BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2797

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          Date of Hearing:  May 11, 2016


                               Lorena Gonzalez, Chair

          2797 (Chiu) - As Amended April 13, 2016

          |Policy       |Natural Resources              |Vote:|9 - 0        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |Local Government               |     |8 - 0        |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill authorizes the Port of San Francisco (Port) to loan  
          specified non-trust lease revenues for infrastructure costs for  
          the development of the Mission Rock Project (Seawall Lot 337),  
          and expands its boundaries, as specified.  Additionally, this  

          1)Requires the State Lands Commission (SLC) to approve or deny  


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            Port advances within 75 days after the San Francisco Board of  
            Supervisors approves the project, as specified.

          2)Requires the Port to pay for any study or investigation SLC  
            undertakes, as specified.

          3)Requires the Port to repay advances with interest within 50  
            years, unless the time period is extended by SLC.

          FISCAL EFFECT:

          Increased, reimbursable costs for SLC to review, and approve or  
          deny the trust revenue advances.

          Potential significant temporary losses of local trust revenue,  
          in the tens of millions of dollars range, during the period  
          between the advance and repayment of the loan (up to 50 years,  
          or more).  The Port estimates the infrastructure costs at  
          Seawall Lot 337 will exceed $150 million dollars. 


          1)Purpose.  According to the author, following the enactment of  
            SB 815, the Port initiated a planning process for Seawall Lot  
            337.  In 2009, the Port selected a development team led by the  
            San Francisco Giants for exclusive negotiations with the Port  
            for the development of Seawall Lot 337.  

            The proposed development at Seawall Lot 337 and Pier 48 is 28  
            acres and includes former tidelands lying between Mission Bay  
            to the south, and China Basin and the Giants ballpark to the  


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            north. This bill provides the infrastructure financing  
            necessary to develop the Mission Rock project.

          2)Background.  The San Francisco waterfront includes a number of  
            seawall lots controlled by the Port, that have been used for  
            decades as parking lots, a use that is inconsistent with the  
            trust and does not conform with the surrounding urban  
            landscape.  SB 815 (Migden), Chapter 660, Statutes of 2007,  
            freed trust use restrictions from the seawall lots along the  
            Embarcadero, and allowed the Port to lease these properties at  
            market rates for non-trust purposes provided specified  
            conditions were met.  

            Revenues from these non-trust leases are required to be  
            deposited into a separate account and used for the  
            preservation of historic piers and construction or the  
            construction and maintenance of waterfront plazas and open  
            space, as specified.  

            Before using any revenues for any pier or structure subject to  
            public trust restrictions, the SLC's executive officer is  
            required to approve the proposed uses.  The port is also  
            authorized to use part of the non-trust lease revenues for  
            purposes consistent with the existing public trust law.  SB  
            815 authorized leases for nontrust uses to have 75-year terms  
            until January 1, 2094, at which time the public trust  
            restrictions on the land are restored.

          3)Public Trust and Granted Lands.  The Public Trust Doctrine  
            protects the public's right to use California's waterways for  
            commerce, navigation, fishing, boating, natural habitat  
            protection, and other water-oriented activities.  


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            The Public Trust Doctrine requires filled and unfilled tide  
            and submerged lands and the beds of lakes, streams, and other  
            navigable waterways to be held in trust by the state for the  
            benefit of the people of California.

            The Legislature has granted public trust lands to local  
            trustees so the lands can be managed locally for the benefit  
            of the people of California.  There are over 80 trustees in  
            the state, including the ports of Los Angeles, Long Beach, San  
            Diego, San Francisco, Oakland, Richmond, Benicia, and Eureka.   
            While these trust lands are managed locally, SLC has oversight  
            authority to ensure those local trustees are complying with  
            the public trust doctrine and the applicable granting  

          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)