By Geoff Page
What follows is a more detailed accounting of the Mission Bay Park Committee meeting on August 5. As recounted here in The Rag on August 6, the committee sent the city a clear message by voting 7-2-1 against the city’s proposal to declare Mission Bay park land surplus land.
The city’s position and the opposition’s position at the meeting are detailed in the following paragraphs.
City’s Position
Andy Field, Director of the Parks and Recreation Department, presented the city’s surplus land proposal. His first references were to the City Charter to explain how Mission Bay lease revenues are shared. Field referenced Article V, Executive and Administrative Service, Section 55: Parks and Recreation, SubSection 55.2: Mission Bay Park and Regional Parks Improvement Funds.
Section 55.2: Mission Bay Park and Regional Parks Improvement Funds
(b) Subject to the City of San Diego’s State law obligations as a trustee of tidelands within Mission Bay Park, Mission Bay Park Lease Revenues up to the threshold amount in each fiscal year shall be deposited into the San Diego General Fund and may be used for any municipal purpose, including but not limited to, police, fire, streets, sewers, water delivery, roads, bridges, and operation of parks. All Mission Bay Park Lease Revenues in excess of the threshold amount shall be allocated in the City of San Diego budget to two distinct funds. Thirty-five percent (35%) of the Mission Bay Park Lease Revenues in excess of the threshold amount, or three million five hundred thousand dollars ($3,500,000) whichever is greater, shall be allocated to the San Diego Regional Parks Improvement Fund that solely benefits the San Diego Regional Parks and sixty-five percent (65%) of the Mission Bay Park Lease Revenues over the threshold amount, or the remainder of those revenues if less than 65% is available after the allocation to the San Diego Regional Parks Improvement Fund, shall be allocated to the Mission Bay Park Improvement Fund that solely benefits the Mission Bay Park Improvement Zone. The threshold amount shall be $23 million beginning fiscal year 2010 and ending fiscal year 2014. The threshold amount shall be $20 million beginning fiscal year 2015 and shall remain $20 million thereafter.
In a nutshell, the section says the first $20 million in lease revenues goes to the General Fund. What remains is divided among the Regional Parks Improvement Fund and the Mission Bay Park Improvement Fund. That means that only 65% of what is left from Mission Bay Park leases – after the General Fund takes its $20 million – actually goes back to Mission Bay Park.
Section 55.2 stated the threshold “shall remain $20 million thereafter” from 2015.
Two takeaways. First, the city budget is dependent on getting that $20 million. Second, the “threshold” of $20 million was set in 2015, 10 years ago. The city is desperate for money so it is looking for ways to increase lease revenues. But, how does that help the city if its cut is always $20 million? Unless there is a plan to increase the city’s take.
Field also referenced subsection 55.1 of Section 55. The purpose of citing that section was to show that the City Charter had language establishing that some of Mission Bay Park could be leased.
Section 55: Parks and Recreation
Section 55.1: Mission Bay Park – Restrictions upon Commercial Development
Notwithstanding any other provision of this Charter to the contrary, the total land and water area of all leases in Mission Bay Park shall not exceed twenty-five percent (25%) of the total dedicated land area or six and one-half percent (6.5%) of the total dedicated water area respectively of the park without such lease being authorized or later ratified by vote of 2/3’s of the qualified electors of the City voting at an election for such purpose.
Field also referred to Council Policy 700-08, “Mission Bay Park Policies,” dated October 16, 2000.
10-16-2000 Council Policy 700-08
7. It is the policy of the City Council that every effort shall be made to provide sufficient revenue from leases to cover the City’s operating expenses for Mission Bay Park.
By this time, it was apparent that the impetus for the city’s actions is all money. The mayor is looking everywhere for more money and his developer friends have his ear about the Mission Bay properties.
Field also talked about the Mission Bay Master Plan update in 2021. The plan has a long section on commercial leases. In that section was an interesting piece of information. Of the 25 percent of land available for leases, 21.4 percent was already taken as of 2021. Based on certain actions, that percentage would increase to 23.5 percent.
With practically no land left for new leases, what is a city to do? The same as landlords are doing all over the city, kick out the old tenants and get all new ones for more money.
