(1)Existing law establishes the State Lands Commission in the Natural Resources Agency, and vests with the commission control over specified state lands, including coastal lands. Existing law requires the commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

Existing law, the Kapiloff Land Bank Act, creates the Land Bank Fund and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as the Land Bank Trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements. Existing law requires that moneys in the fund be available for expenditure by the trustee to purchase outstanding interests in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes. Existing law authorizes acquisitions by negotiated agreement with the owner of the outstanding interests and specifies that the act is not intended to confer any authority to exercise the power of eminent domain for its purposes.

This bill would create the Martins Beach Subaccount in the fund, and would require that moneys received from public and private sources, including nonprofit sources, to be used for the creation of that public access route be deposited into that subaccount and continuously appropriated to the commission for expenditure to acquire that right-of-way or easement, as prescribed, and be expended in accordance with a specified priority. The bill would also authorize the commission to transfer moneys from the fund to the subaccount, in an amount not to exceed $1,000,000, for expenditure for that public access route, and would permit the commission to acquire the right-of-way or easement necessary for the creation of that public access route, as prescribed. The bill would authorize the commission to deposit into the subaccount and expend specified moneys received from the County of San Mateo for purposes related to the creation of that public access route.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for Martins Beach.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law establishes the State Lands Commission in the Natural Resources Agency, and vests with the commission control over specified state lands, including coastal lands. Existing law requires the commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

Existing law, the Kapiloff Land Bank Act, creates the Land Bank Fund and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as the Land Bank Trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements. Existing law requires that moneys in the fund be available for expenditure by the trustee to purchase outstanding interests in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes. Existing law authorizes acquisitions by negotiated agreement with the owner of the outstanding interests and specifies that the act is not intended to confer any authority to exercise the power of eminent domain for its purposes.

This bill would create the Martins Beach Subaccount in the fund, and would require that moneys received from public, private, and public and private sources, including nonprofit sources sources, to be used for the creation of that public access route be deposited into that subaccount and continuously appropriated to the commission for expenditure to acquire that right-of-way or easement, as prescribed, and be expended in accordance with a specified priority. The bill would also authorize the commission to transfer moneys from the fund to the subaccount, in an amount not to exceed $1,000,000, for expenditure for that public access route, and would permit the commission to acquire the right-of-way or easement necessary for the creation of that public access route, as prescribed. The bill would authorize the commission to deposit into the subaccount and expend specified moneys received from the County of San Mateo for purposes related to the creation of that public access route.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for Martins Beach.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law establishes the State Lands Commission in the Natural Resources Agency, and vests with the commission control over specified state lands, including coastal lands. Existing law requires the commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

Existing law, the Kapiloff Land Bank Act, creates the Land Bank Fund and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as the Land Bank Trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements. Existing law requires that moneys in the fund be available for expenditure by the trustee to purchase outstanding interests in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes. Existing law authorizes acquisitions by negotiated agreement with the owner of the outstanding interests and specifies that the act is not intended to confer any authority to exercise the power of eminent domain for its purposes.

This bill would create the Martins Beach Subaccount in the fund, and would require that moneys received from public, private, and nonprofit sources to be used for the creation of that public access route be deposited into that subaccount and continuously appropriated to the commission for expenditure to acquire that right-of-way or easement, as prescribed, and be expended in accordance with a specified priority. The bill would also authorize the commission to transfer moneys from the fund to the subaccount, in an amount not to exceed $1,000,000, for expenditure for that public access route, and would permit the commission to exercise the power of eminent domain or enter into a negotiated agreement to acquire the right-of-way or easement necessary for the creation of that public access route. route, as prescribed. The bill would authorize the commission to deposit into the subaccount and expend specified moneys received from the County of San Mateo for purposes related to the creation of that public access route.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for Martins Beach.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law establishes the State Lands Commission in the Natural Resources Agency, and vests with the commission control over specified state lands, including coastal lands. Existing law requires the commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

Existing law, the Kapiloff Land Bank Act, creates the Land Bank Fund and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as the Land Bank Trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements. Existing law requires that moneys in the fund be available for expenditure by the trustee to purchase outstanding interests in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes. Existing law authorizes acquisitions by negotiated agreement with the owner of the outstanding interests and specifies that the act is not intended to confer any authority to exercise the power of eminent domain for its purposes.

This bill would create the Martins Beach Subaccount in the fund, and would require that moneys received from public, private, and nonprofit sources to be used for the creation of that public access route be deposited into that subaccount and continuously appropriated to the commission for expenditure to acquire that right-of-way or easement, as prescribed, and be expended in accordance with a specified priority. The bill would also authorize the commission to transfer moneys from the fund to the subaccount, in an amount not to exceed $1,000,000, for expenditure for that public access route, and would permit the commission to exercise the power of eminent domain or enter into a negotiated agreement to acquire the right-of-way or easement necessary for the creation of that public access route.

(2)This bill would appropriate the sum of $360,000 from the General Fund to the commission to be expended for the acquisition of that right-of-way or easement, and associated costs, and would require that any unexpended moneys not used for the acquisition revert to the General Fund.

(4)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law establishes the State Lands Commission in the Natural Resources Agency, and vests with the commission control over specified state lands, including coastal lands. Existing law requires the State Lands Commission commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

(2)This bill would appropriate an unspecified amount the sum of $360,000 from the General Fund to the commission to be expended for the acquisition of that right-of-way or easement, and any related administrative associated costs, and would require that any unexpended moneys not used for the acquisition revert to the General Fund.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law requires the State Lands Commission to consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property, as described, in the unincorporated area of the County of San Mateo, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. Existing law authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach, in accordance with specified procedures.

This bill would appropriate an unspecified amount from the General Fund to the commission to be expended for the acquisition of that right-of-way or easement, and any related administrative costs, and would require that any unexpended moneys not used for the acquisition revert to the General Fund.

(2)This bill would declare that it is to take effect immediately as an urgency statute.

 VETO  

Bill No: SB 42

Author:

:

Vote:

SENATE NATURAL RES. & WATER COMMITTEE: 7-1, 3/14/17

AYES: Hertzberg, Allen, Atkins, Hueso, Jackson, Monning, Stern

NOES: Vidak

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/25/17

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

SENATE FLOOR: 28-11, 5/31/17

AYES: Allen, Atkins, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Newman, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wiener

NOES: Anderson, Bates, Fuller, Gaines, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, Wilk

NO VOTE RECORDED: Berryhill

SENATE FLOOR: 28-12, 9/11/17

AYES: Allen, Atkins, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Newman, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wiener

NOES: Anderson, Bates, Berryhill, Fuller, Gaines, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, Wilk

ASSEMBLY FLOOR: 57-20, 9/7/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill creates the Martins Beach Subaccount (subaccount) in the Land Bank Fund (fund). Moneys deposited in the subaccount may be used by the State Lands Commission (commission) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. This bill also allows the commission to use up to $1 million from the fund or any moneys deposited by public or private sources to acquire a right-of-way or easement for the access route, as specified. Moneys placed in the subaccount from the fund to be used consistent with the act’s statutory section that bars an acquisition by eminent domain.

ANALYSIS: Existing law:

1. Establishes the commission with authority over California’s sovereign and certain other lands. The commission administers these lands pursuant to statute and the public trust doctrine, as applicable.
   1. The public trust doctrine is a common law doctrine that specifies the state’s authority as sovereign to exercise continuous supervision and control over the navigable waters of the state and tidelands, among other things. The doctrine includes the protection of maritime or water dependent commerce, navigation, and fisheries, and the preservation of the lands in their natural state. Incidental uses that directly promote trust uses or that lend themselves to the public’s enjoyment of trust lands, including the provision of public access to trust lands, are also permitted.
2. Creates, through the Kapiloff Land Bank Act (act), the Land Bank Fund (fund) and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements.
   1. Moneys in the fund are available for expenditure by the trustee to purchase outstanding interest in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes, including to provide public access.
   2. The act generally requires acquisitions to be by negotiated agreement, not by eminent domain, although existing law authorizes the commission to acquire a right-of-way or easement across private land in certain circumstances by purchase, lease, gift, exchange, or condemnation.
3. Requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property, as described, located in an unincorporated area of San Mateo County, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach.
   1. The commission is authorized, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

This bill:

1. Creates the Martins Beach Subaccount (subaccount) in the fund. Moneys deposited in the subaccount may be used by the commission to create a public access route to and along the shoreline of Martins Beach, as specified.
2. Allows the commission to use up to $1 million from the fund or any moneys deposited by San Mateo County or other public or private sources to acquire a right-of-way or easement for the access route. In particular, this bill:
   1. Authorizes the commission to use any moneys transferred from the fund to the subaccount after the other funds in the subaccount have been expended. Any General Fund moneys in the subaccount must be segregated and separately accounted for.
   2. Authorizes the expenditure of moneys in the subaccount for certain costs associated with the acquisition, such as environmental studies, as specified, and continuously appropriates moneys in the subaccount.
   3. Allows the moneys in the subaccount to be used for an acquisition through either a negotiated agreement or condemnation.
   4. Requires the commission to use moneys in the subaccount first to obtain public access to Martins Beach.
   5. Requires the use of moneys placed in the subaccount from the fund to be used consistent with the act’s statutory section that bars an acquisition by eminent domain.
3. Is an urgency measure to facilitate the transfer of moneys to the commission.
4. Justifies the need for a special statute.

Background

Martins Beach is located on the coast of San Mateo County approximately eight miles south of Half Moon Bay. Seventy-five foot cliffs are located on both the north and south ends of the beach. Access to the beach from the land is via a private road (Martins Beach Road) from Highway 1. There are dozens of cabins on long-term ground leases adjacent to the beach area.

Prior to July 2008, a single family had owned Martins Beach and the surrounding land for over 100 years. At various times the family allowed the public access to the beach and there were facilities available for use by the public, such as a general store and restrooms. These activities started before the passage of the Coastal Act (Public Resources Code (PRC) §§30000 et seq.).

In July 2008, two parcels totaling 89 acres from Highway 1 west to the coast and encompassing most of Martins Beach and all of Martins Beach Road were sold for $37.5 million (the Martins Beach property). The new owners of the two parcels are Martins Beach 1, LLC and Martins Beach 2, LLC. Vinod Khosla, the prominent venture capitalist, and his family are behind these two LLCs.

In fall 2009 or at some point thereafter, local management of the Martins Beach property closed and locked a gate on Martins Beach Road at Highway 1, and repainted a roadside sign indicating the beach, among other actions. According to the local management, the road and parking area were in disrepair and it was uneconomic to provide a parking attendant at the beach. Considerable controversy ensued and continues to today. Multiple efforts to obtain public access to the beach commenced and also continue to today. There are numerous news stories describing attempts by surfers and others to access the Martins Beach property as well as chronicling the efforts by stakeholders to obtain public access to Martin’s Beach again and by the owners to deny or limit it. These efforts include legislation, negotiation and litigation.

In October 2017 there were news reports that public access to Martins Beach would be allowed (the gate would be reopened) by the owners on a limited number of days. This announcement followed a September 14, 2017 “Notice of Intent to Commence Cease and Desist Order and Administrative Penalties Proceedings” to the owners from the Executive Director of the California Coastal Commission (coastal commission). (Information regarding the coastal commission’s involvement with public access to Martins Beach is provided below.) It remains unknown if the owner’s proposal to open the gates satisfies the conditions placed on their re-opening by court or other orders.

Legislative efforts to obtain Martins Beach access. SB 968 (Hill, Chapter 922, Statutes of 2014) requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. SB 968 also authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

Commission efforts to obtain Martins Beach access pursuant to SB 968. At the commission’s December 6, 2016 hearing, the executive officer of the commission reported that negotiations had broken down with the owners of the Martins Beach property. The commission’s negotiators had offered $360,000 for public access to Martins Beach. According to news reports, the owners asked for $30 million for public access. Additionally, the owners filed a federal suit against the commission and others in September 2016.

