In a landmark ruling, the state Supreme Court has made clear that maps recorded prior to 1893 do not create legal, developable lots for today's purposes. And the court at least hinted that maps recorded between 1893 and 1929 might not be valid unless a city or county somehow exercised discretion in approving the map. The decision was a major victory for planners and government regulators, who have contended for years that "paper lots" should not be recognized because they were recorded with few or no standards for development, or for the provision of roads and utilities. On the losing end of Gardner v. County of Sonoma were property owners and real estate speculators. During the last few decades, they have sought certificates of compliance based on old maps so that they could build in areas where current regulations tightly control or even prohibit development. (For details of the case, see Legal Digest .) "It has answered the question resoundingly in favor of the counties and in favor of the orderly development of the state," said Alan Seltzer, Santa Barbara County assistant county counsel and an authority on antiquated subdivisions. Pacific Legal Foundation attorney James Burling, who helped argue the property owner's case at the state Supreme Court, called the ruling a "clear loss" for people who own property with a map recorded prior to 1893, when the first precursor to the Subdivision Map Act was passed. According to the court's ruling, what landowners believed were separate parcels, are not, he said. "It's going to make development of these properties more difficult," Burling predicted. Widespread impact Nobody knows for sure how many paper lots exist. The estimate most often cited was prepared during the early 1980s for the state Senate and the Coastal Conservancy. That study identified more than 1 million lots — including 70,000 in San Luis Obispo County alone. However, the survey included lots in subdivisions that had been only partially built and for subdivisions approved as recently as the 1950s if there were few or no provisions for infrastructure, recalled Madelyn Glickfeld, the study's author and now an assistant secretary of the state Resources Agency. Most of the parcels identified were created during the 20th century, she said. Daniel Curtin Jr., author of Curtin's California Land Use and Planning Law , said, "There are hundreds of thousands of these lots out there, and more of them are being discovered in ‘areas that need to be developed.'" Curtin, who helped argue the government's case at the state Supreme Court, said that planners often believe the issue is not a problem in their jurisdiction — until a landowner shows up at the counter one day with a crinkled map. "These lots exist in almost every corner of the state," said Peter Detwiler, a consultant to the Senate Local Government Committee. "They are a nightmare to planners. But another way to look at it is that equity is locked up because common sense tells you that the lots are too small to ever use." In fact, many of the paper lots are only 25-feet-square, or 25-feet-by-50-feet, and they are arranged in a grid without any place for roads. Speculators have used a "land use alchemy" that involves combining the paper lots and moving lot lines around to fashion parcels that are saleable today, Detwiler said. Two years ago, lawmakers approved SB 497 (Sher) to halt the practice of "serial lot line adjustments," which landowners used to create buildable lots or to move lots to more desirable locations within a larger holding. Developers had argued that as long as the number of lots did not change, they could move the lines wherever they wanted. The high-profile example when SB 497 was being considered in 2001 was at the Hearst Ranch in San Luis Obispo County. The landowner had discovered a 19th century map with about 200 lots in the backcountry of the 80,000-acre ranch. Hearst indicated it would seek certificates of compliance for the parcels, and then use the lot line adjustment process to move the parcels to the coast. Environmentalists contend this approach can harm rural and environmental integrity. Portions of Santa Barbara County's Gaviota Coast and Santa Ynez Valley are blanketed by old maps, said Linda Krop, executive director of the Environmental Defense Center, which advocates in San Luis Obispo, Santa Barbara and Ventura counties. "In all three of our counties, landowners have been searching for old maps and surveys and whatever documents they can find that show parcels, even if the parcels don't comply with local zoning," said Krop, who was pleased with the Supreme Court's ruling. During hearings on SB 497 in 2001, lawmakers heard that some counties, including Sonoma and San Luis Obispo, were seeing as many new lots created through certificates of compliance as through fresh land divisions under the Subdivision Map Act. Many of the maps in question were from the early 20th century. The state Supreme Court did not directly address the validity of those maps. Still, some municipal attorneys contended the court strongly hinted that maps from 1893 to 1929 might not create legal lots. Other attorneys said the court specifically avoided ruling on post-1893 maps. Those dates are important because 1893 was the year the first precursor to the Subdivision Map Act was adopted. That brief statute, however, simply set cartography standards for the physical making of maps. Not until 1929 did local governments receive specific authority for the substantive review of a subdivision