BILL ANALYSIS
SB 815
PageA
Date of Hearing: July 2, 2007
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Loni Hancock, Chair
SB 815 (Migden) - As Amended: June 26, 2007
SENATE VOTE : 38-0
SUBJECT : Tidelands and submerged lands, public trust doctrine;
Treasure Island.
SUMMARY : Authorizes the removal of the public trust on "paper
streets" and the lifting of public trust use restrictions on
certain seawall lots in the City of San Francisco, and adds a
federal land parcel to an exchange of public trust lands and
non-trust lands on Treasure Island and Yerba Buena Island.
EXISTING LAW :
1)Section 3 of Article X of the California Constitution
prohibits all tidelands within two miles of any incorporated
city, city and county, or town from being granted or sold to a
private party with the exception of tidelands that have been
reserved to the state solely for street purposes. These
tidelands may be sold to a local government or private party
if the Legislature finds that these tidelands are not used or
necessary for navigation purposes. The Legislature may impose
conditions on such a sale in order to protect the public
interest.
2)Pursuant to Chapter 41 of the Statutes of 1851, as amended,
and Chapter 543 of the Statutes of 1867-68, as amended by
Chapter 388 of the Statutes of 1869-70, the state sold certain
tidelands in the City and County of San Francisco (City) into
private ownership. However, some of the tidelands in the
City, including paper streets, were withheld from sale and
reserved to the state solely for street purposes.
3)Pursuant to Chapter 1333 of the Statutes of 1968 (Burton Act),
the state conveyed its title and interest in Burton Act lands
(e.g., San Francisco's tidelands and submerged lands),
including paper streets, to the City in trust. These lands
are subject to the public trust and are held by the Port of
San Francisco (Port) as trustee.
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4)SB 1873 (Burton), Chapter 543, Statutes of 2004 enacted the
"Treasure Island Public Trust Exchange Act" which authorizes
an exchange of public trust lands at Treasure Island that are
no longer useful for public trust purposes for non-trust lands
useful for public trust purposes at Yerba Buena Island,
subject to the (State Lands Commission) Commission's approval.
The Treasure Island Development Authority (TIDA) has been
designated as the redevelopment agency for these properties,
and thus serves as the trustee of the public trust on these
lands.
5)Division 6 (commencing with Section 6001) of the Public
Resources Code creates the Commission which has jurisdiction
over tidelands and submerged lands of the state.
6)Establishes the San Francisco Bay Conservation and Development
Commission (BCDC) and requires any person wishing to place
fill, to extract materials, or to make any substantial change
in use of any water, land or structure, within the area of
BCDC's jurisdiction to secure a permit from the commission.
In 2003, BCDC adopted a Seaport Plan to ensure that sufficient
space in or around San Francisco Bay is allocated to
port-priority uses.
THIS BILL :
1)Defines "Designated Seawall Lots" or seawall lots to mean any
or all of the parcels of real property located in the City
commonly known as Seawall Lots 330, 328, 347S, 324, 322-1,
321, 314 and 337, including a portion of Mission Rock Street.
2)Finds that the seawall lots were filled and reclaimed as part
of a highly beneficial plan of harbor development, have ceased
to be tidelands, and constitute a relatively small portion of
the tidelands granted to the city.
3)Finds that some of the seawall lots currently support public
trust uses or are designated as port priority use areas in the
Seaport Plan. At the same time, finds that they have also
ceased to be useful 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 and certain other
uses.
4)Declares the intent of the Legislature that the seawall lots
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314, 321, 321-1, 324, and 337 should be freed of the use
requirements of the public trust, the Burton Act trust, and
the Burton Act Transfer Agreement, but should otherwise
continue to be held by the Port subject to the terms and
conditions of the public trust, the Burton Act trust, the
Burton Act Transfer Agreement, and any requirements of this
act provided that revenue derived from the leasing of the
seawall lots be deposited in the harbor fund to be used to
fund the preservation of the historic piers and other historic
structures and the construction and maintenance of waterfront
plazas and open space.
5)Authorizes the Port to lease all or any portion of seawall
lots 314, 321, 321-1, 324, and 337 free from use requirements
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:
a) 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;
b) 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 the Commission must approve the
proposed uses of the piers or structures.
c) the non-trust lease is for fair market value subject to
the approval of the Commission, 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.
6)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, adjusted for inflation for any purpose
consistent with the public trust and the Burton Act.