The commission directed staff at the same December hearing to “report back on specific process elements associated with condemnation, options, timeliness, resources needed, and implications relevant to the three pending lawsuits.” Staff noted at the hearing that the commission had not voted to authorize condemnation, there was no predetermination by the commission to condemn, and that a condemnation appraisal for access based upon the highest probable price would likely yield a different value than the $360,000 offered due to varying appraisal standard requirements. The commission has not previously used condemnation.

Martins Beach litigation. There are three active pending cases involving the Martins Beach property. First, in September 2016, Martins Beach 1 LLC and Martins Beach 2 LLC filed litigation in the U.S. District Court against the commission, the coastal commission, San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that PRC Section 6213.5 (SB 968) is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff’s equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A ruling on the coastal commission’s motion to dismiss is pending.

In the second case, Friends of Martin’s Beach v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach.  In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach, and purported to quiet title to tide and submerged lands. The commission and the coastal commission filed a joint amicus brief when the case was on appeal. In April 2016, the Court of Appeal issued its decision affirming in part and reversing in part (Friends of Martin’s Beach v. Martins Beach LLC 1 (2016) 246 Cal. App. 4th 1312). The court reversed as to quieting title to tide and submerged lands in favor of the Martins Beach LLCs. The court also reversed and remanded the case for a trial on the issue of dedication claims. The Court of Appeal opinion was later depublished. The trial is scheduled to start in late October 2017.

In the third case, Surfrider Foundation v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal. At the December 2016 commission hearing, a representative of the Surfrider Foundation stated that the gate to Martins Beach Road is open only periodically.

Additionally, in 2009, Martins Beach1 LLC and Martins Beach 2 LLC sued both the coastal commission and the County of San Mateo over public access (case no. CIV485116, San Mateo County Superior Court). This case was dismissed as the plaintiffs had not pursued all administrative remedies available. In 2013 another case was dismissed on similar grounds. In that instance, Martins Beach 1 LLC and Martins Beach 2 LLC sued the coastal commission over a disputed mean high tide line (case no. CIV523571, San Mateo County Superior Court).

In addition to the litigation. According to the coastal commission’s Web site, both it and the County of San Mateo have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. The coastal commission in 2014 started a prescriptive rights survey to document possible historical public access rights at Martins Beach. In 2013, the owners of Martins Beach and a cabin lessee applied for and received an emergency permit to repair a failing sea wall. The property owner has applied to San Mateo County for a follow up coastal development permit for one of the emergency revetments. An additional revetment and associated grading is unpermitted and that violation is unresolved, according to the coastal commission.

Comments

The Kapiloff Land Bank Fund balance. There was approximately $6.3 million available in the fund for title settlements as of July 1, 2016. Limiting contributions from this fund to $1 million would help to ensure that any other necessary acquisitions statewide had funding available to them.

Related/Prior Legislation

SB 968 (Hill, Chapter 922, Statutes of 2014) required the commission to enter into negotiations to obtain public access to Martins Beach and to authorize the commission to pursue eminent domain, if necessary.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee:

• Cost pressures of up to $1 million for costs associated with acquiring a right-of-way or easement for the access route to Martins Beach.
• Significant, unknown costs, for the commission staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.

SUPPORT: (Verified 10/9/17)

Honorable Betty T Yee, California State Controller

Azul

California Coastal Protection Network

California Coastal Trail Association

Coastwalk California

Committee for Green Foothills

Environment California

Environmental Center of San Diego

Ocean Conservancy

Save Our Shores

Save the Waves Coalition

Sierra Club California

Surfrider Foundation

WiLDCOAST

Two individuals

OPPOSITION: (Verified 10/9/17)

None received

ARGUMENTS IN SUPPORT: According to the author, “When the legislature passed, and the Governor signed, SB 968 (Hill, 2014) we were all hopeful that the [commission] would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in October, it became clear that negotiations had ended. At the [commission’s] December meeting, commissioners directed staff to study eminent domain options. This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. SB 42 creates a sub-account within the General Fund to be used for expenses associated with, and including, land acquisition at Martins Beach.”

The author continues that the subaccount “will allow private, public, and government entities to contribute to the sub-account. SB 42 is a critical part of the state’s effort to ensure public access at Martins Beach and consistent with our constitution’s mandate to allow public access to public resources.”

In a joint support letter, the Surfrider Foundation notes, in part, “Martins Beach is a coastal gem hidden away south of Half Moon Bay in unincorporated San Mateo County. Visited by local families and vacationers for generations, the broad sandy beach has offered beach goers a scenic escape, a place to recreate with family and friends, and, for some, a home away from home. The nearshore waters were frequented as well for swimming and surfing, but many particularly recall the tradition of catching smelt by casting nets from onshore. A unique exposed rock formation – known to some as the Shark’s Tooth and to others as Pelican Rock – juts out from blue waters and the northern end of the beach and serves as the icon of this special place that many once visited.”

GOVERNOR'S VETO MESSAGE:

I am returning Senate Bill 42 without my signature.

This bill creates the Martins Beach Subaccount in the Land Bank Fund to provide funds to be used for the acquisition of public access along the shoreline near Martins Beach.

Unfortunately, as drafted the bill does not meet the author's intent. This bill precludes the use of eminent domain in this instance and limits the state's options.

Public access to our state beaches and parks is a core value to this state and must be protected. Here however, the public's right to access Martins Beach will be determined in further judicial and administrative proceedings.

ASSEMBLY FLOOR: 57-20, 9/7/17

AYES: Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Eggman, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NOES: Acosta, Travis Allen, Bigelow, Brough, Chávez, Chen, Choi, Cunningham, Fong, Gallagher, Harper, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Steinorth, Voepel

NO VOTE RECORDED: Dahle, Flora

Prepared by:

10/25/17 10:17:25

**** END ****

 UNFINISHED BUSINESS  

Bill No: SB 42

Author:

:

Vote:

SENATE NATURAL RES. & WATER COMMITTEE: 7-1, 3/14/17

AYES: Hertzberg, Allen, Atkins, Hueso, Jackson, Monning, Stern

NOES: Vidak

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/25/17

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

SENATE FLOOR: 28-11, 5/31/17

AYES: Allen, Atkins, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Newman, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wiener

NOES: Anderson, Bates, Fuller, Gaines, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, Wilk

NO VOTE RECORDED: Berryhill

ASSEMBLY FLOOR: 57-20, 9/7/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill creates the Martins Beach Subaccount (subaccount) in the Land Bank Fund (fund). Moneys deposited in the subaccount may be used by the State Lands Commission (commission) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. This bill also allows the commission to use up to $1 million from the fund or any moneys deposited by public or private sources to acquire a right-of-way or easement for the access route, as specified.

Assembly Amendments

require the use of monies placed in the subaccount from the fund to be used consistent with the act’s statutory section that bars an acquisition by eminent domain.

ANALYSIS:

Existing law:

1. Establishes the commission with authority over California’s sovereign and certain other lands. The commission administers these lands pursuant to statute and the public trust doctrine, as applicable.
   1. The public trust doctrine is a common law doctrine that specifies the state’s authority as sovereign to exercise continuous supervision and control over the navigable waters of the state and tidelands, among other things. The doctrine includes the protection of maritime or water dependent commerce, navigation, and fisheries, and the preservation of the lands in their natural state. Incidental uses that directly promote trust uses or that lend themselves to the public’s enjoyment of trust lands, including the provision of public access to trust lands, are also permitted.
2. Creates, through the Kapiloff Land Bank Act (act), the Land Bank Fund (fund) and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements.
   1. Moneys in the fund are available for expenditure by the trustee to purchase outstanding interest in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes, including to provide public access.
   2. The act generally requires acquisitions to be by negotiated agreement, not by eminent domain, although existing law authorizes the commission to acquire a right-of-way or easement across private land in certain circumstances by purchase, lease, gift, exchange, or condemnation.
3. Requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property, as described, located in an unincorporated area of San Mateo County, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach.
   1. The commission is authorized, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

This bill:

1. Creates the Martins Beach Subaccount (subaccount) in the fund. Moneys deposited in the subaccount may be used by the commission to create a public access route to and along the shoreline of Martins Beach, as specified.
2. Allows the commission to use up to $1 million from the fund or any moneys deposited by San Mateo County or other public or private sources to acquire a right-of-way or easement for the access route. In particular, this bill:
   1. Authorizes the commission to use any moneys transferred from the fund to the subaccount after the other funds in the subaccount have been expended.
      1. Any General Fund moneys in the subaccount must be segregated and separately accounted for.
   2. Authorizes the expenditure of moneys in the subaccount for certain costs associated with the acquisition, such as environmental studies, as specified, and continuously appropriates moneys in the subaccount.
   3. Allows the moneys in the subaccount to be used for an acquisition through either a negotiated agreement or condemnation.
   4. Requires the commission to use moneys in the subaccount first to obtain public access to Martins Beach.
   5. Requires the use of monies placed in the subaccount from the fund to be used consistent with the act’s statutory section that bars an acquisition by eminent domain.
3. Is an urgency measure to facilitate the transfer of moneys to the commission.
4. Justifies the need for a special statute.

Background

Martins Beach is located on the coast of San Mateo County approximately eight miles south of Half Moon Bay. Seventy-five foot cliffs are located on both the north and south ends of the beach. Access to the beach from the land is via a private road (Martins Beach Road) from Highway 1. There are dozens of cabins on long-term ground leases adjacent to the beach area.

Prior to July 2008, a single family had owned Martins Beach and the surrounding land for over 100 years. At various times the family allowed the public access to the beach and there were facilities available for use by the public, such as a general store and restrooms. These activities started before the passage of the Coastal Act (Public Resources Code (PRC) §§30000 et seq.).

In July 2008, two parcels totaling 89 acres from Highway 1 west to the coast and encompassing most of Martins Beach and all of Martins Beach Road were sold for $37.5 million (the Martins Beach property). The new owners of the two parcels are Martins Beach 1, LLC and Martins Beach 2, LLC. Vinod Khosla, the prominent venture capitalist, and his family are behind these two LLCs.

In fall 2009 or at some point thereafter, local management of the Martins Beach property closed and locked a gate on Martins Beach Road at Highway 1, and repainted a roadside sign indicating the beach, among other actions. According to the local management, the road and parking area were in disrepair and it was uneconomic to provide a parking attendant at the beach. Considerable controversy ensued and continues to today. Multiple efforts to obtain public access to the beach commenced and also continue to today. There are numerous news stories describing attempts by surfers and others to access the Martins Beach property as well as chronicling the efforts by stakeholders to obtain public access to Martin’s Beach again and by the owners to deny or limit it. These efforts include legislation, negotiation and litigation.

Legislative efforts to obtain Martins Beach access. SB 968 (Hill, Chapter 922, Statutes of 2014) requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. SB 968 also authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

Commission efforts to obtain Martins Beach access pursuant to SB 968. At the commission’s December 6, 2016 hearing, the executive officer of the commission reported that negotiations had broken down with the owners of the Martins Beach property. The commission’s negotiators had offered $360,000 for public access to Martins Beach. According to news reports, the owners asked for $30 million for public access. Additionally, the owners filed a federal suit against the commission and others in September 2016.

The commission directed staff at the same December hearing to “report back on specific process elements associated with condemnation, options, timeliness, resources needed, and implications relevant to the three pending lawsuits.” Staff noted at the hearing that the commission had not voted to authorize condemnation, there was no predetermination by the commission to condemn, and that a condemnation appraisal for access based upon the highest probable price would likely yield a different value than the $360,000 offered due to varying appraisal standard requirements. The commission has not previously used condemnation.

Martins Beach litigation. There are three active pending cases involving the Martins Beach property. First, in September 2016, Martins Beach 1 LLC and Martins Beach 2 LLC filed litigation in the U.S. District Court against the commission, the California Coastal Commission (coastal commission), San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that PRC Section 6213.5 (SB 968) is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff’s equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A ruling on the coastal commission’s motion to dismiss is pending.

