BILL ANALYSIS �
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
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BILL NO: AB 2649 HEARING DATE: June 26, 2012
AUTHOR: Ammiano URGENCY: No
VERSION: May 2, 2012 CONSULTANT: Katharine Moore
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Tidelands and submerged lands: City and County of San
Francisco: seawall lots.
BACKGROUND AND EXISTING LAW
The State Lands Commission (commission) was created in 1938 and
is the steward and manager of the state's public trust lands.
Public trust lands are filled and unfilled tide and submerged
lands and the beds of lakes, streams, and other navigable
waterways that are held in trust by the state for the benefit of
the people of California. The common law doctrine of the public
trust requires that the public's right to use California's
waterways for commerce, navigation, fishing, boating, natural
habitat protection and other water-oriented activities must be
protected. The commission has administrative control over the
public trust lands and oversight authority over public trust
lands granted by the Legislature to local public agencies. The
commission also has the authority to lease trust lands, enter
into boundary line agreements, and, in limited circumstances,
exchange public trust lands for non-trust lands. In general,
tidelands within two miles of any incorporated city, city and
county, or town and fronting the water of any harbor, estuary,
bay or inlet used for navigation cannot be granted or sold to a
private entity unless certain conditions are met. These
include: the Legislature finds that they are valueless for trust
purposes, the Legislature frees them from the public trust, the
lands have been reclaimed during the course of a highly
beneficial public program of harbor development, and the lands
constitute a minor fraction of the total public trust acreage.
Case law (Illinois Central RR Co v. Illinois (1892) 146 US 387)
also holds that sovereign public trust lands cannot be lost from
the public trust unless they "can be disposed of without any
substantial impairment of the public interest in the lands and
waters remaining."
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The Burton Act (act) (c. 1333, Statutes of 1968) granted in
trust to the Port of San Francisco (port) 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. The act has
been amended several times since.
SB 815 (Migden, c. 660, Statutes of 2007) made several changes
affecting public trust lands in the City and County of San
Francisco. 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) were freed from the
use requirements of the public trust and act until January 1,
2094 as they had ceased to be useful to the promotion of the
public trust. The port was authorized to lease all or part of
the designated seawall lots free from the use requirements of
the public trust, the act trust and the act Transfer Agreement,
provided specified conditions were met. Revenues from these
"non-trust leases" must be deposited in a separate account in
the harbor fund and used for the preservation of historic piers
and structures or for 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 commission's executive officer is required to
approve the proposed uses. There are other requirements
including that the non-trust lease must be for fair market
value, subject to the commission's approval, and is in the best
interest of the state, among others. The port is also
authorized to use part of the non-trust lease revenues, as
specified, for any purpose consistent with the public trust and
the act.
PROPOSED LAW
This bill would:
Define certain terms including "seawall lot 322-1,"
located in the city's Northeast Waterfront Historic
District (on the edge of the North Beach District), and
"Pier 70", located on the waterfront approximately mid-way
between China Basin (i.e. AT&T Park) and Hunter's Point to
the south
Declare numerous legislative findings regarding the act,
San Francisco's historic maritime resources and their need
of repair, the statewide interest in that repair, the
historic and public trust value of Pier 70, the challenges
to the development of Pier 70 including its public trust
purposes, the need for the port to reduce development costs
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and increase revenues in order to revitalize the waterfront
while encouraging affordable housing development on port
lands no longer needed for trust purposes and still
providing overall public trust benefits of statewide value,
San Francisco's commitment to promote affordable housing
and its programs to do so, and the role of "transferable
development rights" in encouraging the preservation of
historic resources, among others.
Require that seawall lot 322-1 remains subject to the
public trust, the act trust and the act transfer agreement
until the commission finds that (a) it is no longer
necessary for public trust purposes and (b) lifting the use
requirements until January 1, 2094 is in the best interest
of the state. The port may then enter into a non-trust
lease for all or any portion of seawall lot 322-1 subject
to specified conditions (e.g. fair market value, allowable
expenditures of funds for public trust purposes).
Development must be demonstrably consistent with the
historic neighborhood
Allow the port to provide - conditioned on approval of
the commission - a rent credit or other waiver or deferral
of rent in connection with a non-trust lease of seawall lot
322-1 or any other designated seawall lot or other port
property not subject to the use restrictions of the public
trust, the act trust or the act transfer agreement if the
commission finds that (a) the non-trust lease is for
affordable housing and - if other leasing occurs - no rent
credit is applied for the other uses, and (b) the port can
apply the rent credit as an offset of fees that would
otherwise be levied by the city for Pier 70 or other
specified development projects.
Require the port to provide the commission with
appropriate documentation, as specified, in order for the
commission to make informed decisions.
Allow the port to provide other credits, waivers or
deferrals under a non-trust lease in exchange for other
valuable considerations that meet the fair market value
requirement of SB 815 and not limit the port's authority
over the designated seawall lots under the act, as
specified.
Provide that on January 1, 2094, the sea wall lots and
buildings thereon shall be modified, restored and
remediated, as necessary, to facilitate public trust uses
when the sea wall lots are returned to the public trust.
Amend the act to permit the transfer by the port
commission of the port's transferable development rights,
as defined by the city's planning code, in connection with
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the preservation of a historic pier or structure under the
port's jurisdiction if there are no foreseeable public
trust needs for the development rights, and subject to
other specified restrictions. The proceeds may only be
used for the purposes of the act including the preservation
of historic piers and structures.
Find that a special law is necessary given the unique
circumstances and provide for the severability of the
bill's provisions.