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7)Requires seawall lot 337 to remain subject to public trust use
restrictions until certain conditions are met, including
approval by BCDC of an amendment to the Seaport Plan priority
use designation applicable to seawall lot 337, and approval by
the Commission of a study to determine land uses within the
seawall lot.
8)If use and lease of seawall lots ___ and 314 eliminate any
existing visitor or employee parking, they must remain subject
to the use requirements of the public trust, the Burton Act
trust, and the Burton Act Transfer Agreement until the Port
has identified alterative parking facilities.
9)Subjects seawall lots 314, 321, 321-1, and 324 to height
and/or bulk limitations existing as of January 1, 2007 or to
local historic district requirements.
10)Sunsets above provisions relating to seawall lots on January
1, 2094, after which the use of the 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, structures on the Designated Seawall Lots not useful for
purposes of the public trust, the Burton Act trust, and Burton
Act Transfer Agreement must be removed or modified to
facilitate trust uses.
11)Defines "paper streets" as those comprising portions of
Daggett, Texas, and Ingalls Streets, and Custer, Evans, and
Arthur Avenues in the City.
12)Finds that interest of the state in the paper streets was
reserved to the state solely for street purposes, and that the
paper streets are no longer used or necessary for navigation
purposes.
13)Authorizes the City, subject to the approval of the
Commission, to lease, sell or transfer all or any portion of
the paper streets or any interest therein to any private
person free of the public trust, the Burton Act trust, and any
additional restrictions on use or alienability created by the
Burton Act transfer agreement. The Commission must find that
the lease, sale, or other transfer of the paper streets or
interest therein represents fair market value, and adopt a
resolution as specified.
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14)Requires all revenues from the sale or lease of the paper
streets to be deposited into the harbor trust fund established
by the City pursuant to the Burton Act and that these revenues
can only be expended to implement the Port's capital plan.
15)Declares that the conditions of a sale or lease established
by the bill will protect the public interest in accordance
with Section 3 of Article X of the California Constitution.
16)Reserves all minerals and the state's right to these mineral
rights on the transferred tidelands subject to specified
conditions.
17)Presumes that any lease of a seawall lot or agreement, deed,
or other instrument governing the sale of paper streets is
valid unless challenged in court within 60 days of recordation
of the agreement or instrument.
18)Defines "Job Corps parcel" to mean that property lying within
the City comprising that portion of the TIDA Property commonly
referred to as the Job Corps Center, Treasure Island, which
was transferred to the United States Department of Labor.
19)Specifies that the redevelopment of Treasure Island includes
the completion of hazardous materials remediation.
20)Subject to the approval of the Commission, authorizes any
portion of Job Corps parcel to be incorporated into the
exchange authorized by the Treasure Island Public Trust
Exchange Act, either as part of the main exchange or in one or
more subsequent phases, in accordance with certain specified
conditions. The Commission must find that:
a) any Job Corps parcel lands to be exchanged into the
trust will enhance the configuration of trust lands on
Treasure Island;
b) any Job Corps parcel lands to be exchanged out of the
trust have been filled and reclaimed, are cut off from
access to navigable waters, are no longer needed or
required for the promotion of the public trust, and
constitute a relatively small portion of the granted
tidelands within the city; and,
c) the inclusion of the Job Corps parcel lands in the
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exchange will not result in substantial interference with
trust uses and purposes; and,
d) the cumulative value, as defined, of all of the TIDA
property exchanged into the trust is equal to or greater
than the cumulative value of all of the TIDA property
exchanged out of the trust, after the Job Corps parcel
lands are included in the exchange.
21)Updates a map of Treasure Island showing the lands to be free
of the public trust, including the Job Corps parcel, and the
lands subject to the public trust upon completion of the
exchange pursuant to the Treasure Island Public Trust Exchange
Act.
22)Makes numerous legislative findings and declarations.
FISCAL EFFECT : Minimal costs; this bill was reported from the
Senate Appropriations Committee pursuant to Senate Rule 28.8.
COMMENTS :
1)Background-Public Trust Doctrine . At its core, the public
trust doctrine originated from the concept of common property
based on Roman law, under which the air, rivers, sea and
seashore were dedicated solely for public use and enjoyment.
This principle evolved into the public trust doctrine under
English common law, which established that the sovereign or
state held the navigable waterways and submerged lands, not
for private purposes, but "as trustee of a public trust for
the benefit of the people" for uses such as commerce,
navigation and fishing. When California was admitted to
statehood in 1850, it gained title to about four million acres
of the lands under navigable waters and tide and submerged
lands and to this day holds this title in trust for the
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public.<1> In essence, the public trust reflects an
understanding that these waters and lands should be enjoyed by
all the people because they are too important to be reserved
for private use.
