Amended in Senate August 19, 2016

Amended in Senate June 22, 2016

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 BillNo. 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.


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 the term of a nontrust lease shall not exceed 75 years from the initial occupancybegin delete dateend deletebegin insert date, as defined,end insert of the improvements developed on the leased site or development parcel, and in no event shall the term of a nontrust lease extend beyond December 31,begin delete 2120.end deletebegin insert 2105.end insert 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 has approved the port advances 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:

P2    1


For the purposes of this act the following terms
2have the following meanings:

3(a) “Assembly Bill 26” means Chapter 5 of the First
4Extraordinary Session of the Statutes of 2011, in which certain
5provisions were amended by Chapter 26 of the Statutes of 2012,
6effective as provided in California Redevelopment Assn. v.
7Matosantos (2011) 53 Cal.4th 231.

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

10(c) “Bay Plan” means the San Francisco Bay Plan as adopted
11and administered by the San Francisco Bay Conservation and
12Development Commission pursuant to the McAteer-Petris Act.

13(d) “BCDC” means the San Francisco Bay Conservation and
14Development Commission established pursuant to Section 66620
15of the Government Code.

P3    1(e) “Board of supervisors” means the Board of Supervisors of
2the City and County of San Francisco.

3(f) “Burton Act” means Chapter 1333 of the Statutes of 1968,
4as amended, which authorized the state to convey to the city, in
5trust and subject to certain terms, conditions, and reservations, the
6state’s interest in certain tidelands, including filled lands.

7(g) “Burton Act lands” means the tidelands that the state granted
8to the city under the Burton Act, including the San Francisco
9waterfront from the Hyde Street pier to India Basin.

10(h) “Burton Act transfer agreement” means the agreement dated
11January 24, 1969, between the state and the city, relating to the
12transfer of the Burton Act lands from the state to the city, and any
13amendments to that agreement in accordance with its terms.

14(i) “Burton Act trust” means the statutory trust imposed by the
15Burton Act on Burton Act lands and lands dedicated to or acquired
16by the city as assets of the trust.

17(j) “CFD law” means the Mello-Roos Community Facilities
18Act of 1982 (Chapter 2.5 (commencing with Section 53311)) of
19Part 1 of Division 2 of Title 5 of the Government Code) or the San
20Francisco Special Tax Financing Law (San Francisco Admin. Code
21Ch. 43, Art. X), as applicable.

22(k) “City” means the City and County of San Francisco, a charter
23city and county, and includes the port.

24(l) “Commission” means the State Lands Commission.

25(m) “Designated seawall lot” or “designated seawall lots” means
26any of those parcels of real property situated in the city that are
27defined as designated seawall lots in Senate Bill 815 or Assembly
28Bill 2649, modified by Section 3 of this act.

29(n) “Development parcel” means a portion of a designated
30seawall lot that is subdivided for construction of improvements,
31or rehabilitation of historic buildings for reuse, and that will be
32used for nontrust land uses.

33(o) “Embarcadero Historic District” means the portion of the
34Burton Act lands from Pier 45 to Pier 48, which was listed on the
35National Register of Historic Places in 2006.

36(p) “IFD law” means the provisions of the Government Code
37authorizing the formation of local financing districts authorized
38to use property tax increment to finance infrastructure.

39(q) “Infrastructure costs” or “costs of infrastructure” means the
40cost of constructing the Seawall Lot 337 infrastructure, including
P4    1related costs of planning and design work and a return on developer
2equity, as provided in a plan of finance in a disposition and
3development agreement.

4(r) “Initial occupancy date”begin delete meansend deletebegin insert means, for each designated
5seawall lot other Seawall Lot 337, and for each development parcel
6in Seawall Lot 337,end insert
the date on which the port issues the first
7certificate of occupancy for a building underbegin delete aend deletebegin insert the firstend insert nontrust
8lease ofbegin delete aend deletebegin insert theend insert designated seawall lot or ofbegin delete aend deletebegin insert theend insert development parcel
9in Seawall Lot 337, as applicable.

10(s) “McAteer-Petris Act” means Title 7.2 (commencing with
11Section 66600) of the Government Code.

12(t) “Mission Bay developer” means an “owner,” as defined in
13the Mission Bay South owner participation agreement.

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

17(v) “Mission Bay South redevelopment plan” means the
18Redevelopment Plan for the Mission Bay South Project adopted
19by the board of supervisors on October 26, 1998, as amended.