In the second case, Friends of Martin’s Beach v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach.  In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach, and purported to quiet title to tide and submerged lands. The commission and the coastal commission filed a joint amicus brief when the case was on appeal. In April 2016, the Court of Appeal issued its decision affirming in part and reversing in part (Friends of Martin’s Beach v. Martins Beach LLC 1 (2016) 246 Cal. App. 4th 1312). The court reversed as to quieting title to tide and submerged lands in favor of the Martins Beach LLCs. The court also reversed and remanded the case for a trial on the issue of dedication claims. The Court of Appeal opinion was later depublished. The trial is scheduled to start in late October 2017.

In the third case, Surfrider Foundation v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal. At the December 2016 commission hearing, a representative of the Surfrider Foundation stated that the gate to Martins Beach Road is open only periodically.

Additionally, in 2009, Martins Beach1 LLC and Martins Beach 2 LLC sued both the coastal commission and the County of San Mateo over public access (case no. CIV485116, San Mateo County Superior Court). This case was dismissed as the plaintiffs had not pursued all administrative remedies available. In 2013 another case was dismissed on similar grounds. In that instance, Martins Beach 1 LLC and Martins Beach 2 LLC sued the coastal commission over a disputed mean high tide line (case no. CIV523571, San Mateo County Superior Court).

In addition to the litigation. According to the coastal commission’s Web site, both it and the County of San Mateo have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. The coastal commission in 2014 started a prescriptive rights survey to document possible historical public access rights at Martins Beach. In 2013, the owners of Martins Beach and a cabin lessee applied for and received an emergency permit to repair a failing sea wall. The property owner has applied to San Mateo County for a follow up coastal development permit for one of the emergency revetments. An additional revetment and associated grading is unpermitted and that violation is unresolved, according to the coastal commission.

Comments

The Kapiloff Land Bank Fund balance. There was approximately $6.3 million available in the fund for title settlements as of July 1, 2016. Limiting contributions from this fund to $1 million would help to ensure that any other necessary acquisitions statewide had funding available to them.

Related/Prior Legislation

SB 968 (Hill, Chapter 922, Statutes of 2014) required the commission to enter into negotiations to obtain public access to Martins Beach and to authorize the commission to pursue eminent domain, if necessary.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee:

1. Cost pressures of up to $1 million for costs associated with acquiring a right-of-way or easement for the access route to Martins Beach.
2. Significant, unknown costs, for the commission staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.

SUPPORT: (Verified 9/5/17)

Honorable Betty T Yee, California State Controller

Azul

California Coastal Protection Network

California Coastal Trail Association

Coastwalk California

Committee for Green Foothills

Environment California

Environmental Center of San Diego

Ocean Conservancy

Save Our Shores

Save the Waves Coalition

Sierra Club California

Surfrider Foundation

WiLDCOAST

Two individuals

OPPOSITION: (Verified 9/5/17)

None received

ARGUMENTS IN SUPPORT: According to the author, “When the legislature passed, and the Governor signed, SB 968 (Hill, 2014) we were all hopeful that the [commission] would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in October, it became clear that negotiations had ended. At the [commission’s] December meeting, commissioners directed staff to study eminent domain options. This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. SB 42 creates a sub-account within the General Fund to be used for expenses associated with, and including, land acquisition at Martins Beach.”

The author continues that the subaccount “will allow private, public, and government entities to contribute to the sub-account. SB 42 is a critical part of the state’s effort to ensure public access at Martins Beach and consistent with our constitution’s mandate to allow public access to public resources.”

In a joint support letter, the Surfrider Foundation notes, in part, “Martins Beach is a coastal gem hidden away south of Half Moon Bay in unincorporated San Mateo County. Visited by local families and vacationers for generations, the broad sandy beach has offered beach goers a scenic escape, a place to recreate with family and friends, and, for some, a home away from home. The nearshore waters were frequented as well for swimming and surfing, but many particularly recall the tradition of catching smelt by casting nets from onshore. A unique exposed rock formation – known to some as the Shark’s Tooth and to others as Pelican Rock – juts out from blue waters and the northern end of the beach and serves as the icon of this special place that many once visited.”

ASSEMBLY FLOOR: 57-20, 9/7/17

AYES: Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Eggman, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NOES: Acosta, Travis Allen, Bigelow, Brough, Chávez, Chen, Choi, Cunningham, Fong, Gallagher, Harper, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Steinorth, Voepel

NO VOTE RECORDED: Dahle, Flora

Prepared by:

9/8/17 10:36:29

**** END ****

SENATE THIRD READING

STR Bill Id:SB 42

Author:(Hill)

As Amended Ver:June 22, 2017

2/3 vote. Urgency

SENATE VOTE: 28-11

SUMMARY: Creates the Martins Beach Subaccount (subaccount) in the Kapiloff Land Bank Fund (fund). Moneys deposited in the subaccount may be used by the State Lands Commission (SLC) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. Specifically, this bill:

1. Creates a subaccount in the fund. Requires that moneys received from public or private sources, including nonprofit sources, to be used to acquire a public access route to and along the shoreline, including the beach, be deposited in the subaccount.
2. Requires the moneys received from public or private sources to be expended first from the subaccount to create a public access route for Martins Beach either through a negotiated agreement or eminent domain.
3. Authorizes SLC to also transfer up to one million dollars from the fund to the subaccount. Maintains the prohibition on the fund being used for eminent domain
4. Authorizes SLC to deposit money received from the County of San Mateo into the subaccount to create a public access route.
5. Declares urgency and that this statute takes effect immediately.

EXISTING LAW:

1. Declares, pursuant to the California Constitution, that the right of eminent domain exists in the state to all frontages on the navigable waters of the state.
2. Prohibits, pursuant to the California Constitution, an individual claiming or possessing the frontage or tidal lands of navigable waters from excluding the right-of-way to such waters whenever it is required for any public purpose or from destroying or obstructing the free navigation of such water. Requires the Legislature to enact such laws giving the most liberal construction to this provision, so that access to the navigable waters of this state shall be always attainable for the people thereof.
3. Protects, pursuant to the common law doctrine of the Public Trust (Public Trust Doctrine), the public's right to use California's waterways for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. The Public Trust Doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways are to be held in trust by the state for the benefit of the people of California.
4. Requires SLC to be the steward and manager of the state's public trust lands. SLC has direct administrative control over the state's public trust lands and oversight authority over public trust lands granted by the Legislature to local governments.
5. If SLC has public land, including lands subject to the public trust for commerce, navigation, and fisheries, to which there is no access available, authorizes SLC to acquire by purchase, lease, gift, exchange, or, if all negotiations fail, by eminent domain, a right-of-way or easement across privately-owned land or other land that it deems necessary to provide access to such public land.
6. Creates the fund and requires all moneys in the fund be appropriated to the SLC for expenditure, without regard to fiscal years, for title settlements.
7. Requires SLC to consult, and enter into any necessary negotiations, with the owners of the property known as Martins Beach, in the County of San Mateo, to acquire a right-of-way or easement to create a public access route to and along the shoreline, including the beach.
8. Requires, if the SLC is unable to reach an agreement to acquire a right-of-way or easement or the owners do not voluntarily provide public access by January 1, 2016, SLC to acquire a right-of-way or easement to create a public access route to and along the shoreline, including the beach, in accordance with the procedures of the Eminent Domain Law.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Cost pressures of up to $1 million for costs associated with acquiring a right-of-way or easement for the access route to Martins Beach.
2. Significant, unknown costs, for SLC staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.

COMMENTS:

1. Background. The Martins Beach property is a 53-acre beachfront property located on Highway 1 south of Half Moon Bay. There is a road on the property commonly referred to as Martins Beach Road that leads from the entrance on Highway 1 to the beach. Martins Beach Road is the only road to the beach. The beach is sheltered from the north and south by high cliffs that stretch out into the Pacific Ocean forming an isolated cove. There is no reasonable access from other beaches to the north or south as Martins Beach is separated from other beaches by the high cliffs. There are also 45 cabins on long-term leases (through approximately 2021) that sit above the beach on a bluff that rises 180 feet above the ocean.

The beach was purchased on July 22, 2008 for $32.5 million by Martins Beach 1, LLC and Martins Beach 2, LLC (Martins Beach LLCs). Vinod Khosla, a venture capitalist, and his family are behind these two LLCs. The former owners of Martins Beach — the Deeney Family — owned the beach for over 100 years and welcomed the public to the beach upon payment of a reasonable fee. Martins Beach was a popular community beach that was used for picnicking, fishing, surfing, and other recreational uses. The Deeney family also provided a general store and public restrooms. This changed when Martins Beach LLCs purchased the property, closed the gate to the road, and put security guards on the beach. Martins Beach LLCs have attempted to support criminal prosecution of those who are allegedly trespassing on the property. In response, a group of citizens staged rallies and generated press coverage in an attempt to regain public access to the beach.

1. Litigation. There are several pending lawsuits involving the Martins Beach property. Martins Beach LLCs has filed litigation in the United States (U.S.) District Court against SLC, the California Coastal Commission (CCC), San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that SB 968 is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff's equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A hearing regarding the CCC's motion to dismiss is scheduled for June 23, 2017.

In Friends of Martin's Beach v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach. In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach. The SLC and the CCC filed a joint amicus brief when the case was on appeal. In April 2016, the appellate panel rejected the claim that Martins Beach LLCs owned the tidal zone and submerged land off the coast of Martins Beach. The appellate court also found the public does not have the right under the California constitution to cross Khosla's property to reach the shoreline. The appellate court sent part of the case back to superior court for trial.

In Surfrider Foundation v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner's lack of compliance with the Coastal Act before closing the road to the beach. In December 2014, the court found that Martins Beach LLCs' actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal. In August the First District Court of Appeals in San Francisco ruled 3-0 that venture capitalist Vinod Khosla violated the Coastal Act by ending public access to the beach. The court ordered Khosla to open the gate immediately. While the gate has not been open yet, the San Mateo County Sheriff's Office considers the scenic stretch of coastline open. According the Sheriff's office, people can walk around Khosla's gate and deputies will not write tickets or arrest them for trespassing.

Analysis Prepared by: Michael Jarred / NAT. RES. / FN: 0001708

Date of Hearing: July 19, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 42

Author:(Hill) – As Amended Ver:June 22, 2017

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This urgency bill creates the Martins Beach Subaccount (subaccount) in the Land Bank Fund (fund) for moneys to be deposited to be used by the State Lands Commission (SLC) to create a public access route to and along the shoreline of Martins Beach in San Mateo County.

Additionally, this bill allows the SLC to use up to $1 million from the fund, or any moneys deposited by public or private sources, to acquire a right-of-way or easement for the access route.

FISCAL EFFECT:

1. Cost pressures of up to $1 million for costs associated with acquiring a right-of-way or easement for the access route to Martins Beach.
2. Significant, unknown costs, for SLC staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.

COMMENTS:

1. Background and Purpose. SB 968 (Hill), Chapter 922, Statutes of 2014, required SLC to consult and enter into any necessary negotiations, with the owners of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. SB 968 also authorized SLC, if it is unable to reach an agreement, or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement by condemnation through an eminent domain proceeding.

At the SLC’s December 6, 2016 hearing, the executive officer reported that negotiations had broken down with the owners of the Martins Beach property. The SLC’s negotiators had offered $360,000 for public access to Martins Beach. According to news reports, the owners asked for $30 million for public access. Additionally, the owners filed a federal suit against the SLC and others in September 2016.

The SLC directed staff at the same December hearing to report back on specific process elements associated with condemnation, options, timeliness, resources needed, and implications relevant to the three pending lawsuits. Staff noted at the hearing that the commission had not voted to authorize condemnation, there was no predetermination by the commission to condemn, and that a condemnation appraisal for access based upon the highest probable price would likely yield a different value than the $360,000 offered due to varying appraisal standard requirements.

According to the author, “When the Legislature passed, and the Governor signed, SB 968 we were all hopeful that the SLC would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in September, it became clear that negotiations had ended. At the SLC December meeting, Commissioners directed staff to study eminent domain options. This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. It’s critical that the Legislature and Governor provide the tools and resources necessary for SLC to carry out their commitment of ensuring public access at Martins Beach.”

1. Martins Beach. The Martins Beach property (property) consists of two parcels, totaling approximately 89 acres, of beachfront property located on Highway 1 south of Half Moon Bay. The only road to the beach, commonly known as Martins Beach Road, is located on the property.

