The Public Trust Doctrine
San Francisco's waterfrontNovember 1, 1999
When San Franciscans travel to cities like Boston or Vancouver, they are often struck by the difference in the way those cities relate to their waterfronts. Like San Francisco, these cities have celebrated port histories, and like San Francisco, they have been trying to reconnect with their industrial waterfronts. However, they have made this connection in different ways than has San Francisco.
One significant difference the visitor notices is that Boston and Vancouver have a great deal of housing on their waterfronts. Tall apartment buildings are spaced along the water, set back from the shoreline by public promenades. In trying to achieve public access to the waterfront, these cities have decided that the edge of the water must be open, but that beyond this band of public access, private uses such as housing are to be encouraged.
Upon returning from these cities, San Franciscans may ask, "Should we take inspiration from these cities? Should we build housing on the waterfront here in San Francisco?" The short answer is that even though some might view the development of housing and other uses such as office buildings on the waterfront as desirable, there are important historical and legal reasons why it is difficult to attain.
To the medieval English legal mind, it was universally accepted that the ownership of land resided in some person or entity. There was, however, one notable exception. Very early in the development of English jurisprudence-possibly even before the Magna Carta in 1215-the common law recognized a principle that appears to have had its genesis in Roman law from the time of the Emperor Justinian: the rivers, ports, sea, shores of the sea, and rights to fish in and use those areas belonged to the public.
Under Roman law, where the concept of private ownership was less important, this articulation of the principle was sufficient. However, in the common law, with its emphasis on ownership and possession, the doctrine took a different form. The "ownership" of such areas was deemed to reside in the King of England and was an inherent element of sovereignty. Thus, under the common law, these public rights were inalienable and could not be transferred by the Crown into private ownership, any more than could any other governmental power held by the sovereign.
This concept, which came to be known as "the public trust for commerce, navigation and fisheries," found its way into American law, and ultimately, into the law of California along with the English common law, which is the foundation of the American legal system. However, as it did so, it collided with the needs of a new and rapidly expanding nation and the laissez-faire attitude prevalent in the 19th century that all property should be used and developed. For a time, the latter prevailed, and there was an orgy of open-handed disposition of public lands. This often included the sale of beds of sovereign waters, including what we now call tidelands (lands lying between the line of mean high tide and the line of mean low tide) and submerged lands (lands lying below the line of mean low tide to the three-mile limit).
California did not escape this parceling-out of its patrimony. When California became a state in 1850, it acquired title from the United States to all of the tide and submerged lands within its new boundaries. The United States had acquired title to these lands from Mexico in 1848 under the Treaty of Guadalupe Hidalgo after the Mexican-American War. Shortly thereafter, the new State Legislature began to authorize the sale of tidelands pursuant to a series of special acts. Much of what is now downtown San Francisco below the original shoreline at Montgomery Street passed into private ownership in this fashion. Oakland's entire waterfront was sold into private ownership by its town fathers pursuant to legislative authorization less than two weeks after its incorporation in 1852, a bit of piracy that spawned decades of litigation thereafter over waterfront titles. By 1868, the Legislature had even established a "Board of Tideland Commissioners" and delegated to it the task of surveying, subdividing, and selling additional tracts of tidelands, a job the Legislature apparently no longer had time for.
But all this eventually came to an end. Dismayed by the abuses perpetrated in their name, the people of the state gradually forced the Legislature to restrict the sale of tide and submerged lands. The 1879 California constitution contained a provision forbidding the sale of any tidelands or submerged lands within two miles of any incorporated city or town. This ban was finally expanded by statute in 1909 to include all tide and submerged lands anywhere in the state. Nevertheless, thousands of acres of tide and submerged lands remained in private ownership in California, or at least what their owners thought was private ownership. That, as it would turn out, was not quite the case. As early as 1641, Massachusetts had recognized in its "great pond ordinance" public rights to hunt the fish and fowl in ponds greater than 10 acres in size, together with freedom of access through private property for that purpose. In California, in addition to restrictions on tidelands sales, the 1879 Constitution in Article XV, Section 2 (now Article X, Section 4) contained a ringing guarantee of public rights to reach and use navigable waters. It provided 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.
Another major turning point in the assertion of public rights in tidelands occurred in 1892, when the United States Supreme Court stifled a particularly repugnant scheme in which the Illinois Legislature tried to sell the entire bed of Lake Michigan along the Chicago waterfront to the Illinois Central Railroad. The court, however, upheld a revocation of the grant by a subsequent session of the Legislature. In doing so, the court established as a principle of American constitutional law that public rights in lands lying under the navigable waters of a state are an element of sovereignty which could not be abdicated or alienated by the state except under very limited circumstances.