However, this doesn't mean that no water-related development
can occur. The public trust doctrine permits states to
develop waterways by building ports, docks, and wharves, thus
furthering the traditional purposes of the trust related to
commerce, navigation, and fishing. In more recent years, the
California Supreme Court has held that the public trust
includes the right of the public to use navigable waters for
bathing, swimming, boating, and general recreational purposes.
According to the Commission, "[the public trust] is
sufficiently flexible to encompass changing public needs, such
as the preservation of the lands in their natural state for
scientific study, as open space and as wildlife habitat."
The Legislature is the ultimate administrator of the trust and
the arbiter of what constitutes a permissible use. As stated
by the Commission, "All uses, including those specifically
authorized by the Legislature, must take into account the
overarching principle of the public trust doctrine that trust
lands belong to the public and are to be used to promote
public rather than exclusively private purposes. The
Legislature cannot commit trust lands irretrievably to private
development because it would be abdicating the public trust."
Nonetheless, within these confines, the Legislature has
considerable discretion, including the granting of lands in
trust to a local government, leasing of trust lands by private
entities, or exchanging trust lands for non-trust lands of
equal value. In the first two instances, however, all uses
must be consistent with and promote the trust even in cases
where non-trust uses are authorized. In limited
circumstances, the Legislature has terminated trust
restrictions.
--------------------------
<1> Soon after statehood, the Legislature began to sell into
private ownership vast tracts of tidelands, often at public
auction. In San Francisco Bay, large parcels were sold by deeds
purporting to transfer title in fee simple absolute (without
conditions). However, many of these transfers were fraudulently
made. Today, nearly one-quarter of the Bay is claimed by
private parties. Of the remainder, one-quarter has been granted
by the state to local governments, the state owns one-half, and
the federal government five percent.
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2)Port of San Francisco . The Commission oversees the state's
public trust lands unless the Legislature grants certain in
trust lands to local governments for management. A grantee
must manage trust lands consistent with the associated
granting statute and the public trust doctrine. In 1968, the
Legislature enacted the Burton Act, which transferred, in
trust, the interest of the state in, and the control and
management of, the Port of San Francisco. However, when this
occurred, the Port's assets were in poor condition. For
example, 23 of the piers transferred in 1968 were virtually
unusable for maritime purposes because of their poor physical
condition. Those piers which were structurally sound were
only marginally productive because containerized shipping was
already replacing break bulk shipping at the time of the
transfer.
The City was also required to assume $55 million of the
state's bond debt, which, according to the Port, hampered its
ability to make capital improvements to its assets. The age
and condition of Port facilities, some of which are historic
structures at the end of their useful life, combined with
their construction on filled tidelands in a high risk seismic
area, has created a significant capital funding challenge for
the Port. In fact, the Port states that it may be forced to
close some or all of the seven piers with the largest unfunded
needs.
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3)Purpose of bill . There are four distinct elements to this
bill, all pertaining to the City: 1) an update to a map
delineating the final exchange of public trust and non-trust
lands at Treasure Island; 2) authorization to add to or remove
from the public trust any portion of a 36-acre parcel of
federal land on Treasure Island as part of an exchange
permitted in existing law; and 3) authorization to lease,
sell, or transfer all or any portion of the "paper streets"
free of the public trust; and 4) authorization to lift public
trust restrictions on the seawall lots in San Francisco.
It should be noted that the sponsors of this bill have worked
closely with Commission staff on this bill and have secured
its support for it.
4)Treasure Island Public Trust Exchange . Treasure Island is an
artificial island that was built during the 1930s by
depositing fill on state tidelands lying to the north of Yerba
Buena Island, a large natural rock outcrop in the middle of
San Francisco Bay that anchors the western and eastern spans
of the San Francisco-Oakland Bay Bridge. U.S. Naval
operations ceased in 1997 but the U.S. Coast Guard continues
to operate from a station on the south side of Yerba Buena
Island.
State law generally authorizes exchanges of public trust and
non-trust lands of equal value whenever it is in the best
interest of the state in furtherance of the public trust. SB
1873 (2004) specifically authorized an exchange of public
trust lands on Treasure Island for lands not protected by the
public trust on Yerba Buena Island in order to facilitate
economic redevelopment, primarily residential units, and to
promote public trust purposes on other portions of Treasure
Island. Since passage of SB 1873, the City has been involved
in a public planning process that culminated with the adoption
of a development plan, including a revised land use plan and
map, in 2006. The new plan proposes a development footprint
that creates a more compact and walkable neighborhood with a
more cohesive configuration of public open space. This bill
includes these changes to this map.