20(w) “Mission Bay South redevelopment project area” means
21the area in the city subject to the Mission Bay South redevelopment

23(x) “Nontrust lease revenues” means revenues that the port
24receives from leases of designated seawall lots or development
25parcels in Seawall Lot 337, as applicable, where the trust use
26restrictions have been lifted by a prior legislative act for a
27designated period of time.

28(y) “Nontrust sources” means sources of consideration other
29than nontrust lease revenues or moneys in the port’s harbor fund.
30Nontrust sources include, without limitation, fee credits that may
31be applied to offset local impact fees or exactions, special taxes,
32tax increment, proceeds of general obligation bonds, proceeds of
33community facilities bonds, and proceeds of tax allocation bonds.

34(z) “Northeastern waterfront” means the area designated in the
35special area plan as the land and water areas within port jurisdiction
36from Pier 35 to China Basin.

37(aa) “Oversight board” means the body that the board of
38supervisors created to oversee the fiscal management of the
39successor agency in accordance with Assembly Bill 26.

P5    1(ab) “Parcel P20” means a parcel owned by the port within the
2Mission Bay South redevelopment project area that lies partially
3within the southern portion of Seawall Lot 337.

4(ac) “Port advances” means a loan of nontrust lease revenues
5from Seawall Lot 337 to a district or other entity providing
6project-based public financing to pay directly or to reimburse the
7Seawall Lot 337 developer for costs of infrastructure in accordance
8with the terms and conditions of this act. Port advances do not
9include nontrust lease revenues that the port uses to pay directly
10for the preservation of historic piers and historic structures or for
11purposes that are otherwise authorized by this act.

12(ad) “Port of San Francisco,” “port commission,” or “port”
13means the city acting by and through the San Francisco Port

15(ae) “Project-based public financing” means special taxes from
16development parcels in community facilities district project areas
17formed under CFD law, property tax increment from development
18parcels in infrastructure financing district project areas established
19under IFD law, bond proceeds secured by special taxes, tax
20increment, or both, and any other mechanisms available to finance
21infrastructure and public facilities that rely on revenues produced
22by the area to be improved.

23(af) “Public trust” means the common law public trust for
24commerce, navigation, and fisheries.

25(ag) “Redevelopment agency” means the San Francisco
26redevelopment agency, that the board of supervisors formed under
27the former California Community Redevelopment Law and that
28was dissolved on February 1, 2012, by operation of Assembly Bill

30(ah) “San Francisco Bay” or “bay” means those areas defined
31by Section 66610 of the Government Code.

32(ai) “San Francisco waterfront” means the portions of San
33Francisco Bay that the state transferred to the city under the Burton

35(aj) “Seaport plan” means the San Francisco Bay Area Seaport
36Plan adopted by BCDC and the Metropolitan Transportation
37Commission, as amended in 2003.

38(ak) “Seawall Lot 337” means that parcel of real property in the
39city designated as Seawall Lot 337, as shown on that certain map
40entitled “revised map of designated seawall lots,” which is on file
P6    1with the port, as those boundaries may be modified by Section 3
2of this act.

3(al) “Seawall Lot 337 developer” means the person selected by
4the port to negotiate exclusively with the port for the master
5development of Seawall Lot 337 and Pier 48, and its successors
6and authorized assigns.

7(am) “Seawall Lot 337 infrastructure” means infrastructure and
8other public facilities that serve Seawall Lot 337 and are located
9on Seawall Lot 337 or on lands immediately adjacent to the seawall
10lot area, such as water, sewer, stormwater management, and other
11utility installations, streets, roadways, sidewalks, parks, public
12access and open space areas, shoreline improvements, and other
13public facilities.

14(an) “Senate Bill 815” means Chapter 660 of the Statutes of
152007, as amended by Chapter 208 of the Statutes of 2009.

16(ao) “Southern waterfront” means the area designated in the
17special area plan as the land and water areas within port jurisdiction
18from China Basin to and including India Basin.

19(ap) “Special area plan” means BCDC’s San Francisco
20Waterfront Special Area Plan, adopted in 1975 as an amendment
21to the Bay Plan, as amended.

22(aq) “State” means the State of California.

23(ar) “Successor agency” means the San Francisco Office of
24Community Investment and Infrastructure, which the board of
25supervisors created in accordance with Assembly Bill 26 to serve
26as the successor to the redevelopment agency.