map's design and improvements, Seltzer explained. Thus, lots created prior to 1929 were likely not subject to any local government standards. The court noted that a "‘final map' or a ‘parcel map' … are statutorily defined to include only those maps that have been reviewed and approved for recordation by a local agency under the provisions of the Map Act or a local ordinance adopted thereunder." Seltzer contends that local agency review and approval could not have occurred prior to adoption of the revised Subdivision Map Act in 1929. "The way the court wrote its opinion, it is the design and improvement of subdivisions that is critical," Seltzer said. "If old maps were recognized, the whole state could be subdivided into these grids that no one knew existed." In essence, all land use planning and infrastructure planning would go out the window, he said. The court ruling, written by Justice Marvin Baxter, almost reads like a county's brief: " f we were to adopt plaintiff's position and hold that local agencies must issue a certificate of compliance for any parcel depicted on an accurate, antiquated subdivision map, we would, in effect, be permitting the sale, lease and financing of parcels: (1) without regard to regulations that would otherwise require consistency with applicable general and specific plans and require consideration of potential environmental and public health consequences; (2) without consideration of dedications and impact mitigation fees that would otherwise be authorized by the Act; and (3) without affording notice and an opportunity to be heard to interested persons and landowners likely to suffer substantial deprivation of their property rights." Jonathan Wittwer, counsel for the Granada Sanitary District in San Mateo County and a longtime municipal law attorney, said the Supreme Court's analysis supports making 1929 — and not 1893 — the cutoff date. "As I read the case, if the local government did not have the authority to deny or conditionally approve a subdivision map, then why should they have to recognize the map today?" Wittwer said. "It wasn't until 1929 that local governments got this authority." However, the PLF's Burling said the government attorneys are reading too much into the opinion — although all attorneys agreed the subject is likely to be litigated soon. Burling contended that the other side's interpretation is unfair to landowners who, at the time they recorded maps, did everything according to the law in place at the time. Plus, the grandfather clause in the 1929 version of the Map Act "clearly did not abrogate" previously recorded maps, he said. These landowners obviously thought they were creating subdivisions, Burling said. "Were they going out and hiring surveyors and recording these maps just for the hell of it?" he asked rhetorically. Local solutions Stanislaus County probably has addressed antiquated subdivisions as a planning issue more directly than any other jurisdiction in the state. Two years ago, the county adopted an ordinance requiring a use permit for the development of any lot created prior to 1972, when the Subdivision Map Act was last overhauled. What county planners had learned, after an exhaustive search of assessor's records, was that about 3,000 old lots existed in "inappropriate areas," county Planning Director Ron Freitas said. "The real issue we have is with a concentration of dwellings in any agricultural area," Freitas said. One map, for example, created 100 one-acre parcels in an agricultural zone without sewers, public water service or paved roads. The county does not dispute the legality of the parcels, Freitas said. Instead, the process allows the county to decide what can be built on the parcels. When reviewing applications to build houses on these lots, the county considers the availability of infrastructure and the impact of development on surrounding uses. So far, the process has worked well, he said. In coastal San Mateo County, maps from the early part of the 20th century have been relied upon for years for development, Planning Administrator Terry Burnes said. The county generally has treated the lots as legal and has allowed construction so long as it meets modern development standards, he said. That might mean a landowner must combine several 25-by-25 parcels. San Mateo County's local coastal plan draws a line around territory where these maps exist and generally prohibits development outside that line, he said. "I think the term ‘antiquated subdivision' may get used too broadly," Burnes said. "I make a distinction between an old subdivision that has been the framework for development, and a subdivision map that sits out in the middle of nowhere and hardly anyone knows about and has never been relied upon for any reason." Wittwer's client, the Granada Sanitary District, provides sewer service to these areas covered by the old San Mateo County maps. The agency requires a variance before it will extend service to a nonconforming lot, he said. Contacts: Peter Detwiler, Senate Local Government Committee: (916) 445-9748. Daniel Curtin, Jr., McCutchen, Doyle, Brown & Enersen, (925) 937-8000. Alan Seltzer, Santa Barbara County Counsel's office, (805) 568-2950. Jonathan Wittwer, Granada Sanitary District, (831) 429-4055. James Burling, Pacific Legal Foundation, (916) 362-2833. Terry Burnes, San Mateo County Planning and Building Division, (650) 363-1861. Ron Freitas, Stanislaus County Planning Department, (209) 525-6330. Linda Krop, Environmental Defense Center, (805) 963-1622.

