Amended in Assembly April 13, 2016

Amended in Assembly April 5, 2016

Amended in Assembly March 29, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2797

Introduced by Assembly Member Chiu

February 19, 2016

An act to amend Sections 4 and 7 of, and to add Section 4.5 to, Chapter 660 of the Statutes of 2007, relating to tidelands and submerged lands.

LEGISLATIVE COUNSEL’S DIGEST

AB 2797, as amended, Chiu. City and County of San Francisco: Mission Bay South Project: redevelopment plan.

Existing law grants to the City and County of San Francisco the right, title, and interest of the state in and to certain tidelands and submerged lands in trust for certain purposes. Under existing law, the Burton Act, and the Burton Act transfer agreement, the interest of the state in and to the Harbor of San Francisco was transferred in trust to the City and County of San Francisco. The State Lands Commission has jurisdiction over tidelands and submerged lands of the state.

Existing law declares that, until January 1, 2094, certain parcels of real property denominated as the designated seawall lots are free from the use requirements of the public trust, the Burton Act trust, and the Burton Act transfer agreement, and authorizes the San Francisco Port Commission to lease all or a portion of the designated seawall lots for nontrust uses if specified conditions are met, including that the lease shall terminate no later than January 1, 2094.

This bill would revise those conditions to specify that a nontrust lease shall terminate no later than January 1, 2094, or the date that is 75 years after the initial occupancy date for the leased site or development parcel. The bill would also prescribe the boundaries of a specified seawall lot for purposes of the Mission Bay South redevelopment plan. The bill would authorize the port to use its nontrust lease revenues from specified development parcels in a specified seawall lot to make port advances, as defined, to fund specified infrastructure if the commission begin delete makes specified findings related to the use of the development parcels end delete begin insert has approved the port advances end insert and complies with certain procedures for the disposition of those parcels, as prescribed.

This bill would make legislative findings and declarations as to the necessity of a special statute for the waterfront property at the Mission Bay South redevelopment area in the City and County of San Francisco.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

For the purposes of this act the following terms
have the following meanings:

(a) “Assembly Bill 26” means Chapter 5 of the First
Extraordinary Session of the Statutes of 2011, in which certain
provisions were amended by Chapter 26 of the Statutes of 2012,
effective as provided in California Redevelopment Assn. v.
Matosantos (2011) 53 Cal.4th 231.

(b) “Assembly Bill 2649” means Chapter 757 of the Statutes of
2012.

(c) “Board of supervisors” means the Board of Supervisors of
the City and County of San Francisco.

(d) “Burton Act” means Chapter 1333 of the Statutes of 1968,
as amended, which authorized the state to convey to the city, in
trust and subject to certain terms, conditions, and reservations, the
state’s interest in certain tidelands, including filled lands.

(e) “Burton Act lands” means the tidelands that the state granted
to the city under the Burton Act, including the San Francisco
waterfront from the Hyde Street pier to India Basin.

(f) “Burton Act transfer agreement” means the agreement dated
January 24, 1969, between the state and the city, relating to the
transfer of the Burton Act lands from the state to the city, and any
amendments to that agreement in accordance with its terms.

(g) “Burton Act trust” means the statutory trust imposed by the
Burton Act on Burton Act lands and lands dedicated to or acquired
by the city as assets of the trust.

(h) “Capital plan” means the 10-year capital plan for port land
prepared in accordance with Sections 2.30 and 2.31 of the San
Francisco Administrative Code, adopted in 2007 by the board of
supervisors, as amended.

(i) “CFD law” means the Mello-Roos Community Facilities
Act of 1982 (Chapter 2.5 (commencing with Section 53311)) of
Part 1 of Division 2 of Title 5 of the Government Code) or the San
Francisco Special Tax Financing Law (San Francisco Admin. Code
Ch. 43, Art. X), as applicable.

(j) “City” means the City and County of San Francisco, a charter
city and county, and includes the port.

(k) “Commission” means the State Lands Commission.

(l) “Designated seawall lot” or “designated seawall lots” means
any of those parcels of real property situated in the city that are
defined as designated seawall lots in Senate Bill 815 or Assembly
Bill 2649, as those parcels may be modified by Section 3 of this
act.

(m) “Development parcel” means a portion of a designated
seawall lot that is subdivided for construction improvements, or
rehabilitation of historic buildings for reuse, and that will be used
for nontrust land uses.