California courts have applied this principle relatively strictly ever since. Early cases, such as those dealing with title to portions of downtown San Francisco that were formerly subject to tidal action, had confirmed title free of public rights in the owners of such lands. The rationale was that the needs of maritime commerce were paramount, and these lands were shallow and unusable for maritime commerce. Therefore, trust purposes were best served by permitting these lands to be conveyed into private ownership and filled so that the shoreline was extended to deep water at little or no cost to the public. Later cases, however, strictly construed these early cases and the statutes authorizing the early conveyances. They consistently held that conveyances of tidelands passed title only to the "naked fee," and that the public right to use and enjoy those lands remained intact. In other words, the public retained "ownership" of those rights, and the fee title holder's rights to use and enjoy the property was, and is, subservient to the public's rights to do so. Moreover, those rights have been broadly interpreted, and now extend beyond historical concerns for commerce, navigation and fishing to preservation of such lands in their natural state, in effect precluding all development.
The existence of the public trust and restrictions on sales of tidelands do not prevent the state from granting tidelands to municipalities. For example, the state in the late 19th century terminated San Francisco's right to administer its waterfront lands in response to charges of corruption and administered the Port of San Francisco for many years. In 1968, however, it regranted the state-owned tidelands comprising the port to the city in trust under the Burton Act. Many other cities also administer the tidelands within their city limits pursuant to trust grants from the state. However, grants of tidelands to municipalities do not free the lands from the trust; indeed, the restrictions contained in trust grants such as the Burton Act are usually more restrictive than the common law trust.
Furthermore, the courts have held that the organic law of the San Francisco Bay Conservation and Development Commission (BCDC), the McAteer-Petris Act, also constitutes an exercise of the public trust. Therefore, all unfilled tidelands within BCDC jurisdiction are subject to the limitations of that law regardless of the provisions of any applicable trust grant, and, in the case of privately owned tidelands, even if the restrictions in the McAteer-Petris Act might be applied by BCDC in a manner that would otherwise be considered a "taking" under the Fifth Amendment to the Constitution. The reason is that the ownership of such tidelands does not carry with it the right to use them in a manner that is inconsistent with the public trust.
As a result, trust lands, public or private, filled or not, can be devoted only to a limited array of uses. Unfortunately, because the trust is a creature primarily of the common law, which is made case-by-case by common law judges, there is no zoning code or general statute to which one can resort for a list of permitted trust uses. Instead, in addition to the decided cases, the trust grants themselves define permitted uses of the granted tidelands and trustees have some latitude in interpreting their trust grants. Both the Attorney General of the state of California and the California State Lands Commission, however, exercise both formal and informal oversight over the local administration of trust grants, and they will intervene if they believe trust lands or the revenues from trust lands are being used for purposes inconsistent with the trust or a trust grant. As noted above, the limitations in the BCDC law provide still another set of restrictions on the use of lands subject to the trust within BCDC's jurisdiction.
A detailed analysis of the interplay of these various agencies and entities on the administration of the trust and the determination of trust uses is beyond the scope of this article. Suffice it to say that within BCDC's "Bay" jurisdiction, i. e., the tidelands in San Francisco Bay which remain below the mean high tide line, BCDC usually has the last word. Therefore, the use of those tidelands is limited to the "water-oriented uses" identified in the McAteer-Petris Act and BCDC's San Francisco Bay Plan. As to lands above the mean high tide line that remain subject to the trust, where BCDC's jurisdiction is more limited or non-existent, the array of uses is determined by the terms of trust grant, if one exists, as interpreted by the local trustee, and by the courts, the Attorney General and the State Lands Commission. As a general proposition, traditional maritime uses such as piers, wharves, warehouses, and other facilities that directly promote or are related to navigation, maritime commerce, or fishing are permissible trust uses. On the other hand, neither housing nor general office use are considered trust uses by the entities involved in the administration of the trust because they are viewed as "privatizing" trust lands with no corresponding trust benefit such as the promotion of maritime commerce or public use and enjoyment of shoreline areas. Conversely, hotels and restaurants are considered to be trust uses, even though they may be privately owned and operated, because they draw large numbers of people to the shoreline and provide facilities for them to enjoy the shoreline once they are there. The Attorney General and the State Lands Commission have also determined that "time-share" resorts can be considered a trust use because they function more like hotels than residential developments. Both have also concluded (without defining the term) that "maritime-oriented offices" can be considered a trust use because of the nexus to maritime commerce.