ARGUMENTS IN SUPPORT
According to the City and County of San Francisco, this bill
authorizes them "to build affordable housing at several sites
that are no longer needed for trust property, subject to
approval by the �commission]. The port anticipates using
seawall lot 322-1 for affordable housing partnering with the
Mayor's Office of Housing."
"In SB 815, the state legislature authorized leasing of port
seawall lots at fair market value for non-trust purposes for
periods of up to 75 years, with net proceeds dedicated to trust
uses and specifically, to historic rehabilitation of the port's
finger piers and construction of parks."
"Under AB 2649, the port would receive fair market value for its
site through a credit toward local affordable housing fees
arising from the redevelopment of Pier 70. The port's Pier 70
Master Plan �?] calls for retention of the ship repair use at
Pier 70, environmental remediation of the site, 6,000 - 8,000
new jobs, approximately 20 acres of parks and open space,
development of more than 3 million square feet of new commercial
uses, and the listing of Pier 70's numerous historic buildings
as a district to the National Register of Historic Places."
ARGUMENTS IN OPPOSITION
None received
COMMENTS
This may not result in more affordable housing . While one of
the purposes of this bill is to permit affordable housing to be
constructed if certain conditions are met, it does not require
it. The port intends to offer seawall lot 322-1 at below market
rate to the San Francisco Mayor's Office of Housing for
affordable housing. In order to preserve value for the trust
consistent with the principles of SB 815, the port would receive
credits against the Jobs-Housing-Linkage ordinance fees owed for
port development of Pier 70 or another site. These credits will
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depend upon action by the San Francisco Board of Supervisors
(board) to amend the ordinance which, while in process, has not
yet occurred. Current projections are that the port will owe on
the order of $30 million in affordable housing fees for Pier 70
redevelopment.
Transferable development rights can generate funding for Pier 70
redevelopment too . Owners of historic buildings in San
Francisco can raise private money to fund historic preservation
through the use of transferable development rights. Local
zoning specifies certain floor-area ratios for new buildings.
Historic buildings tend to have lower floor-area ratios than
zoning currently allows. In San Francisco, it is possible to
sell unused portions in one location to developers to use
elsewhere with certain restrictions. This bill allows the port
to take advantage of this mechanism, although, again, this will
depend upon action by the board. It is another potential method
to raise funds, in this case privately, for the development of
Pier 70 and other port properties, with the added benefit or
promoting urban infill development.
Pier 70 . Pier 70 is a port site of approximately 67 acres in
San Francisco's Central Waterfront. It is located at the foot
of Potrero Hill and is east of Illinois Street, between Mariposa
and 22nd Streets. 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, the role it
played in the industrialization of the western United States and
several war efforts, its historic architecture and engineering
accomplishments. Pier 70 is in need of major rehabilitation due
to dilapidated and unsafe structures as well as contamination
that occurred during its long history of industrial use. Pier
70 is generally made up of public trust lands. As part of the
Pier 70 master plan, the port wants to develop non-trust uses in
areas that it believes are least suitable for public trust uses.
Non-trust development is likely to include cultural,
institutional, office, biotech, other commercial, and perhaps a
limited amount of residential uses. According to documents
provided by the City and County of San Francisco, the current
Pier 70 redevelopment plans have a projected deficit of more
than $50 million (net present value) in 2009 dollars.
Suspending the public trust on seawall lot 322-1 for affordable
housing and receiving the probable local affordable housing fees
is one method to do that.
Seawall lot 322-1 . Seawall lot 322-1 is currently subject to
public trust and act use restrictions. It is currently a
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parking lot. It is located a few blocks south of Levi Plaza to
the west of Market Street, on Davis Street between Broadway and
Vallejo Street. It is across the Embarcadero from the bay.
There appear to be views through to the bay from the property.
The port wants the Legislature to find that it 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.
Lifting the public trust . 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. These legal limits were
adopted to protect the public's right to use trust lands. It is
important to acknowledge that lands not immediately adjacent to
the bay are not automatically of no public trust value. For
example, in other instances, the Legislature, City of San
Francisco, and the commission have found that areas at Hunters
Point and on Yerba Buena Island that are located significantly
farther inland than seawall lot 322-1 serve a public trust
purpose by, for example, providing scenic views of the bay.
This bill provides for the commission to provide some oversight
to this process for seawall lot 322-1. The commission must find
that the lot is no longer necessary for trust or act purposes
and that it is in the best interests of the state to suspend the
public trust on the parcel until 2094. Further, subject to
specified restrictions and pursuant to SB 815 requirements, the
commission has to approve non-trust lease arrangements for
seawall lot 322-1, or other port property not subject to public
trust use restrictions in instances where the property is being
used for affordable housing at below market rents and the port
is using a rent credit or similar as an offset against fees
otherwise imposed by the city on development projects at Pier 70
or other port properties.
Related legislation
AB 418 (Ammiano, c. 477, Statutes of 2011) authorized certain
swaps of parcels in an out of the public trust to facilitate San
Francisco's hosting of the 34th America's Cup, among other
provisions.
AB 1199 (Ammiano, c.664, Statutes of 2010) authorized the City
and County of San Francisco to create infrastructure financing
districts that include specified waterfront property in order to
fund waterfront restoration and provide waterfront access.
SB 815 (Migden, c. 660, Statutes of 2007) authorized the
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suspension of certain public trust lands from the public trust
in the City and County of San Francisco for 75 years in
specified circumstance, among other provisions.
SUPPORT
City and County of San Francisco
OPPOSITION
None Received
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