(n) “IFD law” means the Infrastructure Financing Districts law
set forth in Chapter 2.8 (commencing with Section 53395) of Part
1 of Division 2 of Title 5 of the Government Code, which
authorizes the use of property tax increment to finance
infrastructure.

(o) “Infrastructure costs” or “costs of infrastructure” means the
cost of constructing the Seawall Lot 337 infrastructure, including
related costs of planning and design work and a return on developer
equity, as provided in a plan of finance in a disposition and
development begin delete agreement for which the commission has made
findings in accordance with paragraph (3) of subdivision (a) of
Section 4.5 of Senate Bill 815. end delete begin insert agreement. end insert

(p) “Initial occupancy date” means the date on which the port
issues the first certificate of occupancy for a building on the leased
seawall lot or development parcel in Seawall Lot 337, as applicable.

(q) “Mission Bay developer” means an “owner,” as defined in
the Mission Bay South owner participation agreement.

(r) “Mission Bay South owner participation agreement” means
the agreement between the redevelopment agency and Catellus
Development Corporation, dated November 16, 1998, as amended.

(s) “Mission Bay South redevelopment plan” means the
Redevelopment Plan for the Mission Bay South Project adopted
by the board of supervisors on October 26, 1998, as amended.

(t) “Mission Bay South redevelopment project area” means the
area in the city subject to the Mission Bay South redevelopment
plan.

(u) “Nontrust lease revenues” means revenues that the port
receives from nontrust leases of designated seawall lots or
development parcels in Seawall Lot 337, as applicable.

(v) “Nontrust sources” means sources of consideration other
than nontrust lease revenues or moneys in the port’s harbor fund.
Nontrust sources include, without limitation, fee credits that may
be applied to offset local impact fees or exactions, special taxes,
tax increment, proceeds of general obligation bonds, proceeds of
community facilities bonds, and proceeds of tax allocation bonds.

(w) “Oversight board” means the body that the board of
supervisors created to oversee the fiscal management of the
successor agency in accordance with Assembly Bill 26.

(x) “Parcel P20” means a parcel owned by the port within the
Mission Bay South redevelopment project area that lies partially
within the southern portion of Seawall Lot 337.

(y) “Port advances” means begin insert a loan of trust assets where the port
uses end insert nontrust lease revenues begin delete that the port uses end delete to pay directly or
to reimburse the Seawall Lot 337 developer or any district
providing project-based public financing for costs of infrastructure
in accordance with the terms and conditions of this act. Port
advances do not include nontrust lease revenues that the port uses
to pay directly for the preservation of historic piers and historic
structures or for purposes that are otherwise authorized by this act.

(z) “Port of San Francisco,” “port commission,” or “port” means
the city acting by and through the San Francisco Port Commission.

(aa) “Project-based public financing” means special taxes from
development parcels in community facilities district project areas
formed under CFD law, property tax increment from development
parcels in infrastructure financing district project areas established
under the IFD law, bond proceeds secured by special taxes, tax
increment, or both, and any other mechanisms available to finance
infrastructure and public facilities that rely on revenues produced
by the area to be improved.

(ab) “Public trust” or “trust” means the common law public
trust for commerce, navigation, and fisheries.

(ac) “Redevelopment agency” means the San Francisco
redevelopment agency, that the board of supervisors formed under
the former California Community Redevelopment Law and that
was dissolved on February 1, 2012, by operation of Assembly Bill
26.

(ad) “San Francisco Bay” or “bay” means those areas defined
by Section 66610 of the Government Code.

(ae) “San Francisco waterfront” means the portions of San
Francisco Bay that the state transferred to the city under the Burton
Act.

(af) “Seawall Lot 337” means that parcel of real property in the
city known as Seawall Lot 337, as shown on that certain map
entitled “revised map of designed seawall lots,” which is on file
with the port, as those boundaries may be modified by Section 3
of this act.

(ag) “Seawall Lot 337 developer” means the person selected by
the port to negotiate exclusively with the port for the master
development of Seawall Lot 337 and Pier 48, and its successors
and authorized assigns.

(ah) “Seawall Lot 337 infrastructure” means infrastructure and
other public facilities that serve Seawall Lot 337 and are located
on Seawall Lot 337 or on lands immediately adjacent to the seawall
lot area, such as water, sewer, stormwater management, and other
utility installations, streets, roadways, sidewalks, parks, public
access and open space areas, shoreline improvements, and other
public facilities.

