State Lands Commission and City Reach Settlement in Waterfront Height Limits Case

A few weeks back, RJR’s Melinda Sarjapur wrote about the pending decision in the lawsuit between the State Lands Commission and the City of San Francisco over Prop. B, which requires voter approval for any waterfront project that would exceed the applicable height limit. You can read her update here.

Since then, State Lands and the City have reached a settlement. The State Lands Commission approved the settlement agreement in closed session on February 27 and published a draft of the agreement, which has yet to be formally approved by the Port Commission or the Board of Supervisors.

Under the agreement, the State Lands Commission will allow Prop. B to stand—mandating that developers win voter approval in order to exceed waterfront height limits. In exchange, the City must ensure that waterfront projects comply with the public trust doctrine.

By way of background, the common law public trust stems from ancient Roman doctrine that was adopted by the United States in its early years as a nation. The foundational premise of the doctrine is that navigable waterways and their shorelines are held in trust by a state for the people of that state. Historically, the people’s basic right to the shoreline and waterways was limited to the use of waterways for commerce, navigation, and fisheries, but it has expanded to include recreation and the preservation of lands in their natural state.

In San Francisco, trust lands from the Hyde Street Pier in the north to India Basin in the south were transferred from the State to the City in 1968 through the Burton Act, and are now held in trust by the Port Commission. Together with the Port, the Bay Conservation and Development Commission (BCDC) and the State Lands Commission ensure that use of and development upon these lands is consistent with the public trust doctrine. Practically, the public trust serves to ensure that the public is not excluded from its waterfront—meaning that any new development along the water must facilitate waterfront commerce, navigation, and/or public enjoyment and recreation.

That said, the courts have found that the public trust is flexible enough to accommodate changing public needs, and ultimately “the use of public lands for non-traditional trust purposes that are ancillary or incidental to trust uses that directly promote, do not interfere with, and are necessary for a trust use to be feasible, are generally permitted (e.g., hotels, restaurants, parking lots, and restrooms).”[1] The State Legislature and the State Lands Commission have sometimes authorized the use of public trust lands for uses not traditionally considered trust uses, “if the project taken as a whole contains major elements that are found to be consistent with trust purposes.”[2]

All that said, the settlement agreement between State Lands and the City works to prevent the public trust doctrine from getting lost in the Prop. B ballot measure process. To that end, the agreement requires that before the Board of Supervisors or the Port Commission approve any development project or substantial land use or zoning change on or affecting trust lands, such approval must include findings that the approval is consistent with the public trust.

The agreement also requires the City to propose an ordinance amending the Elections Code to require that the ballot pamphlet for a measure to approve a waterfront project, or a land use or zoning change, include the following language: the measure “involves the San Francisco waterfront, which includes sovereign lands that the state of California has legislatively granted to the City. These waterfront lands and their resources are protected by the common law public trust doctrine and the City holds them in trust on behalf of all the People of California.”

That ordinance and the settlement agreement are pending introduction and approval by the Board of Supervisors, which we expect to occur in the coming weeks.


Authored by Reuben, Junius & Rose, LLP  Attorney, Chloe Angelis

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

[1] BCDC Staff Recommendation on AB 1273, pg. 2.

[2] Id.