the relationship between planning for population growth in PDAs and the provision of open space and other amenities that are required to support the growth and provide greater public health and quality of life benefits for citizens and the workforce. c) Asserting that many parcels and rights-of-way beneath and adjacent to the freeways are within PDAs and could be used for open space purposes except that that cost of leasing these parcels from Caltrans is prohibitively expensive. d) Proposing a strategy to support greenhouse gas emission reduction goals by decreasing the cost of providing open space in PDAs via low-cost leases between Caltrans and San Francisco for areas under freeways. 2)Directs Caltrans to offer first right of refusal to lease air AB 2428 Page 3 space or other property to San Francisco, a political subdivision of the city and county, or a state agency for park, recreational, or open-space purposes. 3)For up to 10 parcels, sets the lease amount for park, recreational, or open-space purposes at 10% or less of the average fair market lease value; prescribes how this value is to be calculated. 4)Requires the lessee to fund associated infrastructure, to accept full liability for non-highway uses of the infrastructure, and to fund all non-highway-related maintenance costs associated with the uses. 5)Directs the lease to authorize the lessee, at its discretion, to subsidize its associated maintenance costs by generating revenue under a "limited revenue generation model" so long as any excess revenue is shared 50/50 with Caltrans. 6)Defines "priority development area" to mean 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. FISCAL EFFECT: According to the Appropriations Committee, Caltrans indicates that of the 77 airspace lots in San Francisco that can be leased, 75 are currently leased, including 66 to private entities at market rate for parking or storage. These leases generate $9.25 million annually in revenue to the General Fund, which would be an average of $140,000 per lease. If 10 expiring leases were instead leased for open space or park purposes at 10% of market value, the annual revenue General Fund loss would be $1.25 million. It is unclear to what extent the AB 2428 Page 4 limited revenue generation model would provide additional, offsetting state revenue. COMMENTS: The author introduced this bill to encourage San Francisco to leverage existing Caltrans property so San Francisco can implement its sustainable community strategies by providing green spaces and recreational opportunities for the people of San Francisco. Specifically, the author seeks to ensure San Francisco has first right of refusal to lease state-owned space at 10% of the current market rate. San Francisco is sponsoring this bill. As one of the nation's most densely populated cities, San Francisco lacks the open space needed to provide opportunities to implement its sustainable communities strategies, required by the California Sustainable Communities and Climate Protection Act of 2008, [SB 375, (Steinberg), Chapter 728, Statutes of 2008], including its robust housing development plan of which open spaces are a critical component. San Francisco is looking to leverage unused right-of-way and airspace below and adjacent to state freeways in order to develop green spaces, parks, and recreational facilities. While the authority to enter into these leases is already in existing law, the challenge, apparently, is that Caltrans is obligated to secure fair market value lease rates for these parcels, based on the estimated highest and best use of the property. Not only is this rate too expensive for new open space development, it reportedly tends to attract commercial activities not particularly conducive to San Francisco's plans for its priority development areas, such as parking lots. Committee comments: Although this bill would likely result in lost revenue for Caltrans, it could improve San Francisco's AB 2428 Page 5 ability to successfully implement its greenhouse gas emission-reducing strategies and provide much needed housing for the area. Please see the policy committee analysis for a full discussion of this bill. Analysis Prepared by: Janet Dawson / TRANS. / (916) 319-2093 FN: 0003231