BILL ANALYSIS �
AB 2649
Page 1
Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 2649 (Ammiano) - As Amended: March 29, 2012
SUBJECT : Tidelands and submerged lands: City and County of San
Francisco: seawall lots
SUMMARY : Frees seawall lot 322-1 from the use requirements of
the public trust until January 1, 2094; allows for the
development of affordable housing on seawall lot 322-1 and other
designated seawall lots; authorizes the Port of San Francisco
(Port) to sell the transferable development rights in connection
with a historical pier or historical resource on Port property.
EXISTING LAW :
1)Protects, pursuant to the common law doctrine of the public
trust, the public's right to use California's waterways for
commerce, navigation, fishing, boating, natural habitat
protection, and other water oriented activities. The public
trust doctrine provides that filled and unfilled tide and
submerged lands and the beds of lakes, streams, and other
navigable waterways (public trust lands) are to be held in
trust by the state for the benefit of the people of
California.
2)Requires the State Lands Commission (SLC) to be the steward
and manager of the state's public trust lands. SLC has direct
administrative control over the state's public trust lands and
oversight authority over public trust lands granted by the
Legislature to local public agencies (granted lands).
3)Allows SLC to lease trust lands, enter into boundary line
agreements, and in limited circumstances, exchange public
trust lands for non-trust lands.
4)Grants in trust to the Port, pursuant to the Burton Act
(Chapter 1333 of the Statutes of 1968), administrative control
over the public trust lands in the harbor of San Francisco for
purposes of commerce, navigation, and fisheries and subject to
other terms and conditions specified in the act.
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5)Prohibits, pursuant to Section 3, Article X of the California
Constitution, the grant or sale of tidelands to any private
persons, partnerships, or corporations if the tidelands are
within two miles of any incorporated city, city and county, or
town in this state, and fronting on the water of any harbor,
estuary, bay, or inlet used for the purposes of navigation.
The California Supreme Court in Long Beach v. Mansell (1970) 3
Cal. 3d 462 held the following with regard to this
constitutional provision:
We conclude that when lands within two miles of an
incorporated city or town which were subject to the
ebb and flow of the tide at the date of the adoption
of the Constitution?(1) have been found and determined
by the Legislature to be valueless for trust purposes
and are freed from the public trust and (2) have been
or are to be reclaimed pursuant to and in the course
of a highly beneficial public program of harbor
development, such lands--if they constitute a
relatively small parcel of the total acreage
involved--thereupon cease to be tidelands within the
meaning of the constitutional provision and are
subject to alienation into absolute private ownership.
6)Holds, pursuant to the US Supreme Court in Illinois Central
R.R. Co. v Illinois (1892) 146 U.S. 387, that "�t]he control
of the state for the purposes of the �public] trust can never
be lost, except as to such parcels as are used in promoting
the interests of the public therein, or can be disposed of
without any substantial impairment of the public interest in
the lands and waters remaining."
7)Pursuant to SB 815 (Migden), Chapter 660 of the Statutes of
2007 (Chapter 660):
a) Finds and declares that several seawall lots (i.e.
parcels of filled tidelands identified as seawall lots 328,
330, 337, and 347S, including a portion of Mission Rock
Street) in San Francisco, have ceased to be useful for the
promotion of the public trust and the Burton Act trust and
are freed from the use requirements of the public trust and
the Burton Act until January 1, 2094.
b) Authorizes the Port to lease all or any portion of
designated seawall lots free from use requirements
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established by the public trust, the Burton Act trust, and
the Burton Act Transfer Agreement (hereinafter "non-trust
lease"), provided certain conditions are met including:
i) The term of any individual non-trust lease,
including any extension of the term allowed by right of
renewal, does not exceed 75 years, and the non-trust
lease will terminate no later than January 1, 2094.
ii) All revenues received by the Port from the non-trust
lease will 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 required by the special area plan. Prior to
the use of revenues for any pier of structure subject to
public trust restrictions, the executive officer of SLC
must approve the proposed uses of the piers or
structures.
iii) The non-trust lease is for fair market value subject
to the approval of the SLC, which must find that the
lease is consistent with the terms of the public trust
and Burton Act trust other than their restrictions on
use, and that it is in the best interest of the state.
iv) Authorizes the Port to use a portion of the
non-trust lease revenues representing the average annual
revenue received by the Port from the seawall lots over
the five years prior to January 1, 2008 for any purpose
consistent with the public trust and the Burton Act.
