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.