(ai) “Senate Bill 815” means Chapter 660 of the Statutes of
2007, as amended by Chapter 208 of the Statutes of 2009,
Assembly Bill 2649, and this act.

(aj) “State” means the State of California.

(ak) “Successor agency” means the San Francisco Office of
Community Investment and Infrastructure, which the board of
supervisors created in accordance with Assembly Bill 26 to serve
as the successor to the redevelopment agency.

(al) “Successor agency commission” means the San Francisco
Commission on Community Investment and Infrastructure.

(am) “Termination date” means the date determined in
accordance with subdivision (a) of Section 4 of Senate Bill 815
for the termination of a nontrust lease.

(an) “Tidelands” means the lands lying below the elevation of
ordinary high water, whether filled or unfilled, and includes
submerged lands.

SEC. 2.  

The Legislature finds and declares all of the following:

(a) San Francisco Bay is a valuable public trust asset of the state
that provides special maritime, navigational, recreational, cultural,
and historical benefits to the people of the region and the state.
Tidelands in California are held in trust for enjoyment and use by
the people of the state under the common law public trust doctrine.
Public trust lands may be used for water-related purposes, including
commerce, navigation, fishing, swimming, recreation, open space,
and wildlife habitat.

(b) The San Francisco waterfront consists primarily of sovereign
tidelands that the state granted to the city pursuant to the Burton
Act. Under the Burton Act and the city’s charter, the port holds
and manages the granted lands. The Burton Act authorizes the port
to use, conduct, operate, maintain, manage, regulate, improve, and
control the San Francisco waterfront consistent with the public
trust and the Burton Act trust.

(c) The San Francisco waterfront provides special maritime,
navigational, recreational, cultural, and historical benefits to the
entire San Francisco Bay area and serves as a unique destination
for the public from throughout the region.

(d) A unique feature of the San Francisco shoreline is the
numerous historic maritime resources present on port property,
many of which are in need of major structural repairs and are not
currently available for the use and enjoyment of the public. The
Legislature has previously found that rectifying the deteriorating
conditions along the San Francisco waterfront, the preservation of
the numerous historic piers and other historic structures on port
land, and the construction of waterfront plazas and open space are
matters of statewide importance that will further the purposes of
the public trust and the Burton Act trust.

(e) The San Francisco shoreline is a valuable public trust asset,
a vibrant and world-renowned tourist destination, and a vital
component of the regional, state, and national economies. The
success of the port’s efforts to revitalize the waterfront depends,
in part, on strategies for optimizing uses of and increasing revenues
and other public trust benefits from port lands in addition to using
funding sources other than the port harbor fund to finance
development on port lands.

(f) The seawall lots are tidelands that were filled and cut off
from the waterfront by the construction of the great seawall, now
occupied by the Embarcadero and other roadways, in the late 19th
and early 20th centuries. Over time, some of the seawall lots,
including the designated seawall lots, have ceased to be useful in
whole or in part for the promotion of the public trust and the Burton
Act trust, except for the production of revenue to support the
purposes of the Burton Act trust. The designated seawall lots are
presently either vacant or leased on an interim basis, primarily for
commuter parking.

begin delete

(g) (1) In Senate Bill 815, the Legislature found all of the
following:

(A) The designated seawall lots are, in whole or in part, no
longer necessary for the purposes of the public trust or Burton Act
trust.

(B) Costs to implement the port’s capital plan exceed projected
revenues of the port available for these purposes, in part due to
the port’s inability to make optimal use of the designated seawall
lots.

(C) Future revenues from the development and leasing of the
designated seawall lots are an essential source of funds to preserve
the port’s numerous historic piers and historic structures, construct
and maintain waterfront plazas and open space, and improve public
access to the waterfront.

