OLA#: 001-03

LEGISLATIVE ANALYST REPORT

TO: Honorable Members of the Board of Supervisors

FROM: Jennifer Stanley, Office of the Legislative Analyst

DATE: February 21, 2003

SUBJECT: Cruise Ship Terminal at Piers 30 and 32

SUMMARY OF REQUESTED ACTION

A motion introduced by Supervisor Chris Daly requests the Office of Legislative Analyst (OLA) to examine the regulatory process for approval of the proposed James R. Herman Cruise Ship Terminal at Piers 30 and 32, provide analysis of state legislation that has been approved and may be proposed regarding this site, describe efforts in other communities to plan for cruise ship terminals and to provide guidance to City staff in advance of regulatory approvals at the San Franciso Board of Supervisors. The OLA should provide an initial report no later than February 13, 2003 and continue working until all relevant state and local legislation is adopted.

EXECUTIVE SUMMARY

This first report on the Cruise Ship Terminal at Piers 30 and 32 addresses state legislation, AB 1389 authored by Assembly Member Kevin Shelley and was signed by the Governor on October 3, 2001. AB 1389 took effect on January 1, 2002. This report will also review AB 605 (Yee) sponsored by the Port of San Francisco to make technical changes to AB 1389.

BACKGROUND

The San Francisco Port has solicited proposals and has chosen a developer, through a competitive bid process, for development of the James R. Herman Cruise Ship Terminal on Piers 30-32. The 13 - acre project will include 300,000 square feet of office space and 200,000 square feet of retail shops, 7 - acres of open space, as well as, a proposed $15 million adjacent park on the waterfront (Brannan Street Wharf). The project also involves the removal of some 175,000 square feet of dilapidated piers.

This mixed-use project is estimated to create over 4,000 new jobs in the Bay Area (1,000 construction jobs at its peak and 3,000 permanent jobs) in the varied areas of the project (cruise, industry, retail, restaurants, office, etc.).¹

ANALYSIS OF LEGISLATION

Current Law and Practice

Existing State law grants certain lands on the San Francisco Waterfront to the City and County of San Francisco in trust for purposes of commerce, navigation, and fisheries. Existing State law establishes the San Francisco Bay Conservation and Development Commission and requires it to regulate fill and development within a specified area of San Francisco Bay.

AB 1389 (Chapter 489) authorizes the San Francisco Port Commission to approve a cruise ship terminal, other maritime facilities, and retail and office space at Piers 30-32 provided the following conditions are met:

A. The development includes a modern two-berth cruise ship terminal and a public access component.

B. Prior to submitting a major permit application to the San Francisco Bay Conservation and Development Commission (BCDC) for the project, the Port Commission, after review by BCDC, approves the final design concept for the Brannan Street Wharf development.

C. Prior to the issuance of a BCDC permit for the cruise ship development project, the Port must demonstrate to the satisfaction of BCDC, and the State Attorney General's Office, that it has encumbered all funds necessary for completion of the Brannan Street Wharf and has placed the funds in a segregated account. Also, requires the Port and BCDC to enter into an agreement that provides for the Port to fund, design, and construct the Brannan Street Wharf consistent with a specified timetable.

D. The amount of office space in the development does not exceed 300,000 leasable square feet - all of which must be above ground level - and designed to include public spaces and public access. Also, permits an additional 25,000 square feet of general office space, under specified circumstances.

E. The development includes a marketing program to maximize office space occupied by trust-related tenants over the life of the development.

F. The cruise ship terminal project, as approved by BCDC, complies with the "trust retail" and "nontrust retail" leasable space requirements as set forth in AB 1389.

AB 1389 stipulates that notwithstanding the San Francisco Bay Plan and the San Francisco Waterfront Special Area Plan for findings of consistency with the public trust doctrine and the Burton Act, the BCDC is authorized to approve the cruise ship terminal development project. Also, provides that nothing in this act is intended to limit the discretion of BCDC to approve or deny permits for the project or enforce permits issued for the project.

AB 1389 authorizes the State Lands Commission (SLC) to convey to the City and County of San Francisco all of the rights, title, and interest held by the State in a small parcel of filled lands along the San Francisco waterfront that consists of a street, free from the public trust for commerce, navigation and fisheries.

However, the SLC is required to hold a public hearing and make certain findings prior to authorizing the sale.

Finally, AB 1389 stipulates that sales made by San Francisco pursuant to this act are of statewide importance, thus, any ordinance, charter provision, or other provision of local law inconsistent with this act is not applicable to those sales.²

Proposed 2003 Legislation

On January 14, 2003 the Port Commission adopted Resolution #03-01 endorsing technical corrections to

AB 1389. State Assembly Member Yee introduced AB 605 on February 19,2003 that will make the changes requested by the Port (see attachment AB 605).

As the changes are non-substantive the Legislative Analyst believes that an analysis of them is of little value.

NEXT STEPS

· The OLA will continue to monitor the AB 605 for any future amendments that may be introduced to it throughout the legislative process.