27(as) “Successor agency commission” means the San Francisco
28Commission on Community Investment and Infrastructure.

29(at) “Tidelands” means the lands lying below the elevation of
30ordinary high water, whether filled or unfilled, and includes
31submerged lands.

32(au) “Waterfront land use plan” means the Port of San Francisco
33Waterfront Land Use Plan, including its waterfront design and
34access element, adopted by the port commission in 1997, as


SEC. 1.5.  

As used in Senate Bill 815 and Assembly Bill 2649,
37each term set forth in Section 1 of this act shall have the meaning
38ascribed to it in that section and, in the event of any conflict
39between this act and Senate Bill 815 or Assembly Bill 2649, this
40act shall prevail.

P7    1

SEC. 2.  

The Legislature finds and declares all of the following:

2(a) The seawall lots are tidelands that were filled and cut off
3from the waterfront by the construction of the great seawall in the
4late 19th and early 20th centuries, and by the construction of the
5Embarcadero roadway which lies, in part, over a portion of the
6great seawall. Over time, some seawall lots, including the
7designated seawall lots, have ceased to be useful in whole or in
8part for the promotion of the public trust and the Burton Act trust,
9except for the production of revenue to support the Burton Act
10trust. The designated seawall lots are either vacant or leased on an
11interim basis, primarily for parking.

12(b) Seawall Lot 337, the largest of the designated seawall lots,
13is located just south of China Basin and used as a surface parking
14lot. Senate Bill 815 depicts Seawall Lot 337 as bounded by Mission
15Rock Street, Terry A. Francois Boulevard, and Third Street. The
16port commission entered into exclusive negotiations with the
17Seawall Lot 337 developer for the lease, construction, and
18operation of a proposed project at Seawall Lot 337, a portion of
19Terry A. Francois Boulevard, Pier 48, and the marginal wharf
20between Pier 48 and Pier 50. The Legislature finds that the
21revitalization of Seawall Lot 337 and Pier 48 is of particular
22importance to the state.

23(c) The Mission Bay South redevelopment project area lies to
24the west and south of Seawall Lot 337. Parcel P20, based on the
25Mission Bay South redevelopment plan, is a narrow, undeveloped
26strip of land within the Mission Bay South redevelopment project
27area that is bounded on the north by the northern line of Mission
28Rock Street in its former location, and overlaps a portion of Seawall
29Lot 337. In accordance with the Mission Bay South redevelopment
30plan, the Mission Bay developer has since realigned Mission Rock
31Street from its northeasterly orientation to an east-west orientation,
32such that a portion of Parcel P20 and the former Mission Rock
33Street right of way now lie north of the northerly line of Mission
34Rock Street. The development proposal for Seawall Lot 337
35includes this portion of Parcel P20 and the former Mission Rock

37(d) Under the development proposal, the Seawall Lot 337
38developer would realign Terry A. Francois Boulevard and use part
39of the northern section of the street to expand China Basin Park.
40The remaining portion of the realigned Terry A. Francois
P8    1Boulevard would be a working waterfront street that would support
2active maritime, industrial, and production uses at the waterfront.
3Terry A. Francois Boulevard would include areas for social spaces
4and loading zones serving buildings, a pedestrian throughway, a
5shared zone, and the Blue Greenway adjacent to the bay and Piers
648 and 50, facilitating uninterrupted public access along San
7Francisco’s eastern waterfront.

8(e) A substantial investment in new infrastructure and public
9facilities is necessary for the port to fully realize the public benefits
10of the portions of Seawall Lot 337 that will be used for public trust
11purposes, and to maximize the value of development parcels that
12will be subject to nontrust leases. The infrastructure costs for
13Seawall Lot 337 are expected to exceed one hundred fifty million
14dollars ($150,000,000) based on estimates presented to the port
15commission when it endorsed a term sheet for the project in 2013.
16The development proposal provides for the Seawall Lot 337
17developer to construct the necessary infrastructure and public
18facilities, which would be funded by developer equity to the extent
19that port land value is unavailable. Project-based public financing
20would be used to pay directly or to reimburse the Seawall Lot 337
21developer for its equity advances for infrastructure costs under
22CFD law, IFD law, and other applicable laws.

23(f) Project-based public financing, which includes special taxes,
24property tax increment, and other nontrust funding sources arising
25from the project may not become available until after the port
26receives nontrust lease revenues from development parcels in
27Seawall Lot 337. The port may have the opportunity to loan
28nontrust lease revenues for Seawall Lot 337 infrastructure costs
29for the purpose of reducing financing costs and maximizing the
30land value to the port to generate additional revenue that can be
31used for preservation of the port’s historic piers and structures and
32for other public trust uses.