(2) Senate Bill 815 lifted the use restrictions of the public trust
and Burton Act trust from the designated seawall lots and
authorized the port to enter into nontrust leases of the lands, subject
to certain conditions and subject to the requirement that the nontrust
lease revenues be used for specified trust purposes.

end delete begin delete

(h)

end delete

begin insert (g) end insert  Seawall Lot 337, the largest of the designated seawall lots,
is located just south of China Basin and is presently used as a
surface parking lot. Senate Bill 815 depicts Seawall Lot 337 as
bounded by Mission Rock Street, Terry A. Francois Boulevard,
and Third Street. Following an extensive community process led
by a citywide advisory panel and a solicitation process to identify
qualified developers, the port commission entered into exclusive
negotiations with the Seawall Lot 337 developer for the lease,
construction, and operation of the proposed project at Seawall Lot
337, a portion of Terry A. Francois Boulevard, Pier 48, and the
marginal wharf between Pier 48 and Pier 50. The proposed project
would include a mix of uses, such as commercial retail and office,
market-rate and affordable residential, rehabilitation of Pier 48,
new parks, expansion of the existing China Basin Park with a
portion of Terry A. Francois Boulevard, and new and expanded
shoreline access. The Legislature finds that the revitalization of
Seawall Lot 337 and Pier 48 through mixed-use development is
of particular importance to the state for the reasons stated in Senate
Bill 815.

begin delete

(i)

end delete

begin insert (h) end insert  The Mission Bay area surrounding Seawall Lot 337 is the
site of a major mixed-use redevelopment project. As a result of
Assembly Bill 26, the redevelopment agency was dissolved on
February 1, 2012, and the successor agency assumed certain
executory obligations of the redevelopment agency. The successor
agency commission exercises land use, development, and design
approval authority for the remaining projects of the former
redevelopment agency, including Mission Bay.

begin delete

(j)

end delete

begin insert (i) end insert  The Mission Bay South redevelopment project area,
established in 1998 by the board of supervisors’ adoption of the
Mission Bay South redevelopment plan, lies to the west and south
of Seawall Lot 337. Parcel P20 is a narrow, undeveloped strip of
land within the Mission Bay South redevelopment project area
that is bounded on the north by the northern line of Mission Rock
Street in its former location, and overlaps a portion of Seawall Lot
337, as depicted in Senate Bill 815. In accordance with the Mission
Bay South redevelopment plan, the Mission Bay developer has
since realigned Mission Rock Street from its northeasterly
orientation to an east-west orientation, such that a portion of Parcel
P20 and the former Mission Rock Street right of way now lie north
of the northerly line of Mission Rock Street. The development
proposal for Seawall Lot 337 includes this portion of Parcel P20
and former Mission Rock Street.

begin delete

(k)

end delete

begin insert (j) end insert  Under its development proposal, the Seawall Lot 337
developer would realign Terry A. Francois Boulevard and use part
of the northern section of the street to expand China Basin Park.
The remaining portion of the realigned Terry A. Francois
Boulevard would be a working waterfront street that would support
active maritime, industrial, and production uses at the waterfront.
Terry A. Francois Boulevard would include areas for social spaces
and loading zones serving proposed buildings, a pedestrian
throughway, a shared zone, and the Blue Greenway adjacent to
the Bay and Piers 48 and 50, contributing to uninterrupted public
access along San Francisco’s eastern waterfront.

begin delete

(l)

end delete

begin insert (k) end insert  In connection with the project, a substantial investment in
new infrastructure and public facilities is necessary for the port to
fully realize the public benefits of those portions of Seawall Lot
337 that will be used for trust purposes, and to maximize the value
of development parcels that will be subject to nontrust leases. The
infrastructure costs for Seawall Lot 337 are expected to exceed
one hundred fifty million dollars ($150,000,000). The development
proposal for Seawall Lot 337 provides for the Seawall Lot 337
developer to construct the needed infrastructure and public
facilities, which would be funded by developer equity to the extent
that port advances and project-based public financing are not then
available. Project-based public financing would be used to pay
directly or to reimburse the Seawall Lot 337 developer for its equity
advances and the port for port advances for infrastructure costs
under the CFD law, IFD law, and other applicable laws.

begin delete

(m)

end delete

begin insert (l) end insert  Because special taxes, property tax increment, and other
nontrust funding sources arising from the project may not become
available until well after the port receives nontrust lease revenues
from development parcels in Seawall Lot 337, it is critical that the
port be able to begin delete use end delete begin insert loan end insert those revenues to pay Seawall Lot 337
infrastructure costs to minimize the cost of development capital
and maximize the land value that the port is able to realize for
preservation of its historic piers and historic structures, and for
other public trust uses. This act authorizes the port to make begin insert port end insert
advances of nontrust lease revenues from Seawall Lot 337 to pay
Seawall Lot 337 infrastructure costs, subject to the requirements
of this act.