Elisa Barbour is a research associate at the Public Policy Institute of California (PPIC) in San Francisco. She recently published a comprehensive study on regional planning, "Metropolitan Growth Planning in California, 1900-2000." In her study, Barbour says that California has tried to create stronger metropolitan planning institutions for 100 years. She calls the most recent surge of regionalism the "third wave," after the establishment of home rule, and the rise of single-purpose agencies. Barbour sees promise in the third wave reforms, but she notes that longstanding political obstacles remain (see CP&DR, March 2002, August 2001). Her study is available on the PPIC website, www.ppic.org. Barbour spoke with Managing Editor Paul Shigley in February. : Why is now the time to study regional planning and growth management? BARBOUR: I think momentum has been building for a couple of reasons. One of them is global economic conditions, which highlights the importance of regional economic health. Today we are facing continuing growth pressures in the face of limits — fiscal and environmental limits. That has changed the equation from past decades, when resources were more plentiful. : How big a factor is housing affordability in building momentum for regional planning? BARBOUR: The housing affordability crisis has played a very interesting role. On the one hand, housing policy has not been a strong venue for improving regional planning coordination. Even today, as the state government looks for means to strengthen housing mandates and incentives, most proposals are geared toward local jurisdictions, rather than toward strengthening regional institutions. On the other hand, the housing affordability crisis has opened up a logjam in policy debates. Because of the housing crisis, the state government has scrutinized local land use policy, and its regional consequences, much more carefully than it has in many decades. But local governments resisted efforts by the state to impose new housing mandates. Instead, they wanted to widen the discussion to include their own concerns about fiscal stability and discretion, and about other state policies affecting land use that may conflict with housing goals. What I'm suggesting is that a much broader discussion has opened up, because of the housing affordability crisis, to include the whole set of incentives and regulatory mandates. … Business leaders have all suggested that housing affordability is a major issue with their own competitive situation and an important factor in the quality of life for their employees. What it has done is bring the elements of land use policy to the table. : You use this great term, "vertical regionalism." What exactly is that? BARBOUR: After World War II, we adopted two main approaches to strengthening regional planning in California, and vertical regionalism was one of them. I'm speaking of the state and federally dominated regional planning in policy areas like transportation and environmental planning — policy areas that are inherently regional in scope, that required massive investments beyond the ability of local governments to muster, or intrusive regulation across local jurisdictions. The regional agencies that were established were generally organized along narrow, single-purpose functional lines. Their policies and programs were generally not coordinated with one another, and did not form part of a broader state growth policy framework. The other half is what I call horizontal regionalism. This refers to the institutions such as LAFCOs, councils of government and metropolitan planning organizations. These were established to incorporate local governments, and their land use authority, into regional planning more explicitly. These institutions tend to be organized like federations among independent governments, which implies that joint measures that affect local land use usually can be adopted only on a consensus basis. The most effective approach to regional planning should combine the three elements, and those are regional focus, policy integration and accountability. Many of our regional plans have been able to accomplish one or two of these goals, but rarely have we been able to see all three. … I think that's what the current reform wave is attempting to do — address a more comprehensive approach across policy areas, and to do so by aligning existing programs so that they can achieve the accountability. : We all know about competition for land uses among local governments. You talk about competition between the state and local governments. Could you explain what is at work there? BARBOUR: I decided that conflict is a better word. What I'm talking about is the ERAF shift that started in the early ‘90s that drove a wedge between the state and local governments regarding planning policy. I think this issue is the one where local governments have taken a stand and that local governments will not concede to new, more restrictive planning mandates unless their needs are addressed. For its part, the state government has not seen fit to renegotiate the relationship. What this indicates is that fiscal constraint is serving as a double-edged sword