33(g) In 1965, the Legislature adopted the McAteer-Petris Act to
34protect and enhance San Francisco Bay and its natural resources.
35Among other things, the McAteer-Petris Act grants BCDC
36regulatory authority over further filling in San Francisco Bay and
37limits that activity to: (1) water-oriented uses that meet specified
38criteria; (2) minor fill that improves shoreline appearance or public
39access; and (3) activities necessary for the health, safety, and
40welfare of the public in the entire bay area. The McAteer-Petris
P9    1Act also directs BCDC to require the provision of maximum
2feasible public access to the bay and its shoreline consistent with
3a project.

4(h) In 1969, the Legislature received and acted upon BCDC’s
5report and recommendations from a three-year study of San
6Francisco Bay. The resulting Bay Plan includes BCDC’s policies
7to guide use and protection of all areas within BCDC’s jurisdiction
8and ensures that proposed projects minimize bay fill and provide
9maximum feasible public access to the bay.

10(i) Bay Plan policy concerning filling for bay-oriented
11commercial recreation and bay-oriented public assembly on
12privately owned or publicly owned property, also known as the
13replacement fill policy, provides in part that BCDC may permit
14fill on publicly owned land for bay-oriented commercial recreation
15and bay-oriented public assembly if certain conditions are met,
16including all of the following:

17(1) The fill is a replacement pier that covers less of the bay than
18the area that is being uncovered.

19(2) The amount of bay-oriented commercial recreation or
20bay-oriented public assembly use covers no more than 50 percent
21of the area of the bay uncovered.

22(3) The remainder of the replaced pier (50 percent) shall be used
23for public recreation, public access, or open space, including open

25(j) The application of the replacement fill policy to the piers
26along the northeastern waterfront created substantial challenges
27to port and BCDC efforts to improve the waterfront. In part to
28address this issue, BCDC and the port, together with the Save San
29Francisco Bay Association and numerous community groups and
30individuals, undertook a planning process that resulted in
31amendments to the port’s waterfront land use plan and BCDC’s
32special area plan. Those amendments focused on the northeastern
33waterfront with the goal of achieving the following objectives:

34(1) Reconnecting the city to its waterfront.

35(2) Increasing open water, public access, and opportunities to
36enjoy the San Francisco waterfront in a manner that completes the
37open space and public access network in the northeastern

39(3) Providing for new development that attracts people to the
40bay and increases revenue to the port and the city.

P10   1(4) Preserving historic resources and waterfront urban form.

2(k) The special area plan amendments focused primarily on the
3northeastern waterfront and prescribed certain actions to implement
4the plan, including all of the following:

5(1) Establishing a joint design review process for projects on
6the northeastern waterfront, leading to the creation of the
7 Waterfront Design Advisory Committee.

8(2) Requiring the port to prepare a nomination of the
9northeastern waterfront from Pier 35 to China Basin as an historic
10district listed in the National Register of Historic Places.

11(3) Authorizing BCDC, through its permitting authority, to set
12aside otherwise applicable use limitations on new bay fill, including
13the replacement fill policy, as a means to provide an integrated
14package of public benefits that prescribed removal of specified
15piers, restoration of significant open water areas, completion of
16the waterfront-wide, integrated public access network, preservation
17of significant historic resources, and development of new uses in
18the interests of the health, safety, or welfare of the public
19throughout the bay area.

20(l) The special area plan amendments did not affect the
21 application of the replacement fill policy to piers north of Pier 35
22or south of China Basin. BCDC, the port, and other participants
23 assumed that then-dominant industrial and maritime activities
24south of China Basin would continue and grow. The entire southern
25waterfront, including Pier 48 and about six acres of Seawall Lot
26337 adjacent to the piers, remained designated as a port priority
27use area in the seaport plan to accommodate growth in neo-bulk
28and break bulk cargo activities.

29(m) At the time the special area plan amendments were being
30drafted, it was not known that Pier 48 would be eligible for listing
31on the National Register of Historic Places. In the course of
32preparing the nomination report for the Embarcadero Historic
33District, the port discovered that Pier 48 is a contributing resource
34to the district. As a result, the district, which was listed in the
35National Register of Historic Places in 2006, extends south of
36China Basin to include Pier 48.