Other provisions of this bill pertain to a 36-acre Jobs Corps
Center on Treasure Island owned by the U.S. Department of
Labor. The Job Corps Center, operating on Treasure Island
since 1997, is an educational and vocational training program
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for disadvantaged young adults. According to TIDA, while
there are no immediate plans to transfer the parcel out of
federal ownership, this bill anticipates such a transfer and,
more importantly, gives TIDA the opportunity to include the
parcel in the exchange. Otherwise, the additional value
gained by transferring lands on Yerba Buena Island into the
trust would be "lost." This bill allows TIDA to capture that
value.
5)Selling or leasing of trust lands as a fundraising mechanism
for the Port . In response to the deteriorating condition of
some of its facilities, the Port has developed a ten year
Capital Plan (Plan). The cost to fully implement this Plan,
which primarily involves seismic retrofits and deferred
maintenance on 39 pier structures, 80 substructures, 245
commercial and industrial buildings, over three miles of
streets and sidewalks, and other assets such as dry docks and
cargo cranes, is estimated to be $1.4 billion. However, of
this amount, the Port states that it still needs to raise
about $887 million.
The sale of the paper streets-though only expected to generate
several million dollars-and the leasing of seawall lots
authorized by this bill will help meet this shortfall. While
some may bristle over such a scheme, this bill, with
appropriate safeguards, attempts to embody the need to balance
the loss of public trust uses with the need to maintain Port
infrastructure, including historic piers and buildings.
According to the sponsor, the breakbulk finger piers are among
only a few remaining in the nation. Without this capability,
some of this infrastructure may need to be demolished, leading
to the loss of a public trust use and any future uses its
repair would facilitate.
a) Paper streets not suitable for navigation or other trust
purposes
In 1969, the Burton Act granted to the Port title to the
City's tidelands and submerged lands and subsequently mapped
these areas on maps known as the Burton Act maps. In addition
to areas of land commonly understood to be Port jurisdiction,
the Burton Act maps show a complicated network of street
fragments, either underlying actual City streets or in areas
unrelated or only partially related to the City's network of
adopted streets. These streets, which amount to about 3.4
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acres, were mapped in advance of filling the Bay. After
filling of Bay parcels, blocks were often sold into private
ownership while the street areas remained in State ownership.
However, according to the Port, some of the streets have been
developed with structures, such as those associated with a
former Glidden Paint factory and PG&E's Hunters Point Power
Plant. The Port is collecting back rent from PG&E and is in
litigation with other alleged property owners.
This bill terminates all public trust restrictions for these
streets and authorizes the City, subject to the approval of
the Commission, to lease, sell or transfer all or any portion
of the paper streets to any private person. The Commission
must find that the lease, sale, or other transfer of the paper
streets represents fair market value and all revenues can only
be expended to implement the Port's capital plan. Since none
of the streets are used nor suitable or necessary for
navigation or any other public trust purpose, this is a
reasonable action consistent with Article X of the California
Constitution.
b) Seawall lots: leasing prized artwork to save the museum
Finally, this bill authorizes the Port to lease five seawall
lots for a maximum of 75-years without use restrictions
imposed by the public trust or Burton Act until January 1,
2094. These seawall lots, which represent approximately four
percent of the lands granted to the city under the Burton Act,
are a remnant of the City's historic shoreline. Pursuant to
Chapter 219, Statutes of 1878, the Legislature authorized the
waterward expansion of the northern shoreline through the
construction of a new seawall and the filling of the
intervening tidelands. This net gain in "land," known as the
seawall lots, were retained in state ownership and used as
rail yards or to support cargo operations on the piers. On
top of the new seawall, is the present day Embarcadero
Boulevard.
According to the sponsor, these lots serve no useful public
trust purpose with the exception of their use as parking lots
for commuters or visitors to the waterfront (including parking
for the San Francisco Giants' ballpark) and the associated
generation of revenues to support Port operations. Under the
bill, even though the lots must otherwise be held by the Port
subject to the public trust and Burton Act (i.e., they cannot
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be sold), for the lease term the Port can use the lots for
whatever it pleases subject to certain conditions. For
example, all non-trust lease revenues (minus a baseline amount
for the maintenance of the lots) must be deposited in a
separate account and spent on the preservation of the historic
piers and structures or the development of waterfront plazas
and open space (required by certain planning documents). The
non-trust lease must be for fair market value and subject to
the approval of the Commission. Though controversial, the
author also agreed to provisions that impose height and bulk
or historic zoning restrictions as they existed on January 1,
2007 (there is reportedly a proposal to increase height or
bulk limitations).