The crux of the city’s argument was that their hands are tied, they have to go through the surplus lands process because of state law. But, the claim was disingenuous. The state law says the land must be declared surplus only if a city is pursuing leases longer than 15 years.
As an audience member easily pointed out, execute leases for less than 15 years. The city claims it has to offer longer leases so the new tenants can eventually recover the costs of the improvements they make. Of course. Anyone building a high-rise hotel on one of these sites would need a long time to recover those costs. So, that triggers the Surplus Land Act requirements.
The city is making it out that it is trapped, beholden to State law. But, that is only because what city hall desires triggers the State law. It is a circular argument.
The Opposition
There were several positions from the opposition. As previously discussed, one suggestion was to keep the leases under 15 years. Another argument, conceding for discussion’s sake that the lands could be declared surplus, was to have the city ask the State to either amend the Surplus Land Act or obtain an exemption for Mission Bay Park.
City Council President Joe LaCava spoke about getting an exemption or an amendment. He believed there was zero chance to get either. LaCava brought up the 90-day “good faith negotiation period” in the Surplus Land Act:
54223. (a) After the disposing agency has received a notice of interest from the entity desiring to purchase or lease the surplus land on terms that comply with this article, the disposing agency and the entity shall enter into good faith negotiations to determine a mutually satisfactory sales price and terms or lease terms. If the price or terms cannot be agreed upon after a good faith negotiation period of not less than 90 days, the local agency may dispose of the surplus land without further regard to this article, except that Section 54233 shall apply.
LaCava did not believe anyone would come up with a viable housing proposal within the 90 days and, once the time ran out, the act, very tellingly states “the local agency may dispose of the surplus land without further regard to this article,…”
LaCava’s position was to roll the dice, wait out the 90 days, and then the issue of surplus lands will not be a problem.
While not ordinarily a conspiracy minded person, this appeared to this writer like a set up. All the city needs is a volunteer developer to provide some kind of proposal, argue about it for 90 days, then declare good faith negotiations failed to produce an agreement on terms or price or both. The Surplus Land Act would no longer apply and long, attractive leases would then be possible.
LaCava referred to this as the “off ramp” saying that the sooner the city notices the surplus land designation, the sooner the 90-day clock starts. This was the reason for his lone “No” vote when the council postponed the issue from July to September.
The strategy LaCava described may or may not be successful, there is no certainty to it. Obtaining a documented exemption or amendment to the Surplus Land Act clears up any uncertainty. Those processes will take a long time, probably a few years, if at all successful. LaCava is selling an off-ramp as a way to speed things up.
One of the more forceful speakers in opposition was attorney Robert Ottilie. He emphasized that lease revenue in the park should be used in the park. He cited Measure C. passed in 2008, that stated:
Proposition C amended the San Diego City Charter to require that annual lease revenue generated in Mission Bay Park exceeding $23 million initially and decreasing to $20 million after 5 years be appropriated 75% for capital improvements in Mission Bay Park and 25% for capital improvements in Chollas Lake, Balboa, Mission Trails, Otay River Valley, Presidio and San Diego River Parks; open space parks; coastal beaches and contiguous coastal parks; and future regional parks.
Actually, all this measure seemed to do was to increase the revenue percentage spent in Mission Bay Park from 65 percent, in the City Charter, to 75 percent.
There was a lot of discussion about housing on the sites in question. The purpose of the Surplus Land Act is to make locally owned public land, no longer needed for government purposes, available for building affordable homes. No one attending the meeting believed placing affordable housing on Mission Bay made any sense.
The city staff report to city council contains eight paragraphs, or 434 words, discussing affordable housing.
The city is sending mixed signals on the matter of housing. According to the Mission Bay Park Master Plan, under the heading, “Provisions for Low-Income and Moderate Income Housing:
Provisions for private housing are inconsistent with the public use of Mission Bay Park and are therefore, not proposed in the Master Plan.
It really does not get much clearer than that.