37(n) The historic use of Pier 48 for break bulk cargo operations
38is no longer viable due to a number of factors, including the
39construction of the Embarcadero roadway and Terry A. Francois
40Boulevard, elimination of rail service to the piers, and the inability
P11   1of finger piers to accommodate modern containerized cargo
2operations. The port operates a break bulk facility at Pier 80, which
3has unused capacity for break bulk cargo. Pier 48 maritime berths
4are currently used for maritime industrial purposes.

5(o) Pier 48 is ideally situated to provide public access to and
6enjoyment of the waterfront and bay. It is within walking distance
7of the Ferry Building, AT&T Park, and regional transit hubs,
8including the Transbay Transit Center, which is under construction,
9and has views of the bay, the San Francisco-Oakland Bay Bridge,
10and the Brannan Street Wharf. The proposed reuse of Pier 48
11includes visitor-serving uses, public access, historic rehabilitation
12of the pier consistent with the United States Interior Secretary’s
13Standards for Rehabilitation, berthing facilities, and other uses.
14This act amends the seaport plan and the special area plan to allow
15Pier 48 to be treated similarly to the other finger piers in the
16Embarcadero Historic District and to remove the port priority use
17area designation from Pier 48.


SEC. 3.  

If the adjacent streets and park areas are realigned or
19reconfigured in connection with the development of Seawall Lot
20337, the boundaries of Seawall Lot 337 shall be revised to conform
21to the realigned or reconfigured park or street boundaries, if the
22new boundaries are approved by the executive officer of the
23commission. The executive officer of the commission may require
24that a legal description and record of survey be approved by the
begin delete commission in conjunction with the approvals required in
26paragraph (3) of subdivision (a) of Section 4.5 of Senate Bill 815,
27as added by this act.end delete
begin insert commission.end insert


SEC. 4.  

Subdivisions (c), (d), and (f) of Section 34163 of the
29Health and Safety Code, and subdivisions (a) and (b) of Section
3034164 of the Health and Safety Code, shall not apply to, and no
31action of the Department of Finance or the Controller shall be
32required for, any action taken by the oversight board, the successor
33agency commission, the board of supervisors, or any other
34governmental body required to act to amend the Mission Bay South
35redevelopment plan to remove Parcel P20 from the Mission Bay
36South redevelopment project area, or to amend any related
37documents or agreements to delete regulatory requirements, zoning
38controls, and the Mission Bay developer’s obligations with respect
39to Parcel P20.

P12   1

SEC. 5.  

Notwithstanding anything to the contrary in Assembly
2Bill 2649, (a) a nontrust lease of Seawall Lot 322-1 may be entered
3into for the same duration as permitted for other designated seawall
4lots, as provided in subdivisionbegin delete (a)end deletebegin insert (c)end insert of Section 4 of Senate Bill
5815, as amended by this act, (b) the operative date of Sections 3
6to 5, inclusive, of Assembly Bill 2649 shall be coterminous with
7the operative date of Sections 3, 4, 4.5, and 6 of Senate Bill 815,
8as provided in Section 7 of Senate Bill 815, as amended by this
9act, and (c) the requirements pertaining to structures, buildings,
10and appurtenances on Seawall Lot 322-1 shall be the same as for
11other designated seawall lots as provided in Section 7 of Senate
12Bill 815, as amended by this act.


SEC. 6.  

The Legislature, in the exercise of its retained power
14as trustee of the public trust, and in view of the unique
15circumstances existing at Seawall Lot 337 and Pier 48 on the San
16Francisco waterfront, hereby authorizes the following:

17(a) Pier 48, the wharf between Pier 48 and Pier 50, and the
18portion of Seawall Lot 337 currently designated for port priority
19use are no longer required for port priority use and shall be deemed
20free of the port priority use area designation as of January 1, 2017.
21BCDC and the Metropolitan Transportation Commission shall
22reprint the seaport plan to reflect the removal of the port priority
23use designation from these areas, but this subdivision shall apply
24regardless of whether the conforming changes have been made.

25(b) As of January 1, 2017, the special area plan is amended to
26include Pier 48 in the northeastern waterfront, which shall be
27deemed to serve the health, safety, and welfare of the entire bay
28area, and BCDC is authorized to issue a major permit for a project
29at Pier 48 applying the special area plan policies and other criteria
30applicable to finger piers in the northeastern waterfront, including
31that the replacement fill policy shall not apply to that project, if
32the project will rehabilitate Pier 48 consistent with the United
33States Interior Secretary’s Standards for Rehabilitation. BCDC
34shall reprint the special area plan to reflect the inclusion of Pier
3548 in the northeastern waterfront, but this subdivision shall apply
36to the Pier 48 project regardless of whether the conforming changes
37have been made.