begin delete

(n)

end delete

begin insert (m) end insert  This act clarifies that the boundaries of Seawall Lot 337
extend to the line of Mission Rock Street and to the line of Terry
A. Francois Boulevard, as those streets have been or may be
realigned, and to the boundary of China Basin Park as finally
established, such that Seawall Lot 337 includes those portions of
Parcel P20 and the former Mission Rock Street right of way
embraced within those boundaries. This act also allows the
successor agency to remove Parcel P20 from the Mission Bay
South redevelopment plan and related documents and agreements
without the need for Department of Finance or Controller approval.

begin delete

(o)

end delete

begin insert (n) end insert  This act also amends Senate Bill 815 to provide that the
75-year limitation on the term of authorized nontrust leases for
designated seawall lots and development parcels at Seawall Lot
337, as applicable, begins to run on the initial occupancy date for
the leased site.

SEC. 3.  

For purposes of Senate Bill 815 and Assembly Bill
2649, the boundaries of Seawall Lot 337 extend to the line of, but
do not include, Third Street on the west, Mission Rock Street on
the south, and Terry A. Francois Boulevard on the east, as those
streets are ultimately constructed, realigned, or reconfigured in
connection with the Mission Bay South redevelopment plan and
the development of Seawall Lot 337. If there is any conflict
between this section and the diagram in Section 15 of Senate Bill
815 or Section 9 of Assembly Bill 2649, this section shall control.

SEC. 4.  

Subdivisions (c), (d), and (f) of Section 34163 of the
Health and Safety Code, and subdivisions (a) and (b) of Section
34164 of the Health and Safety Code, shall not apply to, and no
action of the Department of Finance or the Controller shall be
required for, any action taken by the oversight board, the successor
agency commission, the board of supervisors, or any other
governmental body required to act to amend the Mission Bay South
redevelopment plan to remove Parcel P20 from the Mission Bay
South redevelopment project area, or to amend any related
documents or agreements to delete regulatory requirements, zoning
controls, and the Mission Bay developer’s obligations with respect
to Parcel P20.

SEC. 5.  

Section 4 of Chapter 660 of the Statutes of 2007 is
amended to read:

Sec. 4.  

Except for Seawall Lot 337, the port may enter into a
lease of all or any portion of the designated seawall lots free from
the use requirements established by the public trust, the Burton
Act trust, and the Burton Act transfer agreement (nontrust lease)
subject to the requirements of this section. For Seawall Lot 337,
the port may enter into nontrust leases of development parcels,
subject to the requirements of this section, if the commission has
begin delete made all of the findings in end delete begin insert approved port advances pursuant to end insert
paragraph (3) of subdivision (a) of Section 4.5, and if all of the
conditions of begin insert this section and end insert Section 6 are met.

(a) Notwithstanding the Burton Act, Section 718 of the Civil
Code, Section 37384 of the Government Code, or any other
provision of law to the contrary, the term of any individual nontrust
lease, including any extension of the term allowed by right of
renewal, shall not exceed 75 years from the initial occupancy date
for the leased site or development parcel. Each nontrust lease shall
terminate no later than the date that is the later of January 1, 2094,
or the date that is 75 years after the date that the port first issues
a certificate of occupancy for the improvements on the leased site
or development parcel. Nothing in this section shall be construed
as limiting the term of any lease, or portion thereof, that is for uses
consistent with the public trust and the Burton Act.

(b) (1) (A) Except as provided in this subdivision, all nontrust
lease revenues received by the port shall be deposited in a separate
account in the harbor fund to be expended for the preservation of
historic piers and historic structures, or for the construction and
maintenance of waterfront plazas and open space.

(B) The port may use its nontrust lease revenues from
development parcels in Seawall Lot 337 to make port advances to
fund Seawall Lot 337 infrastructure, except for facilities for which
expenditures are authorized under subparagraph (A), if the
commission has begin delete made the findings under end delete begin insert approved port advances
under end insert paragraph (3) of subdivision (a) of Section 4.5.