· The Planning Department has not assigned the Cruise Ship Terminal project to an individual planner (the Environmental Unit has completed the EIR) as of February 12, 2003. However, the EIR was completed and approved by the Board of Supervisors on January 21, 2003. The OLA will continue to seek information from the Planning Department and others regarding the regulatory process for approvals.

· The OLA will seek further information on the efforts in other communities to plan for cruise ship terminals.

BILL NUMBER: AB 605 INTRODUCED

INTRODUCED BY Assembly Member Yee

FEBRUARY 19, 2003

An act to amend Sections 1, 5, and 7 of Chapter 489 of the

Statutes of 2001, relating to lands granted in trust to the City and

County of San Francisco.

AB 605, as introduced, Yee. San Francisco waterfront: cruise

ship terminal development.

Existing law declares specified areas along the San Francisco

waterfront to be free from the public trust for commerce, navigation,

and fisheries, as provided, and authorizes the San Francisco Port

Commission to approve a cruise ship terminal development, other

maritime facilities, and commercial and office space on a specified

area of the San Francisco waterfront. Existing law authorizes the

State Lands Commission to convey to the City and County of San

Francisco all of the rights, title, and interest held by the state in

trust to specified lands along the waterfront, but prescribes terms

and conditions for the use of those lands in connection with the

cruise ship terminal development, including a requirement that the

trust retail leasable space must be equal to or greater than the

nontrust retail leasable space. Existing law defines "nontrust

retail" as other retail, indoor public assembly, and theatre uses.

This bill would change the definition of "nontrust retail" to mean

other retail and theatre uses. The bill would also make other

technical, nonsubstantive changes to the above described law.

Vote: majority. Appropriation: no. Fiscal committee: no.

State-mandated local program: no.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 1 of Chapter 489 of the Statutes of 2001 is

amended to read:

Sec. 1. For purposes of this chapter, the following terms have the

following meanings:

(a) "BCDC" means the San Francisco Bay Conservation and

Development Commission established pursuant to Section 66620 of the

Government Code.

(b) "Bay jurisdiction" means the jurisdiction, powers, and duties

of BCDC pursuant to Title 7.2 (commencing with Section 66600) of the

Government Code within the area defined in subdivision (a) of Section

66610 of the Government Code.

(c) "Bay Plan" means the San Francisco Bay Plan as adopted and

administered by BCDC pursuant to Title 7.2 (commencing with Section

66600) of the Government Code, including all amendments thereto.

(d) "Boundary of the Port of San Francisco" means that line

defining the boundary of "Parcel A" in the description of the lands

transferred in trust to the City and County of San Francisco pursuant

to Chapter 1333 of the Statutes of 1968, recorded on May 14, 1976,

in Book C169, pages 573 to 664, inclusive, in the City and County of

San Francisco Recorder's Office.

(e) "Brannan Street Wharf" means a major San Francisco waterfront

park in the area of Piers 34 and 36, as identified in the Special

Area Plan.

(f) "Burton Act" means Chapter 1333 of the Statutes of 1968, as

amended.

(g) "Burton Act trust" means the statutory trust imposed by the

Burton Act (Chapter 1333 of the Statutes of 1968, as amended),

pursuant to which the state conveyed to the City and County of San

Francisco, in trust, by transfer agreement, and subject to certain

terms, conditions, and reservations, the state's interest in certain

tide and submerged lands.

(h) "City" means the City and County of San Francisco.

(i) "McAteer-Petris Act" means Title 7.2 (commencing with Section

66000) of the Government Code.

(j) "Public trust" or "trust" means the public trust for commerce,

or navigation , and fisheries.

(k) "Port" means the City and County of San Francisco acting by

and through the San Francisco Port Commission.

(l) "San Francisco Bay" means those areas defined in Section 66610

of the Government Code.

(m) "San Francisco waterfront" means those portions of the area

transferred to the port pursuant to the Burton Act that also lie

within the area defined in subdivisions (a) and (b) of Section 66610

of the Government Code.

(n) "Seawall Lot 330" means that parcel of property located in San

Francisco identified on that certain map entitled SUR 790, and shown

on Page 318 of the City and County of San Francisco 100 Scale

Ownership Maps, which is on file with the city's Bureau of Street Use

and Mapping.

(o) "Shoreline band jurisdiction" means the jurisdiction, powers,

and duties of BCDC pursuant to Title 7.2 (commencing with Section

66600) of the Government Code to regulate uses within the area

defined in subdivision (b) of Section 66610 of the Government Code to

ensure, in part, maximum feasible public access, as prescribed in

Section 66632.4 of the Government Code.

(p) "Special Area Plan" means the San Francisco Waterfront Special

Area Plan, dated July 20, 2000, adopted by BCDC, as amended from

time to time.