38(c) Nothing in this act is intended to limit the authority and
39discretion of BCDC to approve or deny permits for the mixed-use
40development on Pier 48 and the marginal wharf between Pier 48
P13   1and Pier 50 generally described in this act in a manner consistent
2with the McAteer-Petris Act or the policies of the Bay Plan and
3the special area plan, as those policies are modified by subdivisions
4(a) and (b), including the authority and discretion of BCDC to
5impose conditions on the permits for the project. This act shall not
6limit the authority and discretion of BCDC to enforce permits
7issued for the projects described in this act.


SEC. 7.  

Section 4 of Chapter 660 of the Statutes of 2007 is
9amended to read:


Sec. 4.  

(a) As used in this act, “nontrust lease” means a lease
11of all or any portion of the designated seawall lots free from the
12use requirements established by the public trust, the Burton Act
13trust, and the Burton Act transfer agreement.

14(b) Except for Seawall Lot 337, the port may enter into a
15nontrust lease subject to the requirements of this section. For
16Seawall Lot 337, the port may enter into a nontrust lease subject
17to the requirements of this section, if the commission has made all
18approvals required in paragraph (3) of subdivision (a) of Section
194.5, and all of the conditions in Section 6 are met.

20(c) Notwithstanding the Burton Act, Section 718 of the Civil
21Code, Section 37384 of the Government Code, or any other
22provision of law to the contrary, the term of any individual nontrust
23lease, including any extension of the term allowed by right of
24renewal, shall not exceed 75 years from the initial occupancy date
25 of the improvements developed on the leased site or development
26parcel, and in no event shall the term of a nontrust lease extend
27beyond December 31,begin delete 2120.end deletebegin insert 2105.end insert The port shall provide the
28commission notice of the initial occupancy date of the
29improvements developed on any leased site or development parcel.
30Nothing in this section shall be construed as limiting the term of
31any lease, or portion thereof, that is for uses consistent with the
32public trust and the Burton Act.

33(d) (1) (A) Except as provided in this subdivision, all nontrust
34lease revenues received by the port shall be deposited in a separate
35account in the harbor fund to be expended for the preservation of
36historic piers and historic structures, or for the construction and
37maintenance of waterfront plazas and open space.

38(B) The port may use its nontrust lease revenues from
39development parcels in Seawall Lot 337 to make port advances to
40fund Seawall Lot 337 infrastructure if the commission has approved
P14   1the port advances under paragraph (3) of subdivision (a) of Section
24.5. This subparagraph shall not limit the port’s authority to use
3nontrust lease revenues for facilities for which expenditures are
4authorized under subparagraph (A).

5 (C) Revenues shall not be expended under this subdivision for
6historic piers or historic structures on land subject to public trust
7use restrictions unless the executive officer of the commission has
8approved the proposed uses of the pier or structure.

9(2) The port may annually transfer from the separate account
10and deposit in the general account of the harbor fund, to be used
11for any purpose consistent with the public trust and the Burton
12Act, an amount equal to the sum of the baseline revenue streams
13for each designated seawall lot subject to one or more nontrust
14leases (leased seawall lots), less any revenues received by the port,
15for the year preceding the transfer of funds, from any portion or
16portions of the leased seawall lots that were not subject to a
17nontrust lease. For purposes of this subdivision, the baseline
18revenue stream for a designated seawall lot is the average annual
19revenue received by the port from that seawall lot over the five
20years prior to January 1, 2008, adjusted for inflation.

21(3) For purposes of this subdivision, the term “revenue” shall
22exclude any costs incurred by the port to administer the lease and
23to operate and maintain the leased property and any improvements

25(4) For each nontrust lease of a designated seawall lot, the port
26shall maintain a separate accounting of all revenues transferred
27pursuant to paragraph (2), all costs excluded pursuant to paragraph
28(3), and all revenues deposited into the separate account. Upon
29request, the port shall submit to the commission a copy of the
30accountings described in this paragraph.