These limitations have proven problematical for development along the San Francisco waterfront. As noted earlier, it is virtually impossible in California to use or develop trust lands for housing or general office use. Furthermore, while some development of tidelands subject to the trust consistent with the existing BCDC restrictions has occurred in San Francisco (such as at Pier 39), the array of deteriorating piers along the northern waterfront is mute testimony to decades of maritime decline and an inability to reconcile conflicting views of the trust with modern economic realities. For example, misguided Port proposals for major office development on pile-supported fill were rejected by BCDC and the San Francisco Board of Supervisors in the early 1970s. But then in November, 1990, the voters of San Francisco also passed Proposition H, which prohibited the construction of hotels along the waterfront. This eliminated one of the few trust uses other than Pier 39-type projects which could meet the very restrictive BCDC criteria for development on fill along the San Francisco waterfront and still generate revenue for the Port.
Therefore, proposals to develop areas subject to the trust along the San Francisco waterfront, which includes all the lands under the jurisdiction of the port and much of the street grid south of China Basin channel, are doomed to failure unless the existence of the trust is given full and careful consideration. One recent project, the rehabilitation of Pier 1 by AMB Realty Corporation, successfully navigated these shoals by making the rehabilitation of a nationally designated historic landmark building the central focus of its project. The port, BCDC, the State Lands Commission, and the Attorney General all agreed that even though the project included general office use, it could be permitted because the project as a whole significantly furthered trust purposes. These purposes included the preservation of a designated landmark building with significant maritime historical importance; the provision of extensive additional public benefits in the form of generous public access to both the shoreline and the historic features of the building; and the contribution of the project to a larger public program for redevelopment of an important waterfront area (the Ferry Building area) for trust purposes. It is likely that the renovation of the Ferry Building by Wilson Cornerstone will be approved under the same rationale. Pacific Bell Park was deemed to be consistent with the trust because the facility itself would attract large numbers of people to use and enjoy the shoreline.
The Mission Bay project, on the other hand, took a different approach. Relying on California court decisions that permit termination of the trust in very limited circumstances involving exchanges of tidelands subject to the trust for lands of equal or greater value, and on a provision of the California constitution that, with the approval of the Legislature, permits the sale of streets subject to the trust, Catellus Development Corporation entered into a complex set of land transfers with the City, the Port, and the University of California. These were approved by the State Lands Commission pursuant to specific statutory authorization and, to the extent necessary, by BCDC as well. The result was a complete reconfiguration of the trust-encumbered, "paper" street grid within the Mission Bay project area created in the 19th century by the State Board of Tideland Commissioners. This permitted the Mission Bay project, including a new campus for the University of California at San Francisco, to go forward while at the same time imposing the trust on new areas that were far more valuable and useful for modern trust purposes than the areas over which the trust was terminated.
Nevertheless, significant impediments to desirable development along the San Francisco waterfront remain. Fundamental and potentially fatal inconsistencies remain between the Proposition H Waterfront Plan and BCDC's San Francisco Waterfront Special Area Plan, notwithstanding completion (after seven years) of the waterfront planning process mandated by Proposition H, the approval of the Pier 1 project, the likely approval of the Ferry Building renovation, the groundbreaking at Mission Bay, and the issuance of multiple requests for development proposals by the port's development staff. Unless these differences are resolved, most of the development for which the Port has sought proposals will not occur. Negotiations between BCDC staff and port staff have been underway to reconcile the two plans for several years, and the BCDC staff has even prepared a draft amended Special Area Plan, an effort that was funded by the Port in a generous good faith gesture. However, the two groups still appear to be far apart on critical issues, even though both have promised their parent bodies to present final recommendations by the end of the year. If this is to occur, considerable good will and an enormous effort on both sides will be required over the next two months.
Similarly, any proposal to develop portions of the central waterfront for housing or other non-trust uses will have to build on the Mission Bay precedent. However desirable the development of additional housing and/or other non-trust uses on trust lands in the central waterfront may appear to be, neither the State Lands Commission, nor BCDC, nor the Attorney General, nor the courts are likely to allow it to occur. Thus, any plan for such development must include a program for land exchanges or mechanisms for termination of the trust that can survive the very strict judicial and administrative scrutiny any such program will receive.
Conceived in antiquity, refined by the common law, and revived and expanded by modern court decisions, the public trust continues to serve the public well. For centuries, it has required us to carefully and continuously evaluate, and to protect, the public interest in those fragile and limited areas where the sea meets the shore. We face the same responsibilities today, and the public interest is no less compelling and the decisions no less difficult.