Prior to 2008, the Deeney family had owned the property for more than 100 years. They allowed public access upon payment of a parking fee and also provided facilities such as a general store and restrooms. In 2008, the property was purchased by two limited liability companies (Martins Beach, LLC).

Public access to and use of the beach remained in place for approximately two years. However, in 2010, the new owners locked the gate to prevent access to the road, posted a sign stating that the beach was temporarily closed for repair, and later hired security guards to deter members of the public from accessing the beach. They also supported failed efforts to prosecute trespassers.

Several lawsuits have been filed involving Martins Beach, LLC, various government entities, and nonprofit organizations. The Surfrider Foundation and Friends of Martins Beach are suing the landowner, demanding public access to the beach. Both cases are currently pending appellate decision. Martins Beach, LLC has also filed a lawsuit against the California Coastal Commission (Coastal Commission), the SLC and the San Mateo County Planning and Building Department claiming that the agencies are targeting the company for “uniquely disfavorable treatment” by demanding permits, denying permits, refusing to enforce trespass laws and by threatening condemnation proceedings to coerce him into allowing public access.

In addition to litigation, both the Coastal Commission and San Mateo County have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. In 2014, the Coastal Commission also started a prescriptive rights survey to document possible historical public access rights at Martins Beach.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: July 11, 2017

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 42

Author:(Hill) – As Amended Ver:June 22, 2017

SENATE VOTE: 28-11

SUBJECT: PUBLIC LANDS: MARTINS BEACH: PROPERTY ACQUISITION

KEY ISSUE: IN ORDER TO FURTHER THE STATE LANDS COMMISSION'S EFFORTS TO ACQUIRE A RIGHT-OF-WAY THAT WILL PROVIDE PUBLIC ACCESS TO MARTINS BEACH, should THE LEGISLATURE ESTABLISH A SPECIAL SUBACCOUNT, WITHIN THE LAND BANK ACCOUNT, THAT WILL ALLOW PUBLIC AND PRIVATE FUNDS TO BE RECEIVED AND EXPENDED FOR THAT PURPOSE?

SYNOPSIS

Martins Beach, located in San Mateo County, is a significant local coastal resource that had been accessible to local residents and visitors for more than 100 years.  However, since the sale of the property adjacent to the beach in 2008, Californians have been unable to access Martins Beach by land because the only road leading to the beach has been closed by the current land owner, Vinod Khosla, who controls the road and adjacent property.  To address the lack of access to Martins Beach caused by this closure, in 2014 the Legislature passed and the Governor signed SB 968 (Hill), a bill that directed the State Lands Commission (SLC or Commission) to negotiate with the Martins Beach owner in order to acquire a right-of-way or easement to reestablish public access to the beach. According to the author, negotiations between the SLC and the Martins Beach owner occurred during 2015 and the first half of 2016, but failed to produce an agreement for public access.

Under SB 968, if the SLC is unable, by January 1, 2016, to reach an agreement with the owner to acquire a right-of-way or easement or the owner does not voluntarily provide public access, then the SLC is authorized to acquire a right-of-way or easement to create a public access route to Martins Beach using its existing authority, which includes, among other things, the option of eminent domain. Now that January 1, 2016 has passed without the owner voluntarily providing public access and without an agreement being reached to acquire a right-of-way to the beach, the author states that acquisition of an easement is a logical next step for the Commission to take pursuant to SB 968. Accordingly, this bill would establish a subaccount, within the State Land Commission's Land Bank Fund, to receive public and private moneys that can be used to acquire a right-of-way or easement.  According to the author, setting up the subaccount will help facilitate acquisition of a route of public access because moneys in the subaccount can be used for acquisition through exercise of eminent domain, and the subaccount can receive public and private sources of funding specifically for that purpose.  The author reports that San Mateo County is expected to vote to approve a $1,000,000 payment to the Martins Beach subaccount, should this bill be chaptered, which the author contends should be enough to acquire an easement for public access to Martins Beach.  Administration of the subaccount would be handled by the SLC pursuant to existing controls of the Kapiloff Land Bank Act.

Although there are lawsuits brought by environmental groups and coastal access advocates against the owner of Martins Beach currently on appeal, as well as a recent countersuit filed by Khosla against the SLC and San Mateo County, among others, this bill does not appear to impermissibly impact the pending litigation or the courts' consideration of the underlying issues of the right to public access to Martins Beach, or the alleged violation of the landowner's constitutional due process rights.  This bill is supported by a coalition of environmental and coastal access advocates, including the Sierra Club, Surfrider Foundation, and the California Coastal Protection Network. There is no registered opposition to this bill, from the Martins Beach owner or any other party, and it was previously approved by the Assembly Committee on Natural Resources by a 6-1 vote.

SUMMARY: Creates the Martins Beach Subaccount (Subaccount) within the Kapiloff Land Bank Fund (Fund), and specifies rules for the deposit and spending of such funds to create a public access route to Martins Beach. Specifically, this bill: 

1. Creates the Martins Beach Subaccount within the Kapiloff Land Bank Fund to receive moneys, from public or private sources, to be used for the creation of a public access route to and along the shoreline at Martins Beach.
2. Requires received funds to be deposited into the Subaccount and be continuously appropriated to and expended by the Commission to acquire the right-of-way or easement, either through eminent domain or through a negotiated agreement, and pay for costs associated with that acquisition, in accordance with the following priority rules:
   1. Requires moneys deposited into the Subaccount to first be expended by the Commission for the creation of that public access route.
   2. After moneys received pursuant to 2a) have been used, the Commission may also transfer moneys from the Land Bank Fund to the Subaccount, not to exceed a maximum of $1,000,000, and expend those moneys for the creation of the public access route.
3. Clarifies that the Commission may acquire the right-of-way or easement necessary for the creation of the public access route through eminent domain, but that nothing in this bill prevents the Commission from acquiring the right-of-way or easement through a negotiated agreement.
4. Provides that general fund contributions to the Subaccount shall be segregated and separately accounted for, and permits the Commission to deposit into the Subaccount and expend moneys received from the County of San Mateo pursuant to an appropriation by that county.
5. Contains an urgency clause, giving this bill immediate effect upon being chaptered into law.

EXISTING LAW:

1. Provides that no individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, bay, inlet, estuary, or other navigable water in this state, shall be permitted to exclude the right of way to such water whenever it is required for any public purpose, nor to destroy or obstruct the free navigation of such water; and the Legislature shall enact such laws as will give the most liberal construction to this provision, so that access to the navigable waters of this state shall be always attainable for the people thereof. (Cal. Constitution, Article X, Sec. 4.)
2. Finds and declares that the basic goals of the state for the coastal zone are, among other things, to maximize public access to and along the coast and maximize public recreational opportunities in the coastal zone consistent with sound resource conservation principles and constitutionally protected rights of private property owners. (Public Resources Code Section 30001.5 (c). All further references are to this code unless otherwise stated.)
3. Provides that no lands owned by the state which front upon or are near to any lake, navigable stream or other body of navigable water, convenient access to which is not provided by public road or roads, or otherwise, shall ever be sold, leased or rented, without reserving to the people of the state an easement across the lands for convenient access to such waters. (Section 6210.4.)
4. Authorizes the State Lands Commission, in the name of the state, to acquire by purchase, lease, gift, exchange, or, if all negotiations fail, by condemnation, a right-of-way or easement across privately owned land or other land that it deems necessary to provide access to public land, including school land, tide or submerged lands, and lands subject to the public trust for commerce, navigation, and fisheries, to which there is no access available.  (Section 6210.9.)
5. Directs the State Lands Commission (SLC or Commission) to consult, and enter into any necessary negotiations, with the owners of two specified parcels of land in San Mateo County (Martins Beach property) to acquire a right-of-way or easement, pursuant to existing statutory authority, for the creation of a public access route to and along the shoreline, including the sandy beach, at Martins Beach.  (Section 6213.5 (a).)
6. Provides that if the Commission is unable to reach an agreement to acquire a right-of-way or easement or the owners do not voluntarily provide public access to the beach by January 1, 2016, then the Commission may acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach, at Martins Beach. (Section 6213.5 (b).)
7. Directs the Commission to enter into consultation and negotiation with local stakeholders, including, but not limited to, nonprofit entities, local and regional governments, and governmental entities, to address the ongoing management and operation of any property acquired pursuant to 1). (Section 6213.5 (c).)
8. Establishes the Fund in the State Treasury and provides that moneys in the Fund shall be available for expenditure by the trustee to purchase outstanding interests in tide and submerged lands whether or not they have been filled, diked, or cut off from tidal waters, lands which have been or may be converted to wetlands, or adjoining or nearby lands where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes. (Sections 8610, 8613 (a).)
9. Provides that acquisitions under the Kapiloff Land Bank Act (Act) may be made by negotiated agreement with the owners of the outstanding interests, but that nothing in the Act is intended to confer any authority to exercise the power of eminent domain for the purposes of the Act. However, the Commission, acting in its role as trustee for the Land Bank Fund, is authorized to accept gifts of real property or money for the purposes of the Act. (Sections 8617, 8620.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: This bill would establish a subaccount, within the State Land Commission's Kapiloff Land Bank Fund, to receive public and private moneys that can be used to acquire a right-of-way or easement to provide a public access route to Martins Beach.  According to the author, this bill is "part of the multi-year, multi-agency effort to ensure public access at Martins Beach" and is needed in order "to provide the tools and resources necessary for the State Lands Commission to carry out their commitment of ensuring public access at Martins Beach."

Existing law strongly protects the public right of access to California's coast and beaches.  The right of public access to California’s rivers, beaches, and waterways is enshrined in Article X, Section 4, of the California Constitution.  Section 4 declares that “no individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, bay, inlet, estuary, or other navigable water in this state, shall be permitted to exclude the right of way to such water whenever it is required for any public purpose, nor to destroy or obstruct the free navigation of such water.” Section 4 also provides that “the Legislature shall enact such laws as will give the most liberal construction to this provision, so that access to the navigable waters of this state shall be always attainable for the people thereof.”  (Cal. Const., Art. X, Sec. 4.)  With respect to the state’s coastal resources (which includes beaches), the California Coastal Act of 1976 declares that "the basic goals of the state for the coastal zone are . . . to maximize public access to and along the coast and maximize public recreational opportunities in the coastal zone consistent with sound resource conservation principles and constitutionally protected rights of private property owners.” (Section 30001.5 (c).)

To further these stated goals of ensuring public access to the state’s waterways and coastal areas, current law authorizes the Commission, in the name of the state, to acquire by purchase, lease, gift, exchange, or, if all negotiations fail, by condemnation, a right-of-way or easement across privately owned land to provide access to public land to which there is no access available. (Section 6210.9.)

Article X, Sec. 1 of the California Constitution declares that the right of eminent domain exists in the state to all frontages on the navigable waters of the state.  With respect to eminent domain, Article I, Sec. 19 (a) of the state Constitution provides that private property “may be taken or damaged for public use only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.” Current law defines “just compensation” as a property’s fair market value “as determined by any method of valuation that is just and equitable.” (Code of Civil Procedure Sections 1263.310 and 1263.320.)

As enacted by SB 968 (Hill), Ch. 922, Stats. 2014, current law directs the SLC to first enter into negotiations with the owner of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to the beach.  If by January 1, 2016 the Commission is unable to reach an agreement with the owner to acquire a right-of-way or easement or the owner does not voluntarily provide public access, then the Commission is authorized to acquire a right-of-way or easement to create a public access route to Martins Beach using its existing authority under Public Resources Code Section 6210.9, which includes, among other things, the option of eminent domain. This bill would help implement that process by creating a special Martins Beach subaccount within the existing Kapiloff Land Bank Fund, and allowing private and public moneys to be deposited and expended from the subaccount for the purpose of acquiring the right-of-way or easement to Martins Beach.