Current law prohibits the leasing of tidelands or submerged
lands granted to any city by the state for a period more than
66 years unless the grant from the state provides otherwise
(which it does not). This bill provides, however, for a
75-year lease term because the sponsor asserts that any lesser
term would not be financially viable. Regardless, the bill
provides that after January 1, 2094 structures on the seawall
lots not useful for purposes of the public trust or Burton Act
must be removed or modified to facilitate trust uses. In
order to attain fair market value, the Port will likely lease
the lots for some form of residential use, such as
condominiums. After the lease term, one reasonable scenario
is the conversion of these condos to condo-hotels. According
to the Commission, a hotel is an appropriate trust use since
it accommodates or enhances the public's ability to enjoy tide
and submerged lands. Based on prior legislation (see below),
it is likely that the Port will request subsequent legislation
to permanently authorize residential uses provided that the
lease revenues be dedicated to public trust purposes.
Notwithstanding these scenarios (which could be among many),
the bill does not contain any further requirement for a lessee
to restore or remediate the lots to their original conditions
should the Port decide not to modify the structure consistent
with the public trust. Accordingly, the author has agreed to
the following amendment:
SEC. 7. Sections 3, 4, and 6 of this act shall be inoperative
on January 1, 2094, after which date the use of the designated
seawall lots shall be consistent with the public trust, the
Burton Act trust, and the Burton Act transfer agreement. No
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later than January 1, 2094, all structures , buildings, and
appurtenances on the designated seawall lots not useful for
consistent with the purposes of the public trust, the Burton
Act trust, and Burton Act transfer agreement shall be removed
or modified , including any necessary restoration or
remediation of the seawall lots, to facilitate public trust
uses.
6)Prior legislation . Chapter 310, Statutes of 1987 lifted
public trust use restrictions on three parcels of filled
tidelands in the City. This legislation allowed the
construction of residential development on the three parcels
(seawall lots 331, 332 and 333), pursuant to the Rincon
Point-South Beach Redevelopment Project. Revenues generated
from the parcels must be dedicated to the furtherance of
tidelands trust purposes.
Chapter 728, Statutes of 1994 allowed the City of Newort Beach
to continue to lease for residential purposes certain filled
tidelands. In the mid-1960's, the lessor constructed an
apartment complex inconsistent with the public trust. A
portion of the lease proceeds is deposited into to the City's
tideland trust fund.
Chapter 1555, Statutes of 1971 retroactively lifted the trust
use restrictions from four parcels in the City of Redondo
Beach after they were developed for residential purposes
inconsistent with the public trust. The legislation required
lease revenues to be used for trust purposes.
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7)Technical amendments
a) Page 14, line 22 should read:
(1) Prior to issuing executing the 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
b) Page 15, lines 35-39, and page 16, lines 1-2 should
read:
(b) Seawall lot ____ shall remain subject to the use
requirements of the public trust, the Burton Act trust, and the
Burton Act transfer agreement until the port has identified
transportation facilities or services that will address any
unmet transportation needs of visitors to the Ferry Building and
Pier 1 attributable to the loss of visitor parking, if the use
or lease of the property will eliminate any existing visitor
parking.
c) Page 16, line 32 should read:
(b) The city may, pursuant to Section 3 of Article X of the
California Constitution, lease, sell, or otherwise transfer all
or any portion of the paper streets, or any interest therein, to
any private
person free of the public trust, the Burton Act trust, and any
additional restrictions on use or alienability created by the
Burton Act transfer agreement.
d) All references to seawall lot 321-1 should be changed to
322-1 .
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
Bay Area Council
Barbary Coast Neighborhood Association
California Labor Federation
California State Lands Commission
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City and County of San Francisco
San Francisco Bicycle Coalition
San Francisco Building and Construction Trades Council
San Francisco Housing Action Coalition
San Francisco Little League
San Francisco Planning and Urban Research Association
Telegraph Hill Dwellers
Treasure Island Development Authority
Treasure Island Homeless Development Initiative
United Brotherhood of Carpenters and Joiners of America, Local
22
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Opposition
None on file
Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092