Construction of a sewage plant in the unincorporated San Luis Obispo County community of Los Osos has been halted following the successful recall of three elected officials who supported the plant.

During a September 27 special election, voters in the Los Osos Community Services District (CSD) recalled Directors Stan Gustafson, Gordon Hensley and Richard LeGros, and replaced them with Chuck Cesena, John Fouche and Steve Senet. The ousted directors had approved a large sewer plant that is — rather, was — under construction in the center of town. The new directors and two directors who were not recalled oppose the project. Voters also approved a ballot measure blocking the project.

The reconstituted CSD board halted construction and dismissed the agency’s general manager, attorney and public information officer. Board members have indicated they would pursue a different type of treatment plant to be built outside of town. Indirectly, the board has picked a fight with state agencies that have been working for years on water quality improvements

State regulators have insisted since the 1970s that Los Osos needs a wastewater treatment facility. The town of 14,000 people relies on 6,000 individual septic systems, which regulators blame for polluting the groundwater and Morro Bay estuary. A state-imposed building moratorium has been in place since 1988.

After years of debate and planning, the state Coastal Commission approved a development permit for the treatment plant in 2004. Construction on the $150 million collection system and treatment plant began earlier this year. The Water Resources Control Board provided a $135 million low-interest loan for the work.

Since the new CSD board changed directions, the water board has demanded repayment of $6.5 million, and is withholding another $6.4 million, arguing that the district broke an agreement when it stopped construction. The Central Coast Regional Water Quality Control Board is pursuing $10,000-per-day fines that it has held in abeyance for years.

After several tense weeks, Assemblyman Sam Blakeslee (R-San Luis Obispo) began mediating negotiations between CSD representatives and state officials in late October.

In what might be the most expensive hotel deal in history, the Los Angeles City Council has agreed to provide up to $290 million in subsidies for a 1,100-room Hilton Hotel next to the downtown convention center.

Under the deal approved September 30, the city will rebate a minimum of $246 million in transient occupancy taxes (TOT) that the hotel would generate over 25 years. If the hotel generates more than that amount in TOT, the city and hotel would evenly split the next $48 million. Additionally, the city will rebate $4 million worth of building permit fees and the L.A. Community Redevelopment Agency will provide a low-cost, $16 million loan.

The hotel is part of a larger entertainment and residential project being pursued just north of the convention center and Staples Center by developer Anschutz Entertainment Group (AEG). Development began in September on parts of the project, which is planned to contain a 7,000-seat performing arts center, a 14-screen movie theater, numerous restaurants and nightclubs, offices, broadcast facilities, condominiums and, of course, a 55-story Hilton. AEG reportedly is selling the hotel site at a discount to developers Wolff Urban Management and Apollo Real Estate Advisors.

The city-owned convention center has been a money pit forever, draining as much as $20 million annually from the city’s general fund. Council members said the hotel would revitalize both the convention center and downtown.

Operators of existing downtown hotels lobbied against the Hilton’s subsidy and have vowed to block the deal in court or via a ballot measure.

An Oregon judge has thrown out a property rights initiative approved last year by state voters. In a decision that is definitely not the final word on the matter, Marion County Circuit Judge Mary James ruled that Measure 37 violated the federal and State of Oregon constitutions, and impermissibly prohibited the Legislature from exercising its police powers.

More than 60% of Oregon voters backed the initiative, which requires compensation to property owners for regulations adopted after the owner acquires property. Judge James ruled that the initiative treated property owners differently based upon when they acquired their property, which violated equal protection rights and the state constitution. She also ruled the initiative violated the separation of powers doctrine and intruded on legislative authority.

A similar property rights initiative that Oregon voters approved in 2000 also was struck down in state court, but on the mostly technical ground that the initiative covered too many subjects. James’s ruling went to the merits of the measure.

Property rights advocates with the group Oregonians in Action said they would continue to press on in court, and would pursue another initiative if necessary.

The case is MacPherson v. Department of Administrative Services, Risk Management Division, Marion County Circuit Court No. 05C10444.

State Housing and Community Development (HCD) Director Lucetta Dunn has resigned after little more than a year on the job. Dunn, an attorney who has worked in the Orange County development industry for many years, resigned effective October 31 to become president and chief executive officer of the Orange County Business Council. There was no immediate word on a replacement at HCD.

Litigation over the siting of the Transbay Terminal in San Francisco has apparently been settled with the San Francisco Board of Supervisors’ decision in October to pay developer Jack Myers $58 million.

The Transbay Joint Powers Authority acquired Myers’s property on Natoma Street via eminent domain after Myers had begun work on a 432-unit condominium project. The government valued the property at $32 million, a price Myers rejected. The city’s transportation authority and the Metropolitan Transportation Commission will fund the $58 million purchase.

The $2 billion Transbay Terminal is planned to provide a central station for numerous forms of public transit near San Francisco’s Financial District (see CP&DR Public Development, August 2004).

A controversial Marin County quarry will be the subject of a $1 million environmental impact report. In October, the Board of Supervisors awarded the EIR — worth up to $998,840 — for the San Rafael Rock Quarry project to ESA.

The quarry has been in operation for more than 100 years, but it has became a source of neighborhood and county complaints and litigation during recent years (see CP&DR Legal Digest, April 2004).

The environmental study, to be funded by quarry owner the Dutra Group, will examine a new reclamation plan for the 276-acre property.

NASA Ames Research Center near Mountain View and internet powerhouse Google have announced an agreement under which Google would develop a 1-million-square-foot research facility on the federal installation.

The project would permit public and private scientists and engineers to collaborate in a number of areas, including biotechnology and nanotechnology. As many as 4,000 people could work at the facility. Under the agreement, Google is responsible for all development costs, including infrastructure construction.

Residents of a 495-acre island of unincorporated Orange County have blocked the City of Anaheim’s annexation bid. A group called West Islands Neighbors submitted 1,944 signatures — a little more than 50% of registered voters — on petitions against the annexation. That was enough to kill the annexation without an election, a rare occurrence under current law.

City and county officials said annexation of the La Colonia, Sherwood Forest and Thistle neighborhoods made sense because the city could provide better public services. Opponents said they doubted service levels would increase and said they feared the city would crack down on code violations, such as the keeping of livestock and vehicle storage.