for regionalism. On the one hand, it has drawn attention to the need for regional cooperation to promote efficiency in public expenditure. But on the other hand, it exacerbates the conflict between local governments, and between local governments and the state. And this is why I think the housing crisis is so critical. It has cracked the nut open and forced the state to reconsider local land use policies, which, as local governments are quick to point out, are connected to fiscal policies and the framework in which local governments operate. : You talk about aligning state programs and policies with outcomes of collaborative regional processes. Does that mean regional decisions should drive state programs and policies? Who gets to decide? BARBOUR: Yes, regional needs should inform state programs and policies. But the second question — who gets to decide? — is complicated. In other words, who should assign regional needs? Many of our most pressing planning problems are regional, from water supply to air pollution to transportation investment needs. Even housing problems are regional in scope, and quite different across metropolitan areas. Policies developed from the bottom up by local governments have often lacked accountability and regional focus. But policies implemented from the top down by the state or federal government have also been rendered ineffective sometimes because they were too narrowly conceived or they lacked local support. The history of regional planning in the state suggests that clear policy objectives are needed for collaborative models to succeed, and in many cases, these objectives have been imposed externally. For example, regional planning experiments like the NCCP , Cal-Fed and the RCIP relied on the existence of clear environmental mandates to help provide a focus for planning. Political and economic realities in the state make an authoritative top-down micromanagement approach unlikely, and a one-size-fits-all approach difficult to imagine. So local participation and flexibility is critical. … If the state leverages existing resources — incentives like priority funding for housing or regulatory streamlining — then you might have a way to approach regional planning that avoids the major pitfalls of the past, when new mandates were rejected as too interventionist, but there was not the money for major incentives. : Clearly, you think there is need for more collaborative, regional approaches to planning. How would you convince state lawmakers of this? City council members? Average voters? BARBOUR: I think we're seeing an increased acceptance at the local level … In many cases, it's become clear that if they want to retain control, that may mean trading a measure of autonomy just because so many of their planning problems cross borders. Voters also recognize that planning problems cross local boundaries. Voters have long indicated that they are willing to support multi-jurisdictional planning for such things as transportation and utilities. : How about the state lawmakers? What would you tell them? BARBOUR: Lawmakers are also moving towards more concerted, coordinated state investment planning through measures such as AB 857, the new five-year capital investment planning requirement, and ACA 11. The projected level of need for new investment is so mind-boggling that more strategic planning and efficient investment have become more critical. … By aligning state programs and policies with the outcomes of a collaborative regional process, the state might avoid those pitfalls by promoting coordination through the promise of mutual gains.

Opponents of a proposed power plant in San Jose have lost an attempt to get their arguments heard in court. The Third District Court of Appeal ruled that project opponents could not bring a case in Superior Court because the California Supreme Court has exclusive jurisdiction to review power plant certification decisions by the state Energy Resources Conservation and Development Commission. The fact that the Supreme Court rejected the opponents' lawsuit without reviewing the record did not matter, the Third District held. The case stemmed from the Energy Commission's approval in September 2001 of Calpine Corporation's proposal to build a 600-megawatt power plant in San Jose's Coyote Valley (see , October 2001; July 2001, March 2001). In December 2001, project opponents simultaneously filed lawsuits at the state Supreme Court and in Sacramento County Superior Court. The lawsuits argued that the Energy Commission had violated opponents' due process rights by failing to provide a fair hearing, violated the public trust doctrine of the state constitution, and violated the U.S. constitution's supremacy clause because the proposal conflicted with federal air quality regulations. Superior Court Judge Gail Ohanesian dismissed the lawsuit, concluding only the state Supreme Court had jurisdiction under a law approved in 2001 (Public Resources Code § 25531). Five days later, the Supreme Court summarily denied the opponent's petition for a hearing. Opponents appealed Judge Ohanesian's decision. They conceded the statute required them to seek relief in the Supreme Court, but