(q) "Street" means those lands located within the South

Beach/China Basin Planning area of the San Francisco waterfront at

Seawall Lot 330, and also lying within Parcel A of those lands

transferred to the City and County of San Francisco pursuant to the

Burton Act, as recorded May 14, 1969, in Book C 169 at Pages 573 to

664, inclusive, in the San Francisco Recorder's office, as more

particularly described as that portion of Main Street, located

between Bryant Street and the Embarcadero, vacated per Ordinance

14-93 on January 11, 1993, on file with the San Francisco Bureau of

Street Use and Mapping, in Book 10, Page 94. All streets and street

lines described in the preceding sentence are in accordance with that

certain map entitled SUR 790, and shown on Page 318 of the City and

County of San Francisco 100 Scale Ownership Maps, on file with the

City's Bureau of Street Use and Mapping.

(r) "Waterfront Land Use Plan" means the Waterfront Land Use Plan,

including the Waterfront Design and Access Element, adopted by the

port pursuant to Resolution No. 97-50, as amended from time to time.

SEC. 2. Section 5 of Chapter 489 of the Statutes of 2001 is

amended to read:

Sec. 5. The Legislature, in the exercise of its retained power as

trustee of the public trust, and in view of the unique circumstances

existing at Pier 30-32 on the San Francisco waterfront and the

considerable statewide public benefit and promotion of maritime

transportation that will be brought about by the construction of a

new passenger cruise ship terminal, improvements to berthing

facilities for waterborne transit, a lagoon, improved public access

and commercial public trust uses on this site, hereby authorizes the

Port to approve a cruise ship terminal development on the San

Francisco waterfront at Pier 30-32, which would include general

office use and general retail use, if all of the following conditions

are met:

(a) The development includes a modern two-berth cruise ship

terminal.

(b) The development includes a public access component that meets

the requirements of the Special Area Plan and the San Francisco Bay

Plan as interpreted by BCDC and that also offers expanded bay views

and public access.

(c) Prior to submitting a major permit application to BCDC for the

cruise ship terminal development, the Port, after review by or on

behalf of BCDC, approves the final design concept for the Brannan

Street Wharf.

(d) Prior to the issuance of a BCDC permit for the cruise ship

terminal development, the Port demonstrates, to the satisfaction of

BCDC and the Attorney General's office, that it has irrevocably

encumbered all of the funds deemed necessary for the completion of

the Brannan Street Wharf and has placed the funds in a segregated

account guaranteed to be available to be drawn upon for the

construction of the Brannan Street Wharf, and the Port and BCDC enter

into an enforceable agreement that provides for the Port to fund,

directly or through grant funding, or both, design, and construct the

Brannan Street Wharf consistent with the following timetable:

(1) The Port shall complete preliminary engineering drawings for

the Brannan Street Wharf and prepare and submit to BCDC a financing

plan approved by the Port indicating funding sources and estimated

construction costs at the time the construction of the cruise ship

terminal development commences.

(2) The Port shall complete Phase 1, the northern portion of the

Brannan Street Wharf (in the area of Pier 34), as described in the

Special Area Plan contemporaneously with the construction of the

cruise terminal development.

(3) The Port shall remove Pier 36 and complete the Brannan Street

Wharf no later than five years after commencement of construction of

the cruise ship terminal development.

(e) The amount of office space in the development does not exceed

300,000 leasable square feet, all of which shall be above the ground

level. This office space shall also be designed to contribute to a

development design that includes public spaces and promotes visual

and public access. An additional 25,000 leasable square feet of

space in the cruise ship terminal building may be used for general

office use until the earlier of either of the following:

(1) Fourteen years from the first date of occupancy.

(2) When home berthing ships above 5,000 passenger berth capacity

call for 15 days per year for two consecutive years.

(f) The development includes a marketing program designed to

maximize the amount of general office space occupied by trust-related

tenants over the life of the development.

(g) The cruise ship terminal as

development, if approved by BCDC , complies with the

requirements set forth in this subdivision. For purposes of this

subdivision only, "trust retail" means visitor serving public trust

retail and restaurant use. "Nontrust retail" means other retail

, indoor public assembly, and theatre uses. The

amount of trust retail leasable space shall be equal to or greater

than the nontrust retail leasable space. The amount of trust

and retail leasable space, nontrust retail

leasable space, and visitor serving trust use converted from trust or

nontrust retail approved by BCDC , as approved by

BCDC, shall be at least 40 percent of the total amount of office

leasable space.

SEC. 3. Section 7 of Chapter 489 of the Statutes of 2001 is

amended to read:

Sec. 7. Notwithstanding the Special Area Plan and the Bay Plan

requirement for findings of consistency with the public trust

doctrine and the Burton Act trust , BCDC is authorized to

approve the cruise ship terminal development trust

as provided in this act. Except as provided in Section 14 of this

act, nothing in this act is intended to limit the discretion of BCDC

to approve or deny permits for the projects described in this act in

a manner consistent with the McAteer-Petris Act, the Bay Plan, the

Special Area Plan, and this act, or to limit the discretion of BCDC

to enforce permits issued for the projects described in this act.

1 Source: AB 1389 Senate Floor Analysis, 9/14/01.

2 Source: AB 1389 Senate Floor Analyses, 9/14/01.