THIS BILL
1)Defines 16 terms, including "seawall lot 322-1," which means
"that parcel of real property situated in the �City of San
Francisco] commonly known as seawall lot 322-1, as shown on
that certain map entitled 'revised map of designated seawall
lots,' which is reproduced in Section 8 and is on file with
�SLC] and the �P]ort." Section 8 of the bill contains no map
at this point.
2)Makes over three pages of findings and declarations related to
San Francisco's public trust lands, the Burton Act, the
history of San Francisco's seawall lots, Chapter 660,
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affordable housing in San Francisco, San Francisco's job-house
linkage program, waterfront revitalization, preservation of
the Port of San Francisco's finger piers, San Francisco's
transferable development rights program, and the unique
circumstances applicable to the lands identified in the bill.
3)Declares the following regarding seawall lot 322-1:
a) The lot is presently used for surface parking primarily
serving commuters.
b) The lot was not included in Chapter 660, but like the
other designated seawall lots in that statute, seawall lot
322-1 was filled and reclaimed as part of a highly
beneficial plan of harbor development, has ceased to be
tidelands, is cut off from the water, constitutes a
relatively small portion of the tidelands granted to the
city, and is no longer necessary for public trust or Burton
Act trust purposes.
c) It is the intent of the Legislature that seawall lot
322-1 be freed of the use requirements of the public trust,
the Burton Act trust, and the Burton Act transfer agreement
in the same manner and subject to the same requirements as
the designated seawall lots under Chapter 660, subject to
the additional provisions of this act.
4)Frees Seawall lot 322-1 from the use requirements of the
public trust, the Burton Act trust, and the Burton Act
transfer agreement for the period between the effective date
of this act and January 1, 2094, and shall be treated as a
designated seawall lot for purposes of the authority granted
to the Port under Chapter 660. The Port may enter into a
nontrust lease for all or any portion of seawall lot 322-1,
subject to specific requirements in Chapter 660 and this bill.
5)Requires, as a condition for commencing vertical construction
on seawall lot 322-1 for a nontrust use, the Port to obtain a
certificate of appropriateness or a comparable determination
of compatibility of the development with the historic
character of the surrounding area, as may be provided under
the City of San Francisco's planning code.
6)Authorizes the Port, notwithstanding the fair market value
requirements in Chapter 660, to provide a rent credit or other
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waiver or deferral of rent in connection with either a
nontrust lease of seawall lot 322-1, or, with the approval of
SLC, a lease of any other designated seawall lot or other Port
property that is not subject to public trust or Burton Act
trust use restrictions, that results in an effective rent to
the port below fair market value, if SLC finds that both of
the following conditions are met:
a) The nontrust lease is for affordable housing. The lease
may allow other uses, including, but not limited to,
commercial uses and market rate housing, provided that no
portion of the rent credit, waiver, or deferral is applied
to the rent for those other uses.
b) The port is entitled to apply the value of the rent
credit, waiver, or deferral as an offset against fees or
other exactions or obligations that would otherwise be
levied or imposed by the City of San Francisco on
development projects located on Pier 70, or on other lands
under the Port's jurisdiction, if approved by SLC, relating
to the projects' impacts on or demand for affordable
housing, including, but not limited to, fees imposed
pursuant to the city's jobs-housing linkage program.
7)Requires the Port to provide SLC with documentation necessary
to support the findings required by #6 above at the time the
Port submits the proposed nontrust lease and other
documentation required under Chapter 660.
8)Does not limit the Port's authority to provide rent credits,
waivers, or deferrals under a nontrust lease in exchange for
other valuable consideration provided by the lessee that meets
the fair market value requirement of Chapter 660.
9)Does not limit the Port's authority under the Burton Act to
use or lease the designated seawall lots for uses permitted by
the Burton Act, subject to any applicable limitations of state
law.
10)Makes #4 through #9 above inoperative on January 1, 2094,
after which date the use of the designated seawall lots must
be consistent with the public trust, the Burton Act trust, and
the Burton Act transfer agreement. No later than January 1,
2094, all structures, buildings, and appurtenances on the
designated seawall lots not consistent with the purposes of
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the public trust, the Burton Act trust, and Burton Act
transfer agreement must be removed or modified, including any
necessary restoration or remediation of the seawall lots, to
facilitate public trust uses.
