The City of Desert Hot Springs filed Chapter 9 bankruptcy papers in late December, making it the first California city in at least 25 years to seek bankruptcy protection. City officials said that the city has $8 million in debts it cannot pay, and that the bankruptcy plan was necessary to protect citizens. A major part of the debt is approximately $6 million owed to developers and their attorneys who won a Fair Housing Act suit against the city (see CP&DR Legal Digest, July 2001).

Last year, the Ninth U.S. Circuit Court of Appeals ruled that the city illegally blocked the development of a low-income mobile home park, and the court upheld a jury's $3 million award to the developers, Silver Sage Partners, Ltd. Including interest and attorneys' fees, that amount has ballooned to about $6 million. The city never paid and Silver Sage was in the process of seizing city assets. Desert Hot Springs, a city of 17,000 about 10 miles north of Palm Springs, has struggled financially for years. City officials say the Ninth Circuit ruling put the city over the edge. But Silver Sage attorneys immediately accused the city of bad faith. "They're a deadbeat city," attorney William Davis told The Desert Sun. "It's another tactic, one in a long line." In the first test of a subsequent vote requirement for large projects in Newport Beach, voters soundly rejected a proposed 10-story, 250,000-square-foot office building at the Koll Center office park. During a special election in late November, 59.5% of voters said no to Measure G. One year earlier, Newport Beach voters approved the Greenlight Initiative, which requires the electorate to decide most projects that require general plan amendments, such as the proposed office building. The estimated 2,700 vehicle trips that the new office tower would have generated appeared to be a major factor, as the nearby intersection of Jamboree Road and MacArthur Boulevard is already very busy.

A Sacramento County Superior Court judge has ordered a ban on all development on 600 acres in the City of Folsom because the city has failed to approve any low-income housing in recent years. Judge Lloyd Connelly essentially set aside the 600 acres as a reserve for affordable housing projects after ruling earlier that Folsom had violated state housing law because none of the 7,000 housing units approved by the city during the past 10 years were for low- or moderate-income people. Connelly acted in a lawsuit filed by Legal Services of Northern California. The nonprofit organization had signed an agreement with the city last year that called for the city to pursue 650 affordable units within four years. But the agreement quickly fell apart. Legal Services praised Connelly's November ruling. City officials said they would expedite preparation of a revised housing element so that they could minimize the length of time Connelly's order is in effect. The U.S. Army Corps of Engineers has rejected as incomplete an application from University of California, Merced, to fill seasonal wetlands on about 1,350 acres where the new school is planned. In early December, the Corps said it could not decide on the permit � required under Section 404 of the Clean Water Act � until UC provided a great deal more information. The federal agency requested an explanation of the need for a 910-acre campus and 340-acre development reserve, an analysis of indirect water impacts, a cultural resources survey of the site, information on the endangered San Joaquin kit fox, and other information. University officials downplayed the importance of the Corps' demands, but federal regulators suggested the situation could slow the approval process. The new UC campus and an adjoining community are planned for about 3,000 acres of farmland and a golf course a few miles east of Merced. Seasonal puddles known as vernal pools, which support endangered fairy shrimp, have been a major environmental obstacle to the project, and planners have already shifted the site of the proposed campus and new town away from the largest collection of vernal pools (see CP&DR, April 2001, June 1999).

University officials insist they will have classrooms open by fall of 2004. A loophole that would have weakened environmental regulations for new power plants that run during times of peak demand was closed in December by the California Energy Commission. In October, the panel had voted 3-2 to allow "peaker" plants to operate for up to 30 years using a single-cycle generating process, even though the hastily-built plants were originally approved on the condition that they convert to a cleaner combined-cycle process by 2003. The commission also decided to allow large, permanent power plants to use an expedited permitting process if developers applied by December 19. But faced with sharp questions from some state lawmakers, including State Sen. Debra Bowen (D-Marina del Rey), chairwoman of the Senate Energy, Utilities and Communications Committee, and environmental groups led by the Planning and Conservation League, the commission unanimously reversed itself less than two months later. The Nature Conservancy has used a $35 million government grant to purchase a 9,200-acre island a few miles east of Rio Vista. Under a grant from the Cal-Fed Bay Delta project, the Nature Conservancy can continue to operate a for-profit farm on Staten Island.

Nature Conservancy representatives said they intend to run a demonstration farm that shows how wildlife and a commercial agricultural operation can live in harmony. Cal-Fed officials said the project has multiple benefits for the delta. However, other environmentalists questioned the entire arrangement. There will be almost no public access to the land, and the Nature Conservancy can make a profit from farming property purchased with public money, they complained. Developers of a proposed 1,500-home subdivision in Tuolumne County have backed away from the project after opponents qualified a referendum for the March ballot (see CP&DR Local Watch, October 2001).

At the request of Tuolumne Investors, the Board of Supervisors rescinded its approval of a general plan amendment, rezoning and a development agreement in December. Backers of the Mountain Springs project said they would design a new project for the 1,100-acre site near Sonora. U.S. Forest Service Chief Dale Bosworth has affirmed the Sierra Nevada Framework, a comprehensive plan for managing 11 national forests covering 11.5 million square miles of the mountain range. However, Bosworth did ask USFS foresters in California to consider ways to reduce the risk of fire, reevaluate the Framework based on the latest National Fire Plan, and find ways to synchronize the Framework with an earlier act of Congress calling for more of a multi-use approach to forests. The Sierra Nevada Framework now goes to Undersecretary for Natural Resources and Environment Mark Rey because Agriculture Secretary Ann Veneman recused herself. Under the lengthy management plan, loggers would be limited to cutting only small trees, and both loggers and ranchers would have to curtail activity in riparian areas (see CP&DR Environment Watch,March 2001).

In general, environmentalists endorsed the plan, and natural resources companies condemned it. Mountain View mayor Mario Ambra has pleaded not guilty to charges that he abused his role by pressuring city officials to reject development proposals. Ambra has claimed that charges filed by Santa Clara County prosecutors are politically motivated and that he has done nothing wrong. The district attorney's office filed the charges in November after a civil grand jury completed a five-month investigation. Prosecutors say Ambra pressured planners to reject development applications for properties adjacent to land he owns on North Rengstorff Avenue. Prosecutors also allege the mayor urged code enforcement officers to step up efforts against another property owner. Ambra allegedly wanted to purchase and develop all of the properties himself. A new "Regional Transit Vision" prepared by the San Diego Association of Governments calls for integrating public transit into land use decision-making.

Although the San Diego region has some successful transit programs, less than 5% of commuters rely on public transit, according to the SANDAG report. "The Regional Transit Vision integrates transit into many of our communities and neighborhoods," the document states. "It relies on local jurisdictions supporting transit-oriented developments that become the central activity areas around which housing, jobs, shopping and recreational opportunities are plentiful." The plan makes a number of financing and planning recommendations for transit agencies, cities, the county and SANDAG itself.

The Regional Transit Vision is available in the publications section of the SANDAG website,

Correction: The Local Watch story in the December edition of CP&DR incorrectly characterized one statement from City of Industry Mayor David Perez. He said that the city's proposed reservoir in Tonner Canyon would not conflict with a wildlife corridor.