31(5) If the funds in the separate account exceed the amount
32needed for the preservation of historic piers and historic structures
33and for construction of waterfront plazas and open space, the excess
34funds shall be deposited in the harbor fund to be used for purposes
35consistent with the public trust and the Burton Act.

36(e) A nontrust lease shall be for fair market value and on terms
37consistent with prudent land management practices as determined
38by the port and subject to approval by the commission as provided
39in paragraph (1) or as provided in Section 4.5 for a nontrust lease
40for Seawall Lot 337.

P15   1(1) Prior to executing a nontrust lease, the port shall submit the
2proposed lease to the commission for its consideration, and the
3commission shall grant its approval or disapproval in writing within
490 days of receipt of the lease and supporting documentation,
5including documentation related to value. In approving a nontrust
6lease, the commission shall find that the lease meets all of the

8(A) Is for fair market value.

9(B) Is consistent with the terms of the public trust and the Burton
10Act trust, other than their restrictions on uses.

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

12(2) Whenever a nontrust lease is submitted to the commission
13for its consideration, the costs of any study or investigation
14undertaken by or at the request of the commission, including
15reasonable reimbursement for time incurred by commission staff
16in processing, investigating, and analyzing such submittal, shall
17be borne by the port; however, the port may seek payment or
18reimbursement for these costs from the proposed lessee.


SEC. 8.  

Section 4.5 is added to Chapter 660 of the Statutes of
202007, to read:


Sec. 4.5.  

(a) For nontrust leases of Seawall Lot 337, the
22commission shall consider whether the port will receive
23consideration equal to the fair market value based on, and in
24accordance with, all of the following procedures:

25(1) At least 30 days prior to approval by the board of supervisors
26of the development project for Seawall Lot 337, the port shall
27submit the proposed disposition and development agreement
28between the master developer and the port governing the master
29development of Seawall Lot 337 and the following information,
30to the extent not contained in the agreement, to the commission
31for its consideration:

32(A) The proposed procedures for the disposition of nontrust
33development parcels and including the proposed plan of finance
34for the development project that describes the proposed port
35advances for Seawall Lot 337 infrastructure costs.

36(B) The proposed procedures for establishing the fair market
37value of each nontrust lease of a development parcel, including
38the appraisal instructions.

P16   1(C) A description of the nontrust sources that the port expects
2to receive for the project and how theses nontrust sources will be
3applied to the project.

4(D) A description of the manner by which the port will select
5the developer of each development parcel, including the form of
6ground lease, subject to minor modifications for each development
7parcel lease permitted by the transaction documents.

8(2) Following approval of the development project for Seawall
9Lot 337 by the board of supervisors, the port shall submit to the
10commission the project documents described in paragraph (1) as
11finally approved by the board of supervisors.

12(3) Within 75 days after approval of the project by the board of
13supervisors and receipt of all required documentation from the
14port, the commission shall either approve or disapprove the
15procedures for establishing the fair market value of the
16development parcels, the form of ground lease, and the port’s use
17of port advances to pay for Seawall Lot 337 infrastructure costs.
18The commissionbegin delete mayend deletebegin insert shallend insert request additional information or
19documentation from thebegin delete port.end deletebegin insert port, including evidence of financial
20assurances acceptable to the commission that the trust will be
21made whole.end insert
The commission shall not approve the port’s use of
22port advances for the duration of the project unless the commission
23determines that such use of port advances as described in the
24documentation submitted by the port is in the best interests of the
25state, will benefit the public trust, and is on terms and conditions
26consistent with the port’s fiduciary duties as trustee.begin insert The
27commission may only approve the port’s use of port advances if
28it finds that there are sufficient assurances that the trust will be
29made whole.end insert
The commission may take into account information
30required to be submitted pursuant to this section, the benefits of
31the development to the state and to the public trust, the substantial
32begin delete infrastructureend delete investment required in Seawall Lotbegin delete 337
33infrastructure,end delete
begin insert 337,end insert and the contribution of nontrust sources to
34Seawall Lot 337begin delete infrastructure.end deletebegin insert infrastructure that the commission
35determines benefits the trust.end insert

36(4) begin deleteFollowing the commission’s approval in accordance
37withparagraph (3), and end delete
begin insertIf the commission makes an approval
38pursuant to paragraph (3), the port, end insert
prior to entering into a nontrust
39lease for Seawall Lot 337,begin delete the portend delete shall submit to the executive
40officer of the commission a copy of the proposed nontrust lease.
P17   1The port may enter into the nontrust lease unless, within 30 days
2after the submittal, the executive officer has provided the port with
3a written determination that the nontrust lease is inconsistent with
4the commission’s original approval.

