Grant funds may be expended for development, rehabilitation, or restoration only on lands owned by, or subject to a lease or other long-term interest held by, the applicant. If the lands are not owned by the applicant, the applicant shall first demonstrate to the satisfaction of the director that the development, rehabilitation, or restoration will provide benefits commensurate with the type and duration of interest in land held by the applicant. No grant funds may be expended for any purpose that is not directly related to the operation and management of parks and recreational areas and facilities.