A dispute over water rights is threatening to shut down development around Lake Arrowhead in San Bernardino County.

In August, the state Water Resources Control Board ruled that the Lake Arrowhead Community Services District does not have the right take water from the lake, which has been the district’s primary source since 1978. The water board also fined the district $182,000 and has ordered the district to submit a plan for replacement water sources by October. The district has appealed the decision, but, in the meantime, has stopped selling new water meters.

Two years ago, local resident Ted Heyck filed a complaint with the state board, contending that the water district never applied to the state for the right to take water from the reservoir. Heyck has since been elected to the community service district’s board. He says the district should pursue other water sources.

Other district officials say they have been doing just that during the last two years — drilling new wells, reviewing water recycling options and signing 15-year contracts with two nearby districts that have access to the State Water Project.

Still, the 8,000-customer Lake Arrowhead district argues it owns water rights established prior to 1914, when the state first began regulating water use. The district says a previous utility transferred the rights to the district.

The state board, however, determined that those rights are only for recreational use of the reservoir, and not for residential consumption.

In a stunning turn, a U.S. District Court judge has ordered two lawyers who filed a racketeering lawsuit against environmentalists and federal employees to pay $267,000 in sanctions. The order from District Court Judge Manuel Real came in a case that has been remarkable from its outset.

In November 2004, developer Irving Okovita filed a Racketeer Influenced and Corrupt Organization (RICO) lawsuit against three U.S. Forest Service employees and the leader of an environmental group. Okovita wants to develop a 12.5-acre project with 133 condominiums and 175 boat slips in the unincorporated town of Fawnskin, on the north shore of Big Bear Lake. He received San Bernardino County approval for the project, but a federal judge in May 2004 halted construction because of potential harm to bald eagles, an endangered species.

Okovita’s lawsuit claimed that Sandy Steers, who heads Friends of Fawnskin, Scott and Robin Eliason, a couple who are USFS biologists and members of Friends of Fawnskin, and USFS Supervisor Gene Zimmerman conspired to halt the real estate development. The lawsuit accused the federal employees of abusing their office for personal gain and to lower the value of Okovita’s property so the Forest Service could purchase it. The lawsuit claimed all four overstated the value of the 12.5 acres as eagle habitat.

A number of entities intervened on behalf of the defendants, including the state attorney general’s office, which called Okovita’s lawsuit a strategic lawsuit against public participation (SLAPP). The federal Department of Justice got the federal government substituted as the lead defendant. Early this year, Judge Real threw out the lawsuit.

In August, Real ordered attorneys Wayne Rosenbaum and Susanne Washington of Foley & Lardner — not Okovita — to pay $267,000 in sanctions for filing a frivolous racketeering lawsuit. Because winning attorneys had sought only $175,000, many people believe Real was trying to make a point about meritless lawsuits. Foley & Lardner has vowed to appeal.

The case is Marina Point Development Associates, v. Eliason, EDCV04-1387.

Thousands of City of San Jose employees began moving into the new, Richard Meier-designed city hall during August.

Similar to many major civic center projects, the San Jose city hall project had to overcome litigation and political opposition. The San Jose project took two years longer than expected to complete, and its final $382 million cost was approximately 80% more than originally estimated. Nevertheless, the 18-story glass and anodized aluminum structure has drawn mostly positive reviews. Maybe the most remarkable part of the 550,000-square-foot facility is a 10-story-tall, freestanding glass dome in the public plaza.

The new city hall on East Santa Clara Street also brings the municipal government back to downtown from a more suburban site on North First Street and from a variety of leased spaces spread around town (see CP&DR Public Development, June 1999).

The validity of a subdivision map recorded in 1907 has been upheld by a Monterey County Superior Court judge. The decision appears to permit development of a 73-lot housing subdivision on 16 acres of farmland in the unincorporated town of Spreckels.

In January 1907, the Monterey County Board of Supervisors approved the “Official Map of Spreckels,” which shows the disputed subdivision. Judge Kay Kingsley ruled that because the map was recorded in compliance with the version of the Subdivision Map Act in effect at the time, the map was valid.

Spreckels was originally a company town built for workers at the Spreckels Sugar Company, which closed in 1982. Located about four miles south of Salinas, the 185-home town is a designated historic district and was the location where the movie “East of Eden” was filmed.

After county supervisors last year voted to recognize the 73-acre subdivision, Spreckels residents and LandWatch Monterey County sued. They argued that because the county in 1907 had no discretion over the map, the document did not create legal parcels.

The validity of antiquated maps has long been a question in California. Two years ago, the state Supreme Court ruled that maps created before 1893, when the first predecessor of the Subdivision Map Act was adopted, do not create valid subdivisions for today’s purposes (Gardner v. County of Sonoma, 29 Cal.4th 990; see CP&DR, March 2003). The Gardner decision also appeared to call into question the validity of maps created between 1893 and 1929, the year when local governments received specific authority to decide on a subdivision map’s design and improvements.

An appeal is likely in the Spreckels case. In the meantime, the property owner, the Tanimura family, intends to start grading the site.

The California High-Speed Rail Authority has released the final program environmental impact report for the proposed 700-mile-long rail system. The document pegs the cost of building the entire system at “over $33 billion” in 2003 dollars. However, an alternative that involves building more highway lanes, and additional airport runways and gates, would cost more than $82 billion and have greater environmental impacts, according to the report.

The EIR, which serves as an environmental impact statement for federal purposes, deferred some difficult issues — such as selecting route alignments between the San Joaquin Valley and the Bay Area, and between Burbank and Los Angeles Union Station.

The study says the high-speed rail line could carry up to 68 million passengers by 2020. However, no money has ever been budgeted for construction, and a statewide bond is unlikely to appear on the ballot before 2008.

The Authority and the Federal Railroad Administration are scheduled to certify the environmental study this fall. The next step in the project would be preparation of a study to determine the best route over the mountains separating the Central Valley from the Bay Area.

Litigation over the 14,000-unit Rancho Mission Viejo housing project in southern Orange County has been settled. Environmental organizations agreed to drop their lawsuit in exchange for developer Rancho Mission Viejo’s concession to shrink development envelopes and permanently protect 17,000 acres of habitat and farmland.

Nearly one year ago, the Orange County Board of Supervisors approved the Rancho Mission Viejo project (see CP&DR Local Watch, January 2005). The project called for 14,000 housing units, mostly single-family homes, and three large mixed-use centers that would provide thousands of jobs. The project was designed with development “pods” totaling about 8,000 acres spread across the 23,000-acre ranch.

At the time, environmentalists complained about the spread-out nature of the development and the lack of protection for undeveloped areas. Conservation groups, including the Endangered Habitats League, the Sierra Club and the Natural Resources Defense Council, sued over a number of project aspects.

Under the agreement signed in August, the total amount of development will not change. Rather, it will be contained in a tighter area of about 6,000 acres. The remaining 17,000 acres will be protected as habitat or farmland. The developer, Rancho Mission Viejo, now must amend details of the plan approved in 2004. Meanwhile, federal and state wildlife officials are working on plans for a nature reserve.