they argued that the Superior Court had jurisdiction to consider the case because the Supreme Court had ruled summarily. They contended their constitutional claims had to be heard somewhere. But the unanimous three-judge panel of the Third District ruled that the state Supreme Court's summary ruling was all the opponents were going to get. "The flaw in argument is plaintiff's assumption that the Supreme Court failed to conduct any substantive review of their constitutional claims when the court summarily denied their petition for a writ of mandate. This assumption is unwarranted," Justice Ronald Robie wrote for the court. "If a writ petition in the California Supreme Court is the exclusive means of obtaining review of a quasi-judicial decision, the Supreme Court's summary denial of such a petition is a final judicial determination on the merits," Robie continued. Robie cited the U.S. Supreme Court's ruling in , (1920) 251 U.S. 366. That case stood for the proposition that judicial review on the merits may occur without a review of the evidentiary record, Robie wrote. For the same reason, the court rejected the opponents' argument that the Superior Court's unwillingness to review the actions of an executive branch agency was a violation of the separation of powers doctrine. "Plaintiffs constitutional claims were judicially reviewed on the merits by the California Supreme Court," Robie concluded. The Case: , No. C041090, 03 C.D.O.S. 1115, 2003 DJDAR 1407. Filed February 5, 2003. The Lawyers: For Santa Teresa Citizen Action Group: Stephan Volker, (510) 496-0600. For the commission: William Chamberlain, CEC, (415) 654-3951. For Calpine: Jeffrey D. Harris, Ellison, Schneider & Harris, (916) 447-2166.

More than a decade ago, a state appellate court ruled that developers could hire their own consultants to prepare environmental impact reports required by the California Environmental Quality Act (CEQA). Now, prompted by events surrounding the controversial Newhall Ranch development in Los Angeles County, a Southern California legislator has launched an effort to outlaw the practice. Assembly Bill 406, introduced February 14 by Assemblywoman Hannah-Beth Jackson (D-Santa Barbara) would prohibit anyone except the lead public agency or a consultant employed by the lead agency from preparing draft CEQA documents. It also would forbid the use of confidentiality agreements to prevent those consultants from publicly disclosing their findings — a tactic increasingly used by large developers, ostensibly to protect "trade secrets" — and would prohibit landowners from denying government employees and consultants access to their property to conduct environmental surveys. The use of private consultants to draft EIRs has long made project opponents squirm. How objective can a study be, they ask, when it is being drafted by people paid by the developer, whose financial interest in a favorable outcome is so clear and urgent? That concern was given new weight in recent months by a criminal investigation into the environmental review for Newhall Ranch. The project, proposed to be built over 25 years on 12,000 acres at the northwest end of the booming Santa Clarita Valley, would contain enough houses, condos and apartments for about 70,000 people. Newhall Land and Farming Company, developer of the nearby planned community of Valencia, is the developer. Because of its size and location — an undeveloped swath of oak-studded hills and valleys abutting growth-averse Ventura County —the Newhall Ranch project has been a magnet for controversy and litigation. That litigation has so far resulted in one court ruling of statewide significance: A Kern County Superior Court judge in 2000 ordered the company to redo the analysis of water availability in the project's environmental impact report, finding that Newhall had improperly relied on "paper" supplies from the State Water Project in determining that there would be no need to tap local groundwater. The company's latest entanglements, however, stem not from the perennial California struggle over water but from discovery of a rare plant on the Newhall Ranch property. Previously thought extinct, the San Fernando Valley spineflower was rediscovered in 1999 on land in the Santa Monica Mountains in Ventura County where another large development, Ahmanson Ranch, is planned. Given the ecological similarity between the Ahmanson and Newhall properties, it was logical to suspect the rare plant might be present at both, and in 2000 Newhall hired biologists to look for it. The biologists found one stand of spineflowers along a dirt road at Newhall Ranch, and several other stands of what they suspected were members of the same species. According to court documents recently obtained by the , Newhall then told the biologists to stop searching and reminded them that they were bound by a confidentiality agreement that barred them from disclosing what they'd found to anyone outside the company. The suspect plants were never sent to a lab for testing. When Newhall released a revised draft EIR in 2001, it reported just the single confirmed stand of spineflowers along the road, and concluded that the plants could