Background on the Martins Beach property.  The Martins Beach property consists of approximately 53 acres of beachfront property in San Mateo County, located about 10 miles south of Half Moon Bay, along Cabrillo Highway (also known as Highway 1.)  According to the author, the unique geography and tidal regime of Martins Beach make it exceptionally valuable for surfing, fishing, and swimming.  As a practical matter, however, there is no reasonable access to Martins Beach from other beaches to the north or south because the sandy beach is sheltered by high cliffs that stretch out into the Pacific Ocean, forming an isolated cove.  Unless one was to rappel down the cliffs, the only access to the beach is by boat from the off-shore Pacific Ocean tidelands to the west, or by the private Martins Beach Road from the east, leading from the entrance on Highway 1 to the beach. 

According to the author, public access via Martins Beach Road had been allowed for recreational use to local residents and visitors for more than 100 years until 2008.  Under the former owners of the property, the Deeney family, Martins Beach was a popular community beach used for picnicking, fishing, and surfing, among other things.  According to reports, the Deeneys opened a general store on the property in the 1950's and charged a small fee to the public for parking and access to the beach ($5 at the time the property was sold in 2008.)  ("Surfers Lose Fight to Access Half Moon Bay Beach," San Francisco Chronicle (Oct. 25, 2013).)

On July 22, 2008, the Martins Beach property was sold for $32.5 million, and ownership transferred to two limited liability companies, Martins Beach 1, LLC and Martins Beach 2, LLC (Martins Beach LLCs), run by Vinod Khosla, a venture capitalist, and his family.  After the purchase, the gate to the access road was closed, cutting off access to the beachfront, and security guards reportedly began to monitor the property.  In response, a group of citizens staged rallies and generated press coverage in an attempt to regain public access to the beach.

Following the closure of Martins Beach Road, a nonprofit organization called the Friends of Martins Beach sued the new landowner in October 2012 to re-establish public access via the road. (See Friends of Martins Beach v. Martins Beach 1, LLC, Civ-517634, San Mateo County Superior Court.) Plaintiffs claimed, under several legal theories, that the public has the right to traverse the owner's property to access the beach.  In March 2013, the nonprofit Surfrider Foundation brought a second lawsuit challenging the new owner’s compliance with various provisions of the California Coastal Act.  (See Surfrider Foundation v. Martins Beach LLC, et al., Civ-520336, San Mateo County Superior Court.)  Surfrider asserted that Martins Beach, LLC violated the Coastal Act by not applying for a coastal development permit when closing the road to the beach, among other things.  Both lawsuits are still being litigated in the appellate courts (See below for further discussion of pending litigation.)

SB 968 and subsequent negotiations. In September 2014, Governor Brown signed SB 968 (Hill), legislation directing the Commission to negotiate with the Martins Beach owner in order to acquire an easement to ensure public access to the beach. Negotiations between the Commission and Martins Beach LLC began soon after, and continued intermittently during 2015 and the first half of 2016. However, these negotiations have so far failed to produce an agreement, according to the Assembly Natural Resources Committee analysis: 

SLC staff has concluded that Martins Beach LLCs are not interested in selling an easement to the state for public access.  According to SLC staff, Martins Beach LLCs are open to negotiating an agreement that allows the public to access Martins Beach for a limited number of days per year based on the demand level in 2008 where there were more than 10 cars accessing the parking lot.  Martins Beach LLCs are also open to negotiating an agreement to sell the entirety of both properties to the state.  Martins Beach LLCs are amenable to negotiating the first option, basing the number of days it would agree to open the beach on their interpretation of the beach use and demand represented in a 2008 log maintained by them or their contractors.  The 2008 log appears to be incomplete and SLC staff is not confident that it accurately represents the actual public use of and demand for access to Martins Beach.  SLC staff does not believe that an agreement to open the beach for a limited number of days per year based on demand in 2008 would meet the intent of SB 968. 

The parties reportedly remain very far apart on the value of a proposed easement to provide access to Martins Beach. While SLC staff has appraised the value of a proposed easement at $360,000, the owners of the property disagree and instead contend that value of the easement is approximately $30 million. In September 2016, Martins Beach LLC filed a new lawsuit against the State Lands Commission, the California Coastal Commission, and others—effectively signaling the unlikelihood that a negotiated agreement will ever be reached.  According to the author:

When the Legislature passed, and the Governor signed, SB 968 (Hill, 2014) we were all hopeful that the State Lands Commission would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in September, it became clear that negotiations had ended. At the State Lands Commission’s December meeting, Commissioners directed staff to study eminent domain options.

This bill furthers the purpose of existing law to help enable the Commission to acquire a route of public access. This bill would establish a subaccount, within the State Land Commission's Land Bank Fund, to receive public and private moneys that can be used to acquire a right-of-way or easement to provide a public access route to Martins Beach.  Now that January 1, 2016 has passed without the owner voluntarily providing public access and without any agreement being reached to acquire a right-of-way to the beach, acquisition of an easement would be a logical next step for the Commission to take, pursuant to SB 968.  According to the author, setting up the Subaccount will help facilitate acquisition of a route of public access because moneys in the Subaccount can be used for acquisition through exercise of eminent domain, and the Subaccount can receive public and private sources of funding specifically for that purpose.  The author reports, for example, that San Mateo County is willing to provide the Subaccount with $1 million, an amount that the author contends should be enough to acquire an easement for a route of public access. 

The bill specifically authorizes the Commission to deposit moneys received from San Mateo County for acquiring the easement or right of way into the Subaccount. Existing law, Section 8617, allows the Commission, acting in its role as trustee for the Kapiloff Land Bank Fund, to accept gifts of real property or money for purposes of the Fund. In addition, the bill provides the Commission with the option to transfer up to $1 million from the Land Bank Fund into the subaccount, but specifies that moneys from other sources, including any funds from San Mateo County, must be used first. This rule is necessary because under Section 8620, Kapiloff funds (unlike funds from other sources) may not be used to acquire property through eminent domain. It should be noted that there are other potential costs, besides the cost of acquisition, that could be paid for by Kapiloff funds in the subaccount, including environmental studies, analyses, and assessments.

Pending litigation. There are several pending lawsuits involving the Martins Beach property.

In the earliest filed case, dating back to October 2012, the court considered whether the public has a right to traverse private property to access Martins Beach. One year later, in October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach. (Friends of Martin’s Beach v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV517634, San Mateo County Superior Court).) The SLC and the California Coastal Commission (CCC) filed a joint amicus brief when the case was on appeal.  In April 2016, the First District Court of Appeal affirmed the trial court's decision granting summary adjudication to the defendants, which rejected plaintiffs' theory that the California Constitution confers on the public a right of access over the landowner's private property to reach the tidelands at Martins Beach. (246 Cal. App. 4th 1312.)  However, the Court of Appeal also reversed the trial court's grant of summary judgment to defendants on Friends of Martins Beach's common law claims that the predecessor owners of the property had, through their words and actions, offered to dedicate parts of the property to public use over several decades, and the public had accepted the offer. The court found that the record was insufficient to establish that there was no dedication as a matter of law. Finally, the appellate court also reversed the trial court's grant of summary judgment to defendants on Friends of Martins Beach's constitutional claims, to the extent that the trial court's order purported to quiet title to tidelands and submerged lands.  The court ordered the trial court on remand to modify its order accordingly to delete reference to quieting title to tidelands and the submerged land off the coast of Martins Beach.  According to the author, this case is still pending further action.

In March 2013, the nonprofit Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. (Surfrider Foundation v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV520336, San Mateo County Superior Court).) Martins Beach LLC is appealing the decision, and the appeal is still pending in the First District Court of Appeal. 

Committee staff finds that this bill does not appear to impermissibly interfere with either of the two pending lawsuits noted above. First, this bill does not seek to revise or amend any law at issue in either lawsuit, nor to decide an issue or dispute pending before the court. The bill does not address the overarching state constitutional claims of public right of access to the Martins Beach shoreline, nor the issue of title to the tidelands or submerged lands. The bill does not address the issue on appeal in the Surfrider case, namely, whether Martins Beach LLC violated the Coastal Act by failing to obtain a required development permit. Furthermore, neither lawsuit challenges the State Land Commission’s power to acquire a right-of-way or easement for public use, pursuant to its existing authority under the Public Resources Code. Finally, this bill is not retroactive and would not compromise the independence of the judicial branch, nor circumvent its discretion to interpret California law. By its terms, the bill pertains only to future actions by the Commission, in receiving and expending funds in the subaccount, and does not attempt to attach “new legal consequences to events completed before its enactment.”  (Landgraf v. USI Film Products (1994) 511 U.S. 244, 269-70 (internal citations omitted).)

In the most recent case, Martins Beach LLCs filed suit in federal court in September 2016 against the Commission, the CCC, San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California), alleging they have violated Khosla's equal protection rights under the 14^th Amendment by targeting only him and Martins Beach, and not other coastal property owners.  The lawsuit also alleges violations of Khosla's substantive and procedural due process rights, and physical and regulatory taking of property rights without just compensation.  Finally the lawsuit requests declaratory relief that SB 968 is unconstitutional for violating Article IV, Section 16 of the California Constitution (limiting special statutes not of a general nature) and Article 1, Section 10 of the U.S. Constitution (prohibiting bills of attainder.) The case is currently pending.

Under a similar analysis, this bill does not appear to interfere with the now pending lawsuit filed by Martins Beach LLC last September. Committee staff notes that this bill does not grant any new authority to the SLC to use eminent domain to acquire a public right-of-way to Martins Beach. That was an issued settled by enactment of SB 968 in 2014.  Instead, the bill simply creates a Martins Beach subaccount within the existing Kapiloff Land Bank Fund, and allows private and public moneys to be deposited and expended from the subaccount for that purpose. If SLC elects to pursue eminent domain proceedings to acquire an easement, this bill creates an instrument for the SLC to manage the funds that would be used this purpose, including moneys received from public and private sources, and Kapiloff funds as necessary and as permitted by law. If SLC does not pursue eminent domain, or is enjoined by the federal court from doing so, then the tool provided by this bill will simply go unused—but the bill does not by itself cause an unconstitutional taking to occur.  By simply creating an accounting tool to prepare for possible future implementation of SB 968, this bill should not impact the federal court's evaluation of issues concerning whether the plaintiff's equal protection rights were violated, or whether the requirement of a coastal development permit amounts to a regulatory taking of property rights in this case.

With respect to potential violation of Article IV, Section 16 of the California Constitution, it is well settled that those provisions do not prohibit the Legislature from enacting statutes that are applicable solely to a particular county or local entity.  By its express terms, Article IV, Section 16 prohibits special legislation only if “a general statute can be made applicable.” (People v. Mullender (1901) 132 Cal. 217, 221.) In determining whether a general statute can be made applicable, the issue is not whether the Legislature could conceivably enact a similar statute affecting every locality.  (Id. at p. 222.)  Rather, it is whether “there is a rational relationship between the purpose of the enactment and the singling out of [a single] county affected by the statute.” (City of Los Angeles v. City of Artesia (1977) 73 Cal.App.3d 450, 455.) The Legislature's determination that this rational relationship exists is entitled to great weight and will not be reversed unless the determination is arbitrary and without any conceivable factual or legal basis. (Id. at p. 456.) Like its predecessor, SB 968, this bill contains Legislative findings and a declaration that a special statute is necessary in this case, and that a general statute "cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances relating to public access at Martins Beach."

ARGUMENTS IN SUPPORT: This bill is supported by a coalition of environmental and coastal access advocates, including the Sierra Club, Surfrider Foundation, and the California Coastal Protection Network, among others. A number of these groups have submitted a joint letter of support for the bill, stating:

This bill follows through on the will of the state legislature expressed by the passage of SB 968 in 2014, which was enacted into law to require the State Lands Commission to consult and enter into negotiations with the private property owner for a period of one year to purchase all or a portion of the property for a public access road to Martins Beach.  Under SB 968, if purchase could not be negotiated, this bill allowed for the state to acquire all or a portion of the property through eminent domain.  Like its predecessor, SB 42 applies specifically to Martins Beach and does not seek to create broader statute or funds for acquiring property for coastal access.  . . .