11)Amends the Burton Act to authorize the Port to sell or
transfer development rights associated with a historic pier or
historic resource on Port property, provided that if the
affected Port property is subject to the public trust, the
restriction on the Port's development rights following
transfer be for a period not exceeding 66 years. The Port must
use the proceeds from a transfer of development rights solely
for the furtherance of the purposes specified by the Burton
Act, which include reimbursement of the costs of
rehabilitation of a historic pier or historic resource.
12)Finds and declares that unique circumstances exist at the San
Francisco waterfront, and that therefore this act sets no
precedent for any other location or project in the state.
13)States that "the following map is a part of this act."
However, no map is included in the bill.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the bill. The purpose of this bill is to do the
following:
a) Make factual and legal findings that seawall lot 322-1
is no longer necessary for public trust or Burton Act trust
purposes.
b) Free seawall lot 322-1 from the use requirements of the
public trust, the Burton Act trust, and the Burton Act
transfer agreement for the period between the effective
date of the bill and January 1, 2094.
c) Allow for the development of affordable housing on
seawall lot 322-1 and any of the designated seawall lots
subject to Chapter 660. Since affordable housing will not
provide rent revenue to the port at fair market value, the
Port may provide a rent credit or other waiver or deferral
of rent in connection with a nontrust lease as an offset
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against fees or other exactions or obligations that would
otherwise be levied or imposed by the City on development
projects on lands under the Port's jurisdiction.
d) Authorize the Port to sell the transferable development
rights in connection with a historical pier or historical
resource on Port property. The proceeds from the sale
shall be used solely for the furtherance of the purposes of
the Burton Act.
According to the author, this bill "will authorize the City
and County of San Francisco to build affordable housing as
several Seawall Lots that are no longer needed for trust
purposes. In order to make the Port's land work for
affordable housing, the Port would need to lease affordable
housing sites below market rate."
2)Background on Granted Lands. For over 100 years, the
Legislature has granted public trust lands to local
governments 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 statutes.
3)Background on Seawall Lot 322-1. Pier 70 is a Port site that
is approximately 67 acres located in San Francisco's Central
Waterfront, sitting at the foot of Potrero Hill and generally
located between Mariposa and 22nd Street, east of Illinois
Street. It is home to a handful of the oldest and most
photogenic buildings in San Francisco and receives a
tremendous amount of sunshine compared to other parts of the
city. This site has been identified as a future National
Historic District due to its over 150 years of continuous
operations in ship building and repair and the role it played
in the industrialization of the western United States, the war
efforts, and architectural and engineering feats. Despite its
desirable climate and historical features, Pier 70 is in need
of major rehabilitation as a result of dilapidated and unsafe
structures as well as contamination that occurred during its
long history of industrial use.
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Pier 70 is generally made up of public trust lands. As part
of its Pier 70 master plan, the Port would like to develop
non-trust uses in areas that it believes are least suitable
for public trust uses. The contemplated non-trust development
includes cultural, institutional, office, biotech, other
commercial, and perhaps a limited amount of residential uses.
Seawall lot 322-1, which is located in the Pier 70 area, is
subject to public trust and Burton Act use restrictions. The
Port would like the Legislature to find that the parcel is no
longer useful for trust purposes and temporarily lift the
trust to allow for the development of affordable housing,
which is not a trust consistent use.
Slippery Slope. There is reason to believe that temporarily
lifting the public trust use restrictions from a parcel of
public land through legislation may justify a future act to
permanently lift the trust from the parcel. Given the
significance of eliminating lands from the public's use, the
Legislature should ensure that the state conducts its due
diligence in reviewing the facts and laws to ensure
terminating the trust is appropriate and in the best interest
of the state. This is especially important as the U.S.
Supreme Court, the California Supreme Court, the California
Constitution, common law, and state law have established
strict limits on removing the trust from public trust lands.
Some of these legal limits are explained above in #5 and #6 of
"EXISTING LAW" and were adopted to protect the public's right
to use trust lands.
Chapter 660 provides an example of why there is this slippery
slope concern. Chapter 660 authorized the temporary lifting
of the public trust use restrictions from certain filled
tidelands scattered along the San Francisco's waterfront.
Seawall lot 330 was one of these parcels of filled tidelands.