The city’s own Parks and Recreation website states:
Approximately one half of the park was once state tidelands. Mission Bay Park was transferred to the City of San Diego with several restrictions, some of which were adopted by the Citizens of San Diego for adoption into San Diego City Charter with others implemented as part of the California Coastal Commission’s oversight of local planning and land use decisions. Among the limitations are:
- a ban on permanent residential development or any private ownership of land within the tidelands, and
The Surplus Land Act also speaks to park land:
(b) Notwithstanding subdivision (a), first priority shall be given to an entity that agrees to use the site for park or recreational purposes if the land being offered is already being used and will continue to be used for park or recreational purposes, or if the land is designated for park and recreational use in the local general plan and will be developed for that purpose.
So, why is the issue of Surplus Land an issue at all?
Attorney Cory Briggs pointed out that the city charter requires a public vote of two-thirds of the electorate to declare park land as surplus. That success seems unlikely.
But, as often happens with the city, the affordable housing issue is really just a smokescreen. It was revealed recently that the city received an “unsolicited” proposal for a hotel development on one of the sites. The claim that it was out of the blue, unsolicited, does not pass the smell test.
One can only imagine the stars in the mayor’s eyes when a developer showed him the money that could be made on Mission Bay. But, unfortunately for the mayor, a developer with those plans would need a much longer lease agreement to make the deal feasible.
It was pointed out by several people that the Mission Bay Master Plan allows for two more hotels in the park. It appears that the housing issue is dead on arrival, but a hotel might be possible.
It appeared that the opposition had the law on its side. It was made clear several times that lawsuits will result if the mayor continues with its surplus land proposal. The next move is the city’s.
Details of the meeting are online at
https://www.sandiego.gov/park-and-recreation/general-info/boards/mbpc
Mike and other readers; those “details” are nothing but the agenda for the meeting and the City’s power point presentation. No minutes are provided. Pretty much all one-sided and hardly details.
No details. Link is the same rudimentary, nonsensical, deceitful, dishonest, and duplicitous slides from the Mayor’s farcical presentation to the Mission Bay Committee.
The only thing the PowerPoint presentation provides that is worth a look are maps clearly showing the properties in Mission Bay.
As we wrote about this, all the talk about Surplus Lands is only because the city is triggering the law. The only reason for this is that the city wants to have much longer than 15-year leases for much more high end development.
Thanks for taking the time to tease all this information out and to give a much better idea of the scope of the city’s manipulation of the Surplus Land Act. They have become very good at imposing SLA restraints and getting exemptions from the SLA for properties where it benefits developers.
Geoff – thank you for your excellent explanation and commentary about the recent meeting of the Mission Bay Park Committee.
However, I have one correction to offer. You wrote “Actually, all this measure seemed to do was to increase the revenue percentage spent in Mission Bay Park from 65 percent, in the City Charter, to 75 percent.” It was actually the opposite. Prior to Proposition C (2008), all revenue from Mission Bay Park went directly into the General Fund. The city budgeted insufficient amounts from the General Fund for Mission Bay Park upkeep and maintenance.
In 2008, Bob Ottilie and Kevin Faulconer succeeded in placing Proposition C on the city ballot. The measure required that 75% of revenue from Mission Bay Park above $20 million be returned to the Park, deposited in the Mission Bay Improvement Fund (MBIF), and that 25% be deposited in the Regional Parks Improvement Fund (RPIF) to be shared among the other San Diego regional parks. Proposition C placed Section 55.2 in the City Charter.
In 2016, voters approved a modification of Section 55.2 (Proposition J), changing the distribution of revenue above $20 million be changed to 65% to MBIF and 35% to RPIF. This cannot be changed without another citywide vote to modify Section 55.2.
I’d like to add a comment about Section 55.1 which limits commercial development in Mission Bay Park to a maximum of 25% land area and 6.5% of water area. This was added to the City Charter by a citizens’ measure in 1987 because of concern that the city would lease increasing amounts of parkland for commercial uses thus reducing “free and open parkland” for public use.
I went back to see when the city charter was amended and I saw that the 2008 version did say 75% and the newer 2016 version said 65%. So, I’m guessing there was no specific way to distribute the lease earnings before 2008? Seems you know the history well. I tried to find a city charter before 2008 to see what section 55 said but had no luck. Perhaps you know, Judy?