Efforts by many parties—including the Coastal Commission, San Mateo County, and most recently the State Lands Commission—to negotiate with the property owner to address the access closure have not been successful to-date.  After two years of efforts to negotiate with the property owner, it has become clear to the State Lands Commission that the only remaining remedy available to the Commission is acquisition through eminent domain, and this bill would facilitate that through establishing an acquisition fund.

REGISTERED SUPPORT / OPPOSITION:

Support

Azul

California Coastal Protection Network

California Coastal Trail Association

California State Controller Betty T. Yee

Coastwalk California

Committee for Green Foothills

Environment California

Environmental Center of San Diego

Ocean Conservancy

Save Our Shores

Save the Waves Coalition

Sierra Club California

Surfrider Foundation

WiLDCOAST

Two individuals

Opposition

None on file

Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334

Date of Hearing: June 19, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

SBPCA Bill Id:SB 42

Author:(Hill) – As Amended Ver:May 26, 2017

SENATE VOTE: 28-11

SUBJECT: Public lands: Martins Beach: property acquisition

SUMMARY: Creates the Martins Beach Subaccount (subaccount) in the Kapiloff Land Bank Fund (fund). Moneys deposited in the subaccount may be used by the State Lands Commission (SLC) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. This bill also allows the SLC to use up to $1 million from the fund, or any moneys deposited by public or private sources, to acquire a right-of-way or easement for the access route. Contains an urgency clause, allowing this bill to take effect immediately upon enactment.

EXISTING LAW:

1. Declares, pursuant to the California Constitution, that the right of eminent domain exists in the state to all frontages on the navigable waters of the state.
   
2. Prohibits, pursuant to the California Constitution, an individual claiming or possessing the frontage or tidal lands of navigable waters from excluding the right-of-way to such waters whenever it is required for any public purpose or from destroying or obstructing the free navigation of such water. Requires the Legislature to enact such laws giving the most liberal construction to this provision, so that access to the navigable waters of this state shall be always attainable for the people thereof.
3. Protects, pursuant to the common law doctrine of the Public Trust (Public Trust Doctrine), the public's right to use California's waterways for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. The Public Trust Doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways are to be held in trust by the state for the benefit of the people of California.
   
4. Requires SLC to be the steward and manager of the state's public trust lands. SLC has direct administrative control over the state's public trust lands and oversight authority over public trust lands granted by the Legislature to local governments.
   
5. If SLC has public land, including lands subject to the public trust for commerce, navigation, and fisheries, to which there is no access available, authorizes SLC to acquire by purchase, lease, gift, exchange, or, if all negotiations fail, by eminent domain, a right-of-way or easement across privately-owned land or other land that it deems necessary to provide access to such public land.
   
6. Creates the fund and requires all moneys in the fund be appropriated to the SLC for expenditure, without regard to fiscal years, for title settlements.
   
7. Requires SLC to consult, and enter into any necessary negotiations, with the owners of the property known as Martins Beach, in the County of San Mateo, to acquire a right-of-way or easement to create a public access route to and along the shoreline, including the beach.
   
8. Requires, if the SLC is unable to reach an agreement to acquire a right-of-way or easement or the owners do not voluntarily provide public access by January 1, 2016, SLC to acquire a right-of-way or easement to create a public access route to and along the shoreline, including the beach, in accordance with the procedures of the Eminent Domain Law.
   

THIS BILL:

1. Creates a subaccount in the fund. Requires that moneys received from public or private sources, including nonprofit sources, to be used to acquire a public access route to and along the shoreline, including the beach, be deposited in the subaccount.
   
2. Requires the moneys received from public or private sources to be expended first from the subaccount to create a public access route for Martins Beach either through a negotiated agreement or eminent domain.
   
3. Authorizes SLC to also transfer up to one million dollars from the fund to the subaccount.
   
4. Authorizes SLC to deposit money received from the County of San Mateo into the subaccount to create a public access route.
   
5. Declares urgency and that this statute takes effect immediately.
   

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. Up to one million dollars (fund), at the SLC’s discretion, for costs associated with acquiring a right-of-way or easement for the access route.
   
2. Significant, unknown costs, to the SLC for staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.
   
3. Unknown, potentially significant, reduction in state costs to acquire right-of-way resulting from the authority to deposit and use funds provided by San Mateo County.
   

COMMENTS:

1. Author’s statement:

When the Legislature passed, and the Governor signed, SB 968 (Hill), Chapter 922, Statutes of 2014, we were all hopeful that the SLC would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in September, it became clear that negotiations had ended. At the SLC December meeting, Commissioners directed staff to study eminent domain options.

This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. It’s critical that the Legislature and Governor provide the tools and resources necessary for SLC to carry out their commitment of ensuring public access at Martins Beach.

1. Background. The Martins Beach property is a 53-acre beachfront property located on Highway 1 south of Half Moon Bay. There is a road on the property commonly referred to as Martins Beach Road that leads from the entrance on Highway 1 to the beach. Martins Beach Road is the only road to the beach. The beach is sheltered from the north and south by high cliffs that stretch out into the Pacific Ocean forming an isolated cove. There is no reasonable access from other beaches to the north or south as Martins Beach is separated from other beaches by the high cliffs. There are also 45 cabins on long-term leases (through approximately 2021) that sit above the beach on a bluff that rises 180 feet above the ocean.
   

The beach was purchased on July 22, 2008 for $32.5 million by Martins Beach 1, LLC and Martins Beach 2, LLC (Martins Beach LLCs). Vinod Khosla, a venture capitalist, and his family are behind these two LLCs. The former owners of Martins Beach—the Deeney Family—owned the beach for over 100 years and welcomed the public to the beach upon payment of a reasonable fee. Martins Beach was a popular community beach that was used for picnicking, fishing, surfing, and other recreational uses. The Deeney family also provided a general store and public restrooms. This changed when Martins Beach LLCs purchased the property, closed the gate to the road, and put security guards on the beach. Martins Beach LLCs have attempted to support criminal prosecution of those who are allegedly trespassing on the property. In response, a group of citizens staged rallies and generated press coverage in an attempt to regain public access to the beach.

1. Litigation. There are several pending lawsuits involving the Martins Beach property. Martins Beach LLCs has filed litigation in the U.S. District Court against SLC, the California Coastal Commission (CCC), San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that SB 968 is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff’s equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A hearing regarding the CCC’s motion to dismiss is scheduled for June 23, 2017.

In Friends of Martin’s Beach v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach.  In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach. The SLC and the CCC filed a joint amicus brief when the case was on appeal. In April 2016, the appellate panel rejected the claim that Martins Beach LLCs owned the tidal zone and submerged land off the coast of Martins Beach. The appellate court also found the public does not have the right under the California constitution to cross Khosla’s property to reach the shoreline. The appellate court sent part of the case back to superior court for trial.

In Surfrider Foundation v. Martins Beach 1, LLC and Martins Beach 2, LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal.

1. Negotiations. On December 31, 2014, SLC staff sent a letter to the Martins Beach LLCs’ representative, requesting a meeting to begin discussions about acquiring a public access easement. Martins Beach LLC representatives voluntarily agreed to meet with SLC staff. SLC staff and Martins Beach LLC representatives met multiple times during 2015 and had intermittent contact in 2016. SLC staff concluded that Martins Beach LLCs are not interested in selling an easement to the state for public access. According to SLC staff, Martins Beach LLCs are open to negotiating an agreement that allows the public to access Martins Beach for a limited number of days per year based on the demand level in 2008 where there were more than 10 cars accessing the parking lot. Martins Beach LLCs are also open to negotiating an agreement to sell the entirety of both properties to the state. Martins Beach LLCs are amenable to negotiating the first option, basing the number of days it would agree to open the beach on their interpretation of the beach use and demand represented in a 2008 log maintained by them or their contractors. The 2008 log appears to be incomplete and SLC staff is not confident that it accurately represents the actual public use of and demand for access to Martins Beach. SLC staff does not believe that an agreement to open the beach for a limited number of days per year based on demand in 2008 would meet the intent of SB 968. SLC staff has appraised the proposed easement at $360,000. However, Martins Beach LLCs strongly disagree with staff’s opinion of value, and instead, value of the easement at approximately $30 million dollars. SLC has directed staff to outline the steps necessary to acquire public access through eminent domain.
   
2. SB 42. The SLC has the power to acquire property through eminent domain. However, SLC has never used that authority. The moneys in the fund are prohibited from being used in acquisitions through eminent domain. The fund has approximately $6.29 million that can be used for acquisitions. At this time, the SLC does not have any funds in its budget to fund acquisition of public access to Martins Beach through eminent domain. SB 42 creates the subaccount, which can be used for acquisition through eminent domain. The subaccount can receive public and private sources of funding, including from San Mateo County. According to news stories, San Mateo County is willing to provide the subaccount with $1 million. Also according to news stories, the author has stated “that $1 million should be enough to buy the land.” This bill authorizes SLC, after other sources have been committed, to transfer up to $1 million from the fund to the subaccount. This would allow for fund moneys to be used for eminent domain. The author and committee may wish to consider removing the authority for SLC to transfer fund moneys to the subaccount to maintain the funds prohibition on eminent domain.
3. Double Referral. This bill has been double referred to the Assembly Judiciary Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Azul
Betty Yee, California State Controller
California Coastal Protection Network
Committee For Green Foothills
Environmental Center of San Diego
Environment California
Ocean Conservancy
Save Our Shores
Save the Waves Coalition
Sierra Club California
Surfrider Foundation
Wildcoast
Two individuals

Opposition

None on file

Analysis Prepared by: Michael Jarred / NAT. RES. /

 THIRD READING  

Bill No: SB 42

Author:

:

Vote:

SENATE NATURAL RES. & WATER COMMITTEE: 7-1, 3/14/17

AYES: Hertzberg, Allen, Atkins, Hueso, Jackson, Monning, Stern

NOES: Vidak

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/25/17

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

SUBJECT:

SOURCE: Author

DIGEST:

This bill creates the Martins Beach Subaccount (subaccount) in the Land Bank Fund (fund). Moneys deposited in the subaccount may be used by the State Lands Commission (commission) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. This bill also allows the commission to use up to $1 million from the fund or any moneys deposited by public or private sources to acquire a right-of-way or easement for the access route.

ANALYSIS:

Existing law:

1. Establishes the commission with authority over California’s sovereign and certain other lands. The commission administers these lands pursuant to statute and the public trust doctrine, as applicable.
   1. The public trust doctrine is a common law doctrine that specifies the state’s authority as sovereign to exercise continuous supervision and control over the navigable waters of the state and tidelands, among other things. The doctrine includes the protection of maritime or water dependent commerce, navigation, and fisheries, and the preservation of the lands in their natural state. Incidental uses that directly promote trust uses or that lend themselves to the public’s enjoyment of trust lands, including the provision of public access to trust lands, are also permitted.
2. Creates, through the Kapiloff Land Bank Act, the Land Bank Fund (fund) and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements.
   1. Moneys in the fund are available for expenditure by the trustee to purchase outstanding interest in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes, including to provide public access.
3. Requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property, as described, located in an unincorporated area of San Mateo County, to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach.
   1. The commission is authorized, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

This bill:

1. Creates the Martins Beach Subaccount (subaccount) in the fund. Moneys deposited in the subaccount may be used by the commission to create a public access route to and along the shoreline of Martins Beach, as specified.
2. Allows the commission to use up to $1 million from the fund or any moneys deposited by San Mateo County or other public or private sources to acquire a right-of-way or easement for the access route. In particular, this bill:
   1. Authorizes the commission to use any moneys transferred from the fund to the subaccount after the other funds in the subaccount have been expended.
      1. Any General Fund moneys in the subaccount must be segregated and separately accounted for.
   2. Authorizes the expenditure of moneys in the subaccount for certain costs associated with the acquisition, such as environmental studies, as specified, and continuously appropriates moneys in the subaccount.
   3. Allows the moneys in the subaccount to be used for an acquisition through either a negotiated agreement or condemnation.
   4. Requires the commission to use moneys in the subaccount first to obtain public access to Martins Beach.
3. Is an urgency measure to facilitate the transfer of moneys to the commission.