(C) Revenues shall not be expended under this subdivision for
historic piers or historic structures on land subject to public trust
use restrictions unless the executive officer of the commission has
approved the proposed uses of the pier or begin delete structure or, for Pier 48
and related historic structures, the executive officer of the
commission has made the findings under paragraph (3) of
subdivision (a) of Section 4.5 and has otherwise complied with
this act. end delete begin insert structure. end insert

(2) The port may annually transfer from the separate account
and deposit in the general account of the harbor fund, to be used
for any purpose consistent with the public trust and the Burton
Act, an amount equal to the sum of the baseline revenue streams
for each designated seawall lot subject to one or more nontrust
leases (leased seawall lots), less any revenues received by the port,
for the year preceding the transfer of funds, from any portion or
portions of the leased seawall lots that were not subject to a
nontrust lease. For purposes of this subdivision, the baseline
revenue stream for a designated seawall lot is the average annual
revenue received by the port from that seawall lot over the five
years prior to January 1, 2008, adjusted for inflation.

(3) For purposes of this subdivision, the term “revenue” shall
exclude any costs incurred by the port to administer the lease and
to operate and maintain the leased property and any improvements
thereon.

(4) For each nontrust lease of a designated seawall lot, the port
shall maintain a separate accounting of all revenues transferred
pursuant to paragraph (2), all costs excluded pursuant to paragraph
(3), and all revenues deposited into the separate account.

(5) If the funds in the separate account exceed the amount
needed for the preservation of historic piers and historic structures
and for construction of waterfront plazas and open space, the excess
funds shall be deposited in the harbor fund to be used for purposes
consistent with the public trust and the Burton Act.

(c) A nontrust lease shall be for fair market value and on terms
consistent with prudent land management practices as determined
by the port and subject to approval by the commission as provided
in paragraph (1).

(1) Prior to executing a nontrust lease, the port shall submit the
proposed lease to the commission for its consideration, and the
commission shall grant its approval or disapproval in writing within
90 days of receipt of the lease and supporting documentation,
including documentation related to value. In approving a nontrust
lease, the commission shall find that the lease meets all of the
following:

(A) Is for fair market value.

(B) Is consistent with the terms of the public trust and the Burton
Act trust, other than their restrictions on uses.

(C) Is otherwise in the best interest of the state.

(2) Whenever a nontrust lease is submitted to the commission
for its consideration, the costs of any study or investigation
undertaken by or at the request of the commission, including
reasonable reimbursement for time incurred by commission staff
in processing, investigating, and analyzing such submittal, shall
be borne by the port; however, the port may seek payment or
reimbursement for these costs from the proposed lessee.

SEC. 6.  

Section 4.5 is added to Chapter 660 of the Statutes of
2007, to read:

Sec. 4.5.  

(a) For nontrust leases of Seawall Lot 337 that are
entered into in accordance with the terms of a disposition and
development agreement for the master development of Seawall
Lot 337, the commission shall consider whether the port will
receive consideration equal to the fair market value on terms
consistent with prudent land management practices based on, and
in accordance with, all of the following procedures:

(1) At least 30 days prior to approval by the board of supervisors
of the development project for Seawall Lot 337, the port shall
submit the proposed disposition and development agreement
between the master developer and the port governing the master
development of Seawall Lot 337 and the following information,
to the extent not contained in the agreement, to the commission
for its consideration:

(A) The proposed procedures for the disposition of nontrust
development parcels and including the proposed plan of finance
for the development project that describes the proposed port
advances for Seawall Lot 337 infrastructure costs.

(B) The proposed procedures for establishing the fair market
value of each nontrust lease of a development parcel, consistent
with the land uses permitted under the disposition and development
agreement, including the appraisal instructions.

(C) A description of the nontrust sources that the port expects
to receive for the project and how theses nontrust sources will be
applied to the project.

(D) A description of the manner by which the port will select
the developer of each development parcel, including the form of
ground lease.

(2) Following approval of the development project for Seawall
Lot 337 by the board of supervisors, the port shall submit to the
commission the project documents described in paragraph (1) as
finally approved by the board of supervisors.

(3) Within 75 days after approval of the project by the board of
supervisors and receipt of all required documentation from the
port, the commission shall begin delete consider whether to make all of the
following findings: end delete begin insert either approve or deny the port advances from
nontrust lease revenues for Seawall Lot 337 infrastructure based
on the information it is required to consider by this section and
whether port advances are consistent with the goals of Senate Bill
815. end insert

begin delete

(A) The disposition and development agreement, including the
plan of finance and use of port advances, the procedures for
establishing rent for future nontrust leases of individual
development parcels, including appraisal instructions, and other
consideration to the port will provide the port with fair market
value.