It is a two acre lot located on The Embarcadero between the
Ferry Building and AT&T Park with unobstructed views of San
Francisco Bay. The justification for temporarily lifting the
trust use restrictions from these filled tidelands was that
(1) the lands were not being used for trust purposes, (2)
significant revenues can be generated from these lands if they
are utilized for nontrust purposes, (3) the revenues generated
from these lands will go to improve other public trust lands,
such as the city's historical piers, and (4) the trust use
restrictions will only be lifted temporarily. No major
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objection was raised to this bill due in large part to the
temporary nature of the act.
On December 14, 2010, a few years after the enactment of
Chapter 660, the City of San Francisco entered into the 34th
America's Cup Host and Venue Agreement with the America's Cup
Event Authority and San Francisco America's Cup Organizing
Committee. In this agreement, the City agreed to a term that
"unconditionally obligat�ed]" it to remove in its entirety the
common law public trust and Burton Act trust from Seawall Lot
330 for conveyance to a private party. The city did not have
the authority to unconditionally obligate itself to this
action.
In 2011, AB 418 (a bill originally focused solely on Pier 70)
was amended in the Senate to permanently terminate the public
trust from Seawall Lot 330. The amendment relied heavily on
the findings made in Chapter 660 to conclude that the parcel
was no longer useful for trust purposes. This provided the
justification in the bill to exclude the parcel from public
use in perpetuity. Because the bill was amended in the
Senate, this committee did not have the opportunity to hear
and consider the significant amendment.
While it may be appropriate in certain circumstances to
permanently terminate the trust from filled tidelands, this
requires a serious consideration of the facts and a thorough
analysis of the public trust doctrine, which constitutionally
allows the Legislature to terminate the trust only if the land
is "valueless for trust purposes." (See #5 of "EXISTING
LAW"). It is difficult to determine if such consideration was
conducted at the state level for the actions involving seawall
lot 330. AB 418 focused on all of the reasons why seawall lot
330 was not useful for trust purposes. However, the bill
downplayed the parcel's close proximity to the San Francisco
Bay and Piers 30-32. It also ignored the property's
unobstructed views of the bay. In other instances, the
Legislature, City of San Francisco, and SLC have found that
areas at Hunters Point and Yerba Buena Island that are located
significantly farther inland than Seawall Lot 330 serve a
public trust purpose by, among other things, providing scenic
views of the bay. As such, simply because of its location and
views, a person, and more importantly a court, could conclude
that seawall lot 330 is not "valueless for trust purposes."
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Below is a graphic prepared by the San Francisco mayor's
office that shows how seawall lot 330 is situated along the
city's waterfront. Note the graphic's proposed use of seawall
lot 330 for the America's Cup. Tourist serving purposes
related to the waterfront and public trust activities (such as
the purposes proposed for seawall lot 330 in this graphic)
have generally been recognized by the courts as being
consistent with the public trust doctrine. (See Martin v.
Smith (1960) 184 Cal.App.2d 571). This is another example of
how one could reasonably conclude that seawall lot 330 is not
"valueless for trust purposes."
To ensure that lifting the trust use requirements is
appropriate, to protect the public's right to public trust
lands, and to assure the public gets fair consideration when
the trust is permanently terminated, the author and committee
may wish to amend this bill to condition the temporary lifting
of the trust use restrictions from seawall lot 322-1 on SLC's
review of the facts and law and on a finding, made at a public
hearing, that such action is justified and in the state's best
interest. SLC has the legal expertise and the staff to
perform the state's due-diligence on this issue. It conducts
similar reviews pursuant to its authority under Sections 6307
and 6701, et seq. of the Public Resources Code and under the
terms of certain granting statutes. This amendment will
hopefully set the precedent that all future actions to
temporarily or permanently lift the trust use restrictions or
terminate the trust from public lands will receive a full
vetting by the state agency best equipped to handle the
review. This will avoid a scenario where the state is faced
with temporarily lifting the trust use restrictions and then
permanently terminating the trust on the same property without
a thorough state review of whether such are actions legally
justified and in the best interests of the state.
4)Double Referral . This bill was passed out of the Assembly
Local Government Committee on April 18 with a vote of 8-0.
REGISTERED SUPPORT / OPPOSITION :
Support
Port of San Francisco
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Opposition
None on file
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092