Background

Martins Beach is located on the coast of San Mateo County approximately eight miles south of Half Moon Bay. Seventy-five foot cliffs are located on both the north and south ends of the beach. Access to the beach from the land is via a private road (Martins Beach Road) from Highway 1. There are dozens of cabins on long-term ground leases adjacent to the beach area.

Prior to July 2008, a single family had owned Martins Beach and the surrounding land for over 100 years. At various times the family allowed the public access to the beach and there were facilities available for use by the public, such as a general store and restrooms. These activities started before the passage of the Coastal Act (Public Resources Code (PRC) §§30000 et seq.).

In July 2008, two parcels totaling 89 acres from Highway 1 west to the coast and encompassing most of Martins Beach and all of Martins Beach Road were sold for $37.5 million (the Martins Beach property). The new owners of the two parcels are Martins Beach 1, LLC and Martins Beach 2, LLC. Vinod Khosla, the prominent venture capitalist, and his family are behind these two LLCs.

In fall 2009 or at some point thereafter, local management of the Martins Beach property closed and locked a gate on Martins Beach Road at Highway 1, and repainted a roadside sign indicating the beach, among other actions. According to the local management, the road and parking area were in disrepair and it was uneconomic to provide a parking attendant at the beach. Considerable controversy ensued and continues to today. Multiple efforts to obtain public access to the beach commenced and also continue to today. There are numerous news stories describing attempts by surfers and others to access the Martins Beach property as well as chronicling the efforts by stakeholders to obtain public access to Martin’s Beach again and by the owners to deny or limit it. These efforts include legislation, negotiation and litigation.

Legislative efforts to obtain Martins Beach access. SB 968 (Hill, Chapter 922, Statutes of 2014) requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. SB 968 also authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding.

Commission efforts to obtain Martins Beach access pursuant to SB 968. At the commission’s December 6, 2016 hearing, the executive officer of the commission reported that negotiations had broken down with the owners of the Martins Beach property. The commission’s negotiators had offered $360,000 for public access to Martins Beach. According to news reports, the owners asked for $30 million for public access. Additionally, the owners filed a federal suit against the commission and others in September 2016.

The commission directed staff at the same December hearing to “report back on specific process elements associated with condemnation, options, timeliness, resources needed, and implications relevant to the three pending lawsuits.” Staff noted at the hearing that the commission had not voted to authorize condemnation, there was no predetermination by the commission to condemn, and that a condemnation appraisal for access based upon the highest probable price would likely yield a different value than the $360,000 offered due to varying appraisal standard requirements. The commission has not previously used condemnation.

Martins Beach litigation. There are three active pending cases involving the Martins Beach property. First, in September 2016, Martins Beach 1 LLC and Martins Beach 2 LLC filed litigation in the U.S. District Court against the commission, the California Coastal Commission (coastal commission), San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that PRC Section 6213.5 (SB 968) is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff’s equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A hearing regarding the coastal commission’s motion to dismiss is scheduled in June 2017.

In the second case, Friends of Martin’s Beach v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach.  In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach, and purported to quiet title to tide and submerged lands. The commission and the coastal commission filed a joint amicus brief when the case was on appeal. In April 2016, the Court of Appeal issued its decision affirming in part and reversing in part (Friends of Martin’s Beach v. Martins Beach LLC 1 (2016) 246 Cal. App. 4th 1312). The court reversed as to quieting title to tide and submerged lands in favor of the Martins Beach LLCs. The court also reversed and remanded the case for a trial on the issue of dedication claims. The Court of Appeal opinion was later depublished.

In the third case, Surfrider Foundation v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal. At the December 2016 commission hearing, a representative of the Surfrider Foundation stated that the gate to Martins Beach Road is open only periodically.

Additionally, in 2009, Martins Beach1 LLC and Martins Beach 2 LLC sued both the coastal commission and the County of San Mateo over public access (case no. CIV485116, San Mateo County Superior Court). This case was dismissed as the plaintiffs had not pursued all administrative remedies available. In 2013 another case was dismissed on similar grounds. In that instance, Martins Beach 1 LLC and Martins Beach 2 LLC sued the coastal commission over a disputed mean high tide line (case no. CIV523571, San Mateo County Superior Court).

In addition to the litigation. According to the coastal commission’s Web site, both it and the County of San Mateo have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. The coastal commission in 2014 started a prescriptive rights survey to document possible historical public access rights at Martins Beach. In 2013, the owners of Martins Beach and a cabin lessee applied for and received an emergency permit to repair a failing sea wall. The property owner has applied to San Mateo County for a follow up coastal development permit for one of the emergency revetments. An additional revetment and associated grading is unpermitted and that violation is unresolved, according to the coastal commission.

Comments

The Kapiloff Land Bank Fund balance. There was approximately $6.3 million available in the fund for title settlements as of July 1, 2016. Limiting contributions from this fund to $1 million would help to ensure that any other necessary acquisitions statewide had funding available to them.

Related/Prior Legislation

SB 968 (Hill, Chapter 922, Statutes of 2014) required the commission to enter into negotiations to obtain public access to Martins Beach and to authorize the commission to pursue eminent domain, if necessary.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Up to $1 million from the fund, at the commission’s discretion, for costs associated with acquiring a right-of-way or easement for the access route.
• Significant, unknown costs, to the commission for staff time to administer the subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.
• Unknown, potentially significant, reduction in state costs to acquire right-of-way resulting from the authority to deposit and use funds provided by San Mateo County.

SUPPORT: (Verified 5/25/17)

Betty T Yee, California State Controller

Azul

California Coastal Protection Network

California Coastal Trail Association/Coastwalk California

Committee for Green Foothills

Environment California

Environmental Center of San Diego

Ocean Conservancy

Save Our Shores

Save the Waves Coalition

Sierra Club California

Surfrider Foundation

WiLDCOAST

Two individuals

OPPOSITION: (Verified 5/25/17)

None received

ARGUMENTS IN SUPPORT: According to the author, “When the legislature passed, and the Governor signed, SB 968 (Hill, 2014) we were all hopeful that the [commission] would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in October, it became clear that negotiations had ended. At the [commission’s] December meeting, commissioners directed staff to study eminent domain options. This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. SB 42 creates a sub-account within the General Fund to be used for expenses associated with, and including, land acquisition at Martins Beach.”

The author continues that the subaccount “will allow private, public, and government entities to contribute to the sub-account. SB 42 is a critical part of the state’s effort to ensure public access at Martins Beach and consistent with our constitution’s mandate to allow public access to public resources.”

In a joint support letter, the Surfrider Foundation notes, in part, “Martins Beach is a coastal gem hidden away south of Half Moon Bay in unincorporated San Mateo County. Visited by local families and vacationers for generations, the broad sandy beach has offered beach goers a scenic escape, a place to recreate with family and friends, and, for some, a home away from home. The nearshore waters were frequented as well for swimming and surfing, but many particularly recall the tradition of catching smelt by casting nets from onshore. A unique exposed rock formation – known to some as the Shark’s Tooth and to others as Pelican Rock –

juts out from blue waters and the northern end of the beach and serves as the icon of this special place that many once visited.”

Prepared by:

5/27/17 17:40:34

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 42 (Hill) - Public lands: Martins Beach: property acquisition

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 25, 2017

Bill Summary:

SB 42 creates the Martins Beach Subaccount (subaccount) in the Kapiloff Land Bank Fund (Kapiloff Fund). Monies deposited in the subaccount may be used by the State Lands Commission (commission) to create a public access route to and along the shoreline of Martins Beach in San Mateo County. The bill also allows the commission to use up to $1 million from the Kapiloff Fund or any funds deposited by San Mateo County to acquire a right-of-way or easement for the access route.

Fiscal Impact:

• Up to $1 million (Kapiloff Fund), at the Commission’s discretion, for costs associated with acquiring a right-of-way or easement for the access route.
• Significant, unknown costs, to the Commission for staff time to administer the Subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings.
• Unknown, potentially significant, reduction in state costs to acquire right-of-way resulting from the authority to deposit and use funds provided by San Mateo County.

Author Amendments:

• Remove $360,000 General Fund appropriation.
• Authorize the commission to deposit and use funds appropriated by San Mateo County to acquire a righty-of-way.

-- END --

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 42 (Hill) - Public lands: Martins Beach: property acquisition

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 42 creates the Martins Beach Subaccount (Subaccount) in the Kapiloff Land Bank Fund (Kapiloff Fund) to be used by the State Lands Commission (Commission) to create a public access route to and along the shoreline of Martins Beach. The bill also appropriates $360,000 from the General Fund to the Commission, and allows the Commission to use up to $1 million from the Kapiloff Fund, to acquire a right-of-way or easement for the access route.

Fiscal Impact:

• $360,000 (General Fund) appropriated to the Commission for costs associated with acquiring a right-of-way or easement for the access route.
• Up to $1 million (Kapiloff Fund), at the Commission’s discretion, for costs associated with acquiring a right-of-way or easement for the access route.
• Significant, unknown costs, to the Commission for staff time to administer the Subaccount, to continue negotiations and/or commence eminent domain proceedings, and for litigation costs associated with eminent domain or other proceedings. (See staff comments)

Background:

The Martins Beach property (property) consists of two parcels, totaling approximately 89 acres, of beachfront property located on Highway 1 south of Half Moon Bay. The only road to the beach, commonly known as Martins Beach Road, is located on the property.

Prior to 2008, the Deeney family had owned the property for more than 100 years. They allowed public access upon payment of a parking fee and also provided facilities such as a general store and restrooms. In 2008, the property was purchased by two limited liability companies (Martins Beach, LLC).

Public access to and use of the beach remained in place for approximately two years. However, in 2010, the new owners locked the gate to prevent access to the road, posted a sign stating that the beach was temporarily closed for repair, and later hired security guards to deter members of the public from accessing the beach. They also supported failed efforts to prosecute trespassers.

Several lawsuits have been filed involving Martins Beach, LLC, various government entities, and nonprofit organizations. The Surfrider Foundation and Friends of Martins Beach are suing the landowner, demanding public access to the beach. Both cases are currently pending appellate decision. Martins Beach, LLC has also filed a lawsuit against the California Coastal Commission (Coastal Commission), the California State Lands Commission, and the San Mateo County Planning and Building Department claiming that the agencies are targeting the company for “uniquely disfavorable treatment” by demanding permits, denying permits, refusing to enforce trespass laws and by threatening condemnation proceedings to coerce him into allowing public access.

In addition to litigation, both the Coastal Commission and San Mateo County have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. In 2014, the Coastal Commission also started a prescriptive rights survey to document possible historical public access rights at Martins Beach.

Proposed Law:

This bill:

1. Creates the Martins Beach Subaccount in the Kapiloff Fund to receive public and private funds used to obtain a public access route to Martins Beach. Moneys in the Subaccount would be continuously appropriated to the Commission to cover costs associated with the acquisition.
2. Requires that funds deposited in the Subaccount are first spent on the creation of that public access route.
3. Authorizes the Commission to transfer up to one million dollars from the Kapiloff Fund to the Subaccount to fund the creation of a public access route once all public, private, and nonprofit sources are used.
4. Authorizes the Commission to exercise the power of eminent domain or to reach a negotiated agreement to acquire the right-of-way or easement necessary for the creation of the public access route.
5. Appropriates $360,000 from the General Fund to the Commission to acquire the public access route to Martins Beach, and pay for certain costs associated with that acquisition. Requires General Fund contributions to the Subaccount to be segregated and accounted for separately. Any unused funds would revert to the General Fund.
6. States that this is an urgency measure.

Related Legislation:

SB 968 directed the Commission to commence negotiations with the owners of the Martins Beach property to acquire a public access route to the beach, and directed the Commission to use eminent domain if no agreement is reached by January 1, 2016.

Staff Comments:

The Kapiloff Fund balance. As of July 1, 2016, approximately $6.3 million were available in the fund for title settlements. Limiting contributions from this fund to

$1 million will help ensure funds are available in the account for other acquisitions.

