Chapter 4. Can the Waterfront be More than a Port?
The junction of land, sea and air
transportation on our Waterfront gives Oakland a powerful competitive
edge in economic development, but legal restrictions upon the use of
tidelands and a lack of coordination between the Port and the City of
Oakland may prevent us from realizing the Waterfront's full potential.
This chapter explores the evolution of Port
transportation facilities and the institutional problems which are
impeding development of the Waterfront.
The Waterfront as a Public Trust
In 1892 the United States Supreme Court bestowed a
special legal status upon tideland areas, in the case of Illinois
Central R.R. v. Illinois:
"[T]he State holds title to soils under
tidewater by common law. . . . But it is a title different in
character from that which the State holds in lands intended for
sale. . . It is a title held in trust for the people of the State
that they may enjoy the navigation of the waters, carry on commerce
over them, and have liberty of fishing therein freed from the
obstruction or interference of private parties."
The public trust doctrine restricts the use and
ownership of tidelands in California. As the California Supreme Court
declared in a 1929 case (City of Oakland v. Williams}, the use of
tidelands ". . . must have some relation to and connection with, or be
promotive of, the accomplishment of the main purpose, to wit, and
development of improvement and up building of a harbor. . ."
These cases, along with the State Tidelands Act,
define the scope of the public trust doctrine. Recent changes in the law
recognize that the public's interest also includes water-related
recreation and conservation.
Beginning shortly after Oakland was incorporated,
the State of California passed the tidelands to the City in about twenty
separate grants. These lands must be operated under the public trust
doctrine and in conformance with the terms of each original grant.
Today more than five thousand acres in Oakland are
subject to this public trust doctrine, as administered by the Port of
Oakland. This includes the shoreline, filled tidelands and vast dry land
areas that were acquired with funds from wharf and other
revenue-producing uses of the tidelands. Some parts of this area extend
more than a mile inland from the water. Nearly all of Hegenberger Road,
the land west of Highway 880 and more than two thousand acres of West
Oakland are within Port jurisdiction.
Establishment of the Port of Oakland
In 1854 Oakland was incorporated and Horace W.
Carpentier became its first mayor. At that time Carpentier was operating
a ferry to San Francisco and a bridge across Lake Merritt. Within
thirteen days after becoming mayor, Carpentier was granted "exclusive"
use of the waterfront for thirty years. In return he pledged to pay the
city five dollars plus two percent of wharfage fees. Citizens rebelled
and expelled Carpentier from office in 1855. Under a new mayor the grant
was repealed, provoking a lengthy court battle.
In 1868, when Oakland was being considered as the
Western terminus for a transcontinental railway, the dispute was settled
by Carpentier agreeing to deed his rights to the Oakland Waterfront
Company. Only later was it discovered that Carpentier was president of
the Oakland Waterfront Company. It was not until 1907 that the courts
finally determined city ownership of the waterfront, ending the
fifty-five year reign of Carpentier and the Central Pacific Railroad.
At a special election in December 1926, city voters
enacted a Charter amendment transferring administration of the tidelands
to the Port of Oakland, a new semi-autonomous agency governed by a Board
of Port Commissioners. The Charter amendment granted the Port II . . .
the complete and exclusive power. . .to do certain things, including
take charge of and control the tidelands. . . granted to the City in
trust by the State of California for the promotion and accommodation of
commerce and navigation."
Evolution of the Waterfront
In 1909 voters approved a $2.5 million bond issue to
build the first concrete pier on the West Coast. In 1925 voters approved
another $9.6 million in general obligation bonds for major harbor
improvements. During the next decade new terminals were also built at
Grove Street, Fourteenth Street, and Ninth Avenue.
In 1941 the Army and Navy took control of the Outer
Harbor and more than four hundred acres of land for a military supply
base serving the Pacific basin. The Naval Supply Depot and the Oakland
Army Base remain in operation today, although the Port is considering
converting part of the Naval Supply Depot to Port use.
In 1962 the Port embraced the new concept of
containerization in intermoda1 transportation. By constructing container
facilities ahead of other West Coast ports, cargo volumes grew rapidly
and the Port of Oakland assumed a leading position in world trade. The
Port now handles ninety percent of the container traffic in San
Francisco Bay and is the fifth largest container port in the United
An airport was first established on the Waterfront
in 1927, dedicated by Charles Lindbergh only twenty-nine days after he
completed his historic solo flight across the Atlantic Ocean. In 1955
the voters approved a bond issue for construction of the Oakland
International Airport. The former airport, North Field, remains in
operation as a general aviation facility.
Oakland International Airport is now among the
fastest growing airports in the nation<11, having served more than six
million passengers last year. It is also the fifth largest air cargo
facility in the nation.
Aviation operations have attracted subsidiary
enterprises that provide a large number of jobs in Oakland. These
include the United Airlines maintenance facility, (2,000 employees),
Federal Express distribution center (375 employees), Alaska Airlines'
maintenance facility (250 employees), National Airmotive Corporation
(400 employees) and many service jobs in the restaurants and hotels
along Hegenberger Road.
The Port is also responsible for development of any
land that is not needed for aviation or maritime facilities. This
includes commercial developments at Jack London Square, Embarcadero Cove
and the Airport Business Park and Distribution Center.
In all, airports and marine terminal facilities
occupy 3,218 acres of the Waterfront, commercial real estate comprises
another 462. 7 acres and 185 acres remain undeveloped. In 1991, Port
revenue totaled $103 million, of which 51.5% was derived from aviation
operations, 40.2% from maritime facilities and 8.3% from commercial
An Economic Development Void?
As the next chapter will discuss, transportation
facilities on the Waterfront account for only a small portion of the
jobs derived from Port operations. By far the greatest number of jobs
are created by industries which rely upon the transportation facilities.
For example, the Federal Express and the airline maintenance facilities
employ substantially more people than the airport itself.
Therefore, in order to tap the full potential of the
Waterfront, it is important to mount an economic development strategy
aimed at attracting and retaining employers that rely upon the
transportation facilities of the Port. However, two factors - both
arising from the application of the tidelands trust -- confound economic
development of Oakland's Waterfront.
The Responsibility Vacuum:
Traditionally, the Port of Oakland has focused
its efforts narrowly on developing transportation facilities, rather
than on the broader goal of economic development. The City of
Oakland bears primary responsibility for the city's economic
development strategic planning. However, the City concentrates its
efforts on property outside the Waterfront. Consequently, although
superior transportation is commonly viewed as one of Oakland
strongest competitive advantages, there is little coordination
between the Port and City in tapping this strength. There is also
little concentrates in planning other uses of the Waterfront, such
as housing and recreation.
The Incentive Void:
The tideland trust also alters the incentives
for developing the Waterfront. Land operated by the Port is exempt
from real estate taxes and is not. encumbered with debt (although
aviation and maritime facilities, such as terminals and cargo
cranes, are encumbered by debt incurred in their construction). Nor
are Port facilities required to produce a return on investment, as
would be required of private investments in land or capital. In a
free market system, debt service, land taxes and rate of return
impose financial pressures which compel owners to place the land in
the most beneficial use. Lacking such incentives, large tracts of
Port land remain undeveloped or underutilized.
The existence of the tidelands trust and the clear
definition of the Port of Oakland's mission has produced one of the
finest intermodal transportation facilities in the world. Ironically,
the very nature of this public trust and its single-minded pursuit by
the Port may have prevented Oakland from realizing the full potential of
a Waterfront city.
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