5(5) The port shall bear the costs of any study or investigation
6that the commission undertakes or requests, including reasonable
7reimbursement for commission staff time in processing,
8investigating, and analyzing the port’s submittal. The port’s
9reimbursement obligation does not affect its ability to seek payment
10or reimbursement for these costs from the master developer.

11(b) In addition to any statement of expenditures and revenues
12that the port is required by law to submit to the commission
13annually, the port shall provide a separate accounting of all of the

15(1) All consideration from nontrust sources and other revenues
16the port has received in connection with Seawall Lot 337.

17(2) All other revenues that the port has spent on Seawall Lot
18337, including any port advances.

19(3) Any revenues from nontrust sources received by the port to
20repay port advances.

21(c) The port shall provide the commission with copies of the
22final audit report for each phase of the project and the final audit
23report for the project within 90 days after the port receives each
24audit report.

25(d) The port shall periodically, and upon request of the
26commission, submit to the commission a report detailing the
27issuance and repayment of any port advances,begin delete orend deletebegin insert andend insert notify the
28commission where the reports, including staff reports, may be
29accessed electronically. If, within 20 years after the first port
30advance, the port has not submitted an audit report to the
31commission indicating that all of the port advances have been
32repaid, the port shall report to the commission the total amount of
33revenues from nontrust leases that the port used to fund port
34advances, the amount that the port has received to repay port
35advances, the projected sources to repay any balance still owing
36on account of port advances, and the expected timing of repayment
37of the balance still owing. Thereafter, the port shall provide
38supplemental reports containing updates to this information to the
39commission every five years.

P18   1(e) The port shall ensure repayment, with interest, of each port
2advance withinbegin delete 50end deletebegin insert 25end insert years after the port advance is made. The
3port may extend the repayment period beyondbegin delete 50end deletebegin insert 25end insert years subject
4to commission approval. The commission shall base its approval,
5in part, on whether the port is taking actions that ensure the trust
6is made whole, consistent with its fiduciary duties as a trustee of
7the public trust.


SEC. 9.  

Section 7 of Chapter 660 of the Statutes of 2007 is
9amended to read:


Sec. 7.  

begin deleteUpon the termination of the 75-year term end deletebegin insertNo later than
1175 years from the initial occupancy dateend insert
begin insert end insertfor abegin insert designated seawall
12lot orend insert
developmentbegin delete parcel,end deletebegin insert parcel in Seawall Lot 337, and in no
13event later than December 31, 2105,end insert
the use of thebegin insert designated
14seawall lot orend insert
development parcel shall be consistent with the
15public trust, the Burton Act trust, and the Burton Act transfer
16agreement and all structures, buildings, and appurtenances on the
17begin insert desigated seawall lot orend insert development parcel not consistent with
18the public trust, the Burton Act trust, and Burton Act transfer
19agreement, shall bebegin delete repurposed orend deletebegin insert repurposed,end insert modified,begin insert or
20removed,end insert
including any necessary restoration or remediation of
21the seawall lot to facilitate public trust uses.begin delete No subsequent nontrust
22lease shall be granted for any development parcel.end delete


SEC. 10.  

If any provision of this act, or its application to any
24person, property, or circumstance, is held invalid by any court, the
25invalidity or inapplicability of that provision shall not affect any
26other provision of this act or the application of that provision to
27any other person, property, or circumstance, and the remaining
28portions of this act shall continue in full force and effect, unless
29enforcement of this act as so modified by and in response to that
30invalidation would be grossly inequitable under all of the
31circumstances, or would frustrate the fundamental purposes of this


SEC. 11.  

(a) The Legislature finds and declares that, because
34of the unique circumstances applicable only to the lands described
35in this act in the City and County of San Francisco, a statute of
36general applicability cannot be enacted within the meaning of
37subdivision (b) of Section 16 of Article IV of the California

39(b) The Legislature also finds and declares that the exemption
40under Section 4 of this act from the laws governing the dissolution
P19   1of former redevelopment agencies is necessary to address the
2unique circumstances relating to the development of Parcel P20,
3including the fact that the parcel was never owned by a former
4redevelopment agency and the fact that the transfer and use of
5Parcel P20 for the Mission Bay South redevelopment project will
6benefit the state by generating revenues from the various nontrust
7leases of land within the parcel.