Work in progress: Staff notes that, once resolved, the pending litigation will affect the basis under which public access to Martins Beach is obtained. Staff also notes that the initial $360,000 appraisal may change.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Robert Hertzberg, Chair

2017 - 2018 Regular

Bill No: SB 42 Hearing Date: March 14, 2017

Subject: Public lands: Martins Beach: property acquisition

BACKGROUND AND EXISTING LAW

The State Lands Commission (commission) has authority over California’s sovereign lands and the commission administers these lands pursuant to statute and the public trust doctrine.

The public trust doctrine is a common law doctrine that specifies the state’s authority as sovereign to exercise continuous supervision and control over the navigable waters of the state and tidelands, among other things. The doctrine includes the protection of maritime or water dependent commerce, navigation, and fisheries, and the preservation of the lands in their natural state for scientific study, open space, wildlife habitat, and water-oriented recreation. Incidental uses that directly promote trust uses or that lend themselves to the public’s enjoyment of trust lands, including the provision of public access to trust lands, are also permitted.

Martins Beach is located on the coast of San Mateo County approximately 8 miles south of Half Moon Bay. Seventy-five foot cliffs are located on both the north and south ends of the beach. Access to the beach from the land is via a private road (Martins Beach Road) from Highway 1. There are dozens of cabins on long-term ground leases adjacent to the beach area.

Prior to July 2008, a single family had owned Martins Beach and the surrounding land for over 100 years. At various times the family allowed the public access to the beach and there were facilities available for use by the public, such as a general store and restrooms. These activities started before the passage of the Coastal Act (Public Resources Code (PRC) §§30000 et seq.).

In July 2008, two parcels totaling 89 acres from Highway 1 west to the coast and encompassing most of Martins Beach and all of Martins Beach Road were sold for $37.5 million (the Martins Beach property). The new owners of the two parcels are Martins Beach 1, LLC and Martins Beach 2, LLC. Vinod Khosla, the prominent venture capitalist, and his family are behind these two LLCs.

In fall 2009 or at some point thereafter, local management of the Martins Beach property closed and locked a gate on Martins Beach Road at Highway 1, and repainted a roadside sign indicating the beach, among other actions. According to the local management, the road and parking area were in disrepair and it was uneconomic to provide a parking attendant at the beach. Considerable controversy ensued and continues to today. Multiple efforts to obtain public access to the beach commenced and also continue to today. There are numerous news stories describing attempts by surfers and others to access the Martins Beach property as well as chronicling the efforts by stakeholders to obtain public access to Martin’s Beach again and by the owners to deny or limit it. These efforts include both negotiation and litigation (the lawsuits, including the three pending ones, concerning the Martins Beach property are described below).

SB 968 (Hill, c. 922, Stats. 2014) requires the commission to consult, and enter into any necessary negotiations, with the owners of the Martins Beach property to acquire a right-of-way or easement for the creation of a public access route to and along the shoreline, including the sandy beach. SB 968 also authorizes the commission, if it is unable to reach an agreement to acquire the right-of-way or easement for the creation of that public access route or if the owners do not voluntarily provide access by January 1, 2016, to acquire a right-of-way or easement for the creation of that public access route at Martins Beach by condemnation through an eminent domain proceeding (PRC §6213.5).

At the commission’s December 6, 2016 hearing, the executive officer of the commission reported that negotiations had broken down with the owners of the Martins Beach property. The commission’s negotiators had offered $360,000 for public access to Martins Beach. According to news reports, the owners asked for $30 million for public access. Additionally, the owners filed a federal suit against the commission and others in September 2016.

The commission directed staff at the same December hearing to “report back on specific process elements associated with condemnation, options, timeliness, resources needed, and implications relevant to the three pending lawsuits.” Staff noted at the hearing that the commission had not voted to authorize condemnation, there was no predetermination by the commission to condemn, and that a condemnation appraisal for access based upon the highest probable price would likely yield a different value than the $360,000 offered due to varying appraisal standard requirements.

Existing law, the Kapiloff Land Bank Act (PRC §§ 8600 et seq.), creates the Land Bank Fund (fund) and continuously appropriates moneys in the fund, subject to a statutory trust, to the commission, acting as trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements.

Existing law requires that moneys in the fund be available for expenditure by the trustee to purchase outstanding interest in land where the public use and ownership of the land is necessary or extremely beneficial for furtherance of public trust purposes, including to provide public access.

Existing law authorizes acquisitions by negotiated agreement with the owner of the outstanding interests and specifies that the act is not intended to confer any authority to exercise the power of eminent domain for its purposes (PRC §8620).

PROPOSED LAW

This bill would create a Martin’s Beach-specific subaccount in the fund and provide $360,000 from the General Fund to the commission to facilitate the acquisition of public access to Martin’s Beach by condemnation. Specifically this bill would:

1. Create the Martins Beach subaccount in the existing fund in order to obtain a public access route to and along the shoreline, including the sandy beach, at Martins Beach, as specified, via condemnation. Moneys in the subaccount would be continuously appropriated and would be available to be used for certain costs associated with the acquisition, such as environmental studies.
2. Authorize the subaccount to receive funds for public, private and nonprofit sources.
3. Require the commission to use moneys in the subaccount first to obtain public access to Martins Beach, and also authorize the commission to transfer up to $1 million from the fund to the subaccount to be used after the other funds in the subaccount have been expended.
4. Authorize the use of subaccount funds for this acquisition via condemnation.
5. Require that any General Fund moneys in the subaccount be segregated and separately accounted for.
6. Provide $360,000 from the General Fund to the commission to acquire the public access route via condemnation at Martins Beach, as specified, and pay for certain costs associated with that acquisition. Any unused funds would revert to the General Fund.

Additionally, the bill is an urgency measure to facilitate the transfer of funds to the commission.

ARGUMENTS IN SUPPORT

According to the author, “When the legislature passed, and the Governor signed, SB 968 (Hill, 2014) we were all hopeful that the [commission] would be able to negotiate terms for public access with the land owner at Martins Beach. When the landowner sued the state in October, it became clear that negotiations had ended. At the [commission’s] December meeting, commissioners directed staff to study eminent domain options. This legislation is part of the multi-year, multi-agency effort to ensure public access at Martins Beach. SB 42 creates a sub-account within the General Fund to be used for expenses associated with, and including, land acquisition at Martins Beach. It makes an initial contribution of $360,000 from the General Fund to the sub-account and will allow private, public, and government entities to contribute to the sub-account. SB 42 is a critical part of the state’s effort to ensure public access at Martins Beach and consistent with our constitution’s mandate to allow public access to public resources.”

In a joint support letter, the Surfrider Foundation notes, in part, “Martins Beach is a coastal gem hidden away south of Half Moon Bay in unincorporated San Mateo County. Visited by local families and vacationers for generations, the broad sandy beach has offered beach goers a scenic escape, a place to recreate with family and friends, and, for some, a home away from home. The nearshore waters were frequented as well for swimming and surfing, but many particularly recall the tradition of catching smelt by casting nets from onshore. A unique exposed rock formation – known to some as the Shark’s Tooth and to others as Pelican Rock – juts out from blue waters and the northern end of the beach and serves as the icon of this special place that many once visited.”

ARGUMENTS IN OPPOSITION

None received

COMMENTS

This bill is a work-in-progress. The pending litigation, once resolved, is likely to affect the basis under which public access to Martins Beach is obtained. The appraisal value, initially $360,000, may change. It further remains unclear that the three pending lawsuits will be resolved in a timely manner with respect to this legislation. Should this bill pass the Committee today, the Committee may wish to direct staff to continue working with the author’s office as events related to the Martins Beach property progress.

Technical amendments. Current language requires the funds in the subaccount to be used only via condemnation. Should a negotiated settlement be reached and condemnation avoided, however unlikely, the subaccount funds could not be used. Additionally, the $360,000 provided to the commission is not required to be placed in the subaccount, although subaccount language appears to anticipate it. The Committee may wish to resolve these inconsistencies through technical amendments. [Amendment 1]

The Kapiloff Land Bank Fund balance. There was approximately $6.3 million available in the fund for title settlements as of July 1, 2016. Limiting contributions from this fund to $1 million would help to ensure that any other necessary acquisitions statewide had funding available to them.

Martins Beach litigation. There are three active pending cases involving the Martins Beach property. First, in September 2016, Martins Beach 1 LLC and Martins Beach 2 LLC filed litigation in the U.S. District Court against the commission, the California Coastal Commission (coastal commission), San Mateo County, and its planning and building department director (case no. 16-5590, U.S. District Court, Northern District of California). The lawsuit requests declaratory relief that PRC §6213.5 (SB 968) is unconstitutional and violates Article IV, Section 16 of the California Constitution and Article 1, Section 10 of the U.S. Constitution. Additional allegations include violations of the plaintiff’s equal protection rights and substantive and procedural due process rights, and claims of physical and regulatory taking of property rights without just compensation. A hearing regarding the coastal commission’s motion to dismiss is scheduled for June 23, 2017.

In the second case, Friends of Martin’s Beach v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV517634, San Mateo County Superior Court), the court considered whether the public has a right to traverse private property to access Martins Beach.  In October 2013, the trial court ruled that the property owner could close the road and prevent public access to Martins Beach, and purported to quiet title to tide and submerged lands. The commission and the coastal commission filed a joint amicus brief when the case was on appeal. In April 2016, the Court of Appeal issued its decision affirming in part and reversing in part (Friends of Martin’s Beach v. Martins Beach LLC 1 (2016) 246 Cal. App. 4th 1312). The court reversed as to quieting title to tide and submerged lands in favor of the Martins Beach LLCs. The court also reversed and remanded the case for a trial on the issue of dedication claims. The Court of Appeal opinion was later depublished.

In the third case, Surfrider Foundation v. Martins Beach 1 LLC and Martins Beach 2 LLC, (case no. CIV520336, San Mateo County Superior Court), the Surfrider Foundation sued to challenge the property owner’s lack of compliance with the Coastal Act before closing the road to the beach.  In December 2014, the court found that Martins Beach LLCs’ actions to change the public access to the beach without a coastal development permit violated the Coastal Act. This decision is on appeal. At the December 2016 commission hearing, a representative of the Surfrider Foundation stated that the gate to Martins Beach Road is open only periodically.

Additionally, in 2009, Martins Beach1 LLC and Martins Beach 2 LLC sued both the coastal commission and the County of San Mateo over public access (case no. CIV485116, San Mateo County Superior Court). This case was dismissed as the plaintiffs had not pursued all administrative remedies available. In 2013 another case was dismissed on similar grounds. In that instance, Martins Beach 1 LLC and Martins Beach 2 LLC sued the coastal commission over a disputed mean high tide line (case no. CIV523571, San Mateo County Superior Court).

In addition to the litigation. According to the coastal commission’s web-site, both it and the County of San Mateo have open enforcement cases related to the property owner’s refusal to apply for a coastal permit for changes to the historic beach access. The coastal commission in 2014 started a prescriptive rights survey to document possible historical public access rights at Martins Beach. In 2013 the owners of Martins Beach and a cabin lessee applied for and received an emergency permit to repair a failing sea wall. The property owner has applied to San Mateo County for a follow up coastal development permit for one of the emergency revetments. An additional revetment and associated grading is unpermitted and that violation is unresolved, according to the coastal commission.

The commission has not used condemnation for acquisition before. The commission received the authority to use condemnation in 1975 (PRC §6210.9), but has not exercised it. Hence the direction to commission staff in December to determine the steps necessary for condemnation.

Recent related legislation

SB 968 (Hill, c. 922, Stats. 2014) required the State Lands Commission to enter into negotiations to obtain public access to Martins Beach and to authorize the Commission to pursue eminent domain, if necessary.

SUGGESTED AMENDMENTS

AMENDMENT 1

In PRC §8610, authorize the subaccount to be used for acquisition of public access at Martins Beach, as specified, by condemnation or by negotiated agreement.

In Section 2, require the $360,000 General Fund moneys to be placed in the subaccount and allow for their expenditure for acquisition of public access at Martins Beach, as specified, by condemnation or by negotiated agreement.

SUPPORT

Azul

California Coastal Protection Network

Committee for Green Foothills

Sierra Club California

Surfrider Foundation

WiLDCOAST

2 individuals

OPPOSITION

None Received

-- END --