This is a fantastic and clear article. Thank you for publishing it! Once again we, the public have to closely scrutinize our government, as the motivation for greed is very pervasive in this town, particularly under the guise of “affordable housing.“ (which is kind of a ridiculous discussion to be having anyway within a half a mile of the beaches of San Diego, if you ask me…)
Geoff – for some reason your followup question to me isn’t showing up here. But, I can answer bcz I can see it in the notification email!
You’re correct. Prior to 2008, there was nothing in the City Charter specifying where revenue from Mission Bay Park would be directed; the city simply put all in the General Fund, as I wrote, and returned a pittance to Mission Bay Park in the annual budgeting process.
Section 55.2 was a completely new addition to the Charter, designed to ensure that at least some revenue from commercial leases in MBP return to Mission Bay Park.
Section 55.2 lays out a clear list of project priorities that funding from the Mission Bay Improvement Fund can be used for; none can be used for basic operations and maintenance, purely for improvements.
From Article V (c): “Funds in the Mission Bay Park Improvement Fund may be expended only in the Mission Bay Park Improvement Zone, to restore wetlands, wildlife habitat, and other environmental assets within the Mission Bay Park Improvement Zone; to preserve the beneficial uses of the Mission Bay Park Improvement Zone including, but not limited to, water quality, boating, swimming, fishing, and picnicking by maintaining navigable waters and eliminating navigational hazards; to restore embankments and other erosion control features; and to improve the conditions of the Mission Bay Park Improvement Zone for the benefit and enjoyment of residents and visitors, consistent with the Mission Bay Park Master Plan.”
Initially, the list was pretty strict but Prop. J (2016) has enabled funds to be used for a variety of park improvement projects (parking lot repaving, new or replacement of restroom facilities, improvements or new playgrounds) while awaiting finalization of plans for the second priority on the list instead of having the incoming revenue accrue indefinitely, unavailable to lower priority projects in the list, while we awaited completion and permitting for the next projects in the list.
You’ll need to go to the City Charter Section 55.2 to see the full list of adopted priorities and statement of the constraints on use of the MBIF. Priority Project (A) has been completed; (B) awaits finalization of plans for De Anza Natural.
Judy, thanks for adding all that history and background to the story. When you speak up, we all listen.
It is a classic study in politics and maneuvering the public. Voters set the percentages at 75 and 25 and only eight short years later were somehow convinced that they needed to set new percentages. I honestly did not pay attention to either vote that I recall. I have to wonder what the selling point was for such an esoteric adjustment in percentages.
And, I’ve had similar problems finding comments, listed in the right column, when I hit the story link. Took me a while to get to yours.
As I recall, one reason to readjust was because revenue had increased substantially post-2008, especially once the minimum dropped from $23 million to $20 million going to the General Fund. Another reason was to loosen the requirement to achieve, sequentially, the initial list of priorities. The increasing revenue was just sitting in the account doing nothing other than drawing interest, while there were needed public recreation capital improvements.
Once a project and funding for De Anza Natural has been approved, lower list priorities will be put on hold until the water quality and wetlands restoration elements of the De Anza project is fully funded. This would include money from MBIF plus grants that will be applied for to enable environmental review, etc. Clearly, a long and complex process which is why Prop. J so the park and visitors to the park can benefit today instead of 10 years from now.
As you might guess, I supported Prop. J in 2016.
There were two main selling points. A primary reason was to modify the strict funding priorities because revenue increased more than expected post-2008 and particularly once the General Fund share dropped to $20 million. Another reason was, again, revenue grew faster than expected and the regional parks 25% share didn’t go very far (plus also gained council support from districts including other regional parks).
Once the highest priority had been funded and completed (dredge navigable channels in NE sector of bay), the subsequent priority wouldn’t be ready for approval for many years so the money would simply sit only earning interest even though there are valuable but smaller recreational projects (i.e. not water quality and wetlands) would languish for many years. The smaller projects will go on hold when, for instance, the water quality and wetlands elements of the the De Anza Natural project have been approved.
Thanks again, Judy, the history is important and, in some cases, the people who made it happen need to get some recognition like this as well.
Excellent article Geoff! And thanks for the historical perspective Judy. I had been following this issue since it came up and I now feel like I have the best understanding of available. Love the Rag!