Funds granted pursuant to Section 5907 may be expended for
development, rehabilitation, or restoration only on lands owned by,
or subject to a lease or other interest, held by the applicant city,
county, city and county, district, or nonprofit organization. If
those lands are not owned by the applicant, the applicant shall first
demonstrate to the satisfaction of the administering agency that the
project will provide public benefits commensurate with the type and
duration of interest in land held by the applicant.