(B) The submitted documentation identifies the projected
amount of port advances and the nontrust sources projected to
repay port advances with interest. If port advances are not projected
to be repaid with interest within 40 years after the port makes its
first port advance, the projections and other evidence shall
demonstrate the availability and viability of those sources for full
repayment within an additional period that the commission finds
reasonable and consistent with subparagraph (E).

(C) The master development on the whole is consistent with
the port study required by Section 6.

(D) The use of port advances will not substantially interfere
with trust uses and purposes and will reduce Seawall Lot 337
infrastructure financing costs.

(E) The port advances will generate increased revenues for the
trust, including revenues available for historic pier and historic
structure preservation.

(F) The master development is consistent with the terms of the
public trust and the Burton Act trust, other than their restrictions
on uses.

(G) The development is otherwise in the best interest of the
state.

(4) If the commission does not make the findings under
paragraph (3), the port advances from nontrust lease revenues for
Seawall Lot 337 infrastructure shall not be allowed.

end delete begin delete

(5)

end delete

begin insert (4) end insert  The port shall bear the costs of any study or investigation
that the commission undertakes or requests, including reasonable
reimbursement for commission staff time in processing,
investigating, and analyzing the port’s submittal. The port’s
reimbursement obligation does not affect its ability to seek payment
or reimbursement for these costs from the master developer.

(b) In addition to any statement of expenditures and revenues
that the port is required by law to submit to the commission
annually, the port shall provide a separate accounting of all
consideration from nontrust sources and other port revenues spent
on Seawall Lot 337, including any port advances and any revenues
from nontrust sources received by the port to repay those advances.

(c) The port shall provide the commission with copies of the
final audit report for each phase of the project and the final audit
report for the project within 90 days after the port receives each
audit report.

(d) If, within 20 years after the first port advance, the port has
not submitted an audit report to the commission indicating that all
of the port advances have been repaid, the port shall report to the
commission the total amount of revenues from nontrust leases that
the port used to fund port advances, the amount that the port has
received to repay port advances, the projected sources to repay
any balance still owing on account of port advances, and the
expected timing of repayment of the balance still owing. Thereafter,
the port shall provide supplemental reports containing updates to
this information to the commission every five years.

begin delete

(e) If, by the date 40 years after the first port advance, the
amount of port advances still exceeds the repayments and other
consideration from nontrust sources received by the port for its
advances, then the commission, following consultation with the
port, may require the port to take actions to remedy any shortfall
as may be in the best interest of the state. In determining the
amount of repayments that the port has received under this
subdivision, the commission may consider all forms of
consideration from nontrust sources received by the port after the
first port advance has been made.

end delete begin insert

(e) The port shall ensure repayment, with interest, of each port
advance within 50 years after the port advance is made. The port
may extend the repayment period beyond 50 years subject to
commission approval. The commission shall base its approval on
whether the port is taking actions to remedy any shortfall in
repayment.

end insert

SEC. 7.  

Section 7 of Chapter 660 of the Statutes of 2007 is
amended to read:

Sec. 7.  

Sections 3, 4, 4.5, and 6 of this act shall be inoperative
as to a designated seawall lot on the later of (a) the last termination
date of any nontrust lease on the site, or (b) on January 1, 2094,
after which later date the use of the designated seawall lot shall
be consistent with the public trust, the Burton Act trust, and the
Burton Act transfer agreement. No later than January 1, 2094, or
the last termination date of any nontrust lease on the site, whichever
is later, all structures, buildings, and appurtenances on a designated
seawall lot not consistent with the purposes of the public trust, the
Burton Act trust, and Burton Act transfer agreement, shall be
repurposed or modified, including any necessary restoration or
remediation of the seawall lot to facilitate public trust uses.

SEC. 8.  

If any provision of this act, or its application to any
person, property, or circumstance, is held invalid by any court, the
invalidity or inapplicability of that provision shall not affect any
other provision of this act or the application of that provision to
any other person, property, or circumstance, and the remaining
portions of this act shall continue in full force and effect, unless
enforcement of this act as so modified by and in response to that
invalidation would be grossly inequitable under all of the
circumstances, or would frustrate the fundamental purposes of this
act.

SEC. 9.  

The Legislature finds and declares that, because of the
unique circumstances applicable only to the lands described in this
act in the City and County of San Francisco, a statute of general
applicability cannot be enacted within the meaning of subdivision
(b) of Section 16 of Article IV of the California Constitution.