The State Lands Commission agrees to drop its lawsuit against the city over the validity of Prop. B and will partner with the Port on key projects

SAN FRANCISCO (Feb. 21, 2018) — City Attorney Dennis Herrera announced today that he had reached a proposed settlement agreement with California State Lands Commission staff to end the state’s legal challenge to 2014’s voter-approved Proposition B, which gave San Francisco voters approval over height increases for new development on waterfront property managed by the Port of San Francisco.

Under the proposed settlement agreement, the State Lands Commission will drop its lawsuit challenging the validity of Prop. B and agree not to challenge the application of Prop. B to projects that voters already approved at Pier 70 and Mission Rock, removing a potential hurdle to their completion.

For its part, the City will ensure that future waterfront land-use decisions from City officials include written findings that the approved developments are consistent with the public trust and benefit the people of California. The City will also provide an informational notice in the ballot pamphlet for future measures affecting Port property indicating the measures involve public trust lands.

As part of the settlement, the State Lands Commission will partner with the Port to seek state funding for the Port’s efforts to upgrade San Francisco’s seawall to withstand earthquakes and the effects of climate change. Additionally, the State Lands Commission and Port will work together to facilitate the placement of affordable housing on trust lands where housing is permitted.

“This agreement protects the will of San Francisco voters,” City Attorney Dennis Herrera said. “It ends this lawsuit while ensuring that voters continue to have their voices heard when it comes to the use, access and enjoyment of San Francisco’s waterfront. The waterfront is part of who we are as a city. We will continue to be good stewards of that legacy as we shape our future. Together, we will ensure that San Francisco’s waterfront remains vibrant and welcoming to residents and visitors alike.”

“This is a win-win for our voters, the City and the State,” said Mayor Mark Farrell. “The San Francisco waterfront is an iconic feature of our City and an integral part of our history. With this agreement we can move forward with measures to support affordable housing, strengthen our seawall and carry out improvements that will continue to make the waterfront a world-class resource for all our residents and visitors.”

“It’s very positive that the City and the State Lands Commission have reached an agreement to settle the Proposition B lawsuit,” said Port Director Elaine Forbes. “San Francisco voters, the Port, the City and State Lands are all on the same side today, working to protect and enhance the San Francisco waterfront for the public now and into the future. I’m also grateful that State Lands has agreed to partner with the Port to advocate for State funding for the Seawall Earthquake Safety Program, which is of upmost importance for providing a safe waterfront.”

The settlement follows a bench trial last month before San Francisco Superior Court Judge Suzanne Bolanos. She has not yet issued a decision in the case.

To become final, the settlement must be approved by the San Francisco Port Commission, the San Francisco Board of Supervisors and the State Lands Commission, composed of Lt. Gov. Gavin Newsom, State Controller Betty Yee and Finance Director Michael Cohen.

In addition to dismissing the lawsuit, the State Lands Commission agrees to:

not challenge the validity of Prop B as applied to the Pier 70 and Mission Rock projects

not seek reimbursement for State Lands Commission staff time spent reviewing the Pier 70 and Mission Rock project documents

partner with the Port to seek funding for the Port’s Seawall Earthquake Safety Program

work with the Port to facilitate the placement of affordable housing on trust lands where legally authorized

The City agrees to:

acknowledge that it is subject to particular state laws concerning the public trust

in Board of Supervisors legislation or Port Commission resolutions that change land use or zoning on trust lands, or approve a project, include findings that the legislation or resolution is consistent with the public trust

consider a Board of Supervisors ordinance amending the Elections Code to require that voter initiatives that would change land use or zoning on trust lands, or approve a project, the ballot pamphlet will include a statement that the lands are held in trust for the People of California. So long as that Elections Code amendment is in place, the State will not bring another challenge to Prop. B.

San Francisco voters overwhelming approved Prop. B in the June 3, 2014 election by a margin of 59 percent to 41 percent. Prop. B requires voter approval of the height increase if a new waterfront development on Port property seek to build higher than the existing zoning allows.

The State Lands Commission sued the City in July 2014 to invalidate Prop. B, contending that the City’s Port Commission exercises sole land-use regulatory authority over Port property — and that voters, the Board of Supervisors and the Planning Commission are all powerless to make decisions about the height and size of new buildings on 7½ miles of waterfront property.

Herrera had argued that the State Lands Commission’s view defies California’s well-established constitutional right to initiative and ignores nearly five decades of land-use regulation involving Port property — ever since San Francisco voters themselves approved the transfer of state tidelands to local control in 1968 under the Burton Act.

“This settlement harmonizes the rights of San Francisco’s voters with the state’s interest in administering public trust lands for the benefit of all Californians,” Herrera said.

The case is: California State Lands Commission v. City and County of San Francisco, San Francisco Superior Court Case No. CGC-14-540531, July 15, 2014. Additional information on the San Francisco City Attorney’s Office is available at: https://www.sfcityattorney.org/.

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