easily be protected by fencing if the development were allowed to proceed. Environmentalists were suspicious and so were investigators for the California Department of Fish and Game (DFG), who contacted the Los Angeles County District Attorney's Office with allegations that Newhall was covering up the presence of additional stands of the endangered plant. Prosecutors began an investigation, and last year obtained a warrant to search Newhall's property. After the search, Newhall acknowledged having found additional stands of spineflowers, but said that any destruction of endangered plants took place during the course of routine agricultural operations and was therefore lawful. The company subsequently filed new environmental documents disclosing the additional spineflower populations. The company has steadfastly denied wrongdoing — and the District Attorney has dropped his investigation — but the episode renewed skepticism about the Los Angeles County policy allowing developers to hire their own consultants to prepare disclosure documents required by CEQA. Los Angeles County is hardly alone in doing so. The practice was given a stamp of judicial approval in 1991 by a state appellate court ( , 232 C.A.3d 1446; see , September 1991), which rejected an environmental group's claim that an EIR was "tainted" because it was prepared by a consultant retained by the developer. The court held that as long as the county used its own independent judgment in approving the EIR, the process was valid. A least 166 cities and counties allow developers to hire their own consultants to prepare CEQA documents, according to the Governor's Office of Planning and Research. So the Newhall episode raises a question of broad significance: For whom are those consultants really working? Under CEQA, legal responsibility for determining the environmental impact of a proposed project belongs to the lead permitting agency. The existing law, and AB 406 reaffirms, however, that the public agency may hire private consultants to prepare EIRs, and then bill project applicants for the EIR's cost. Private consultants engaged in the CEQA process are, in essence, acting as proxies for that public agency, even though the developer is paying the bills. But if those consultants are acting as surrogates for the public, can their work product legally be kept out of the public record through the sort of confidentiality clause Newhall used to prevent its biologists from talking about spineflowers? If so, the policy potentially turns CEQA on its head, helping developers suppress unfavorable information rather than forcing full disclosure. Jackson's bill is meant to eliminate that unintended consequence of the 1991 appellate court ruling, while specifically exempting legitimate trade secrets from the disclosure requirements. "These are issues that people who work with CEQA have been concerned about for a while," said Sandra Spelliscy, general counsel for the Planning and Conservation League, which sponsored AB 406 in response to the Newhall Ranch controversy. "The whole point of CEQA is transparency," Spelliscy said. Sources: Sandra Spelliscy, Planning and Conservation League, (916) 313-4513. Newhall Land and Farming Company, (661) 255-4000. Assemblywoman Hannah-Beth Jackson, (916) 319-2035.

The owners of apartment buildings in the City of West Hollywood cannot avoid the city's rent control ordinance by relying on 1980s-era approvals to convert the buildings to condominiums, an appellate court has ruled. The owners of two buildings received approval from the state Department of Real Estate to convert the units to condominiums that could be sold separately. They received this approval before West Hollywood incorporated in 1984. However, the Department of Real Estate's "public report" — a disclosure to potential buyers — expired after five years. The owners have received new public reports twice, but only after lengthy periods when no public reports were available. Those lapses were the key part of the case. In 1991, the state Supreme Court ruled in , 52 Cal.3d 1184 (see , April 1991), that the city could not impose its requirement for a conditional use permit prior to the conversion of the buildings to condominiums. And because the units were condominiums, the city could not apply its rent control ordinance. But in the case at hand, a unanimous three-judge panel of the Second District Court of Appeal held that the property owners' protection under Beverly Towers ended when the public reports lapsed. "It is obvious that the application of Beverly Towers contemplates a legitimate enterprise to develop and sell residential property," Justice Charles Vogel wrote. "Here, however, respondent owners have been engaged in a charade to continue in the apartment rental business, not an enterprise to convert and sell apartment units as condominiums." The city sued the owners of the two apartment buildings in 2000, alleging that they were charging rents in violation of the city's rent control law. The city asked the court to bar the excessive rents and order refunds to tenants. The city also sought a declaration that at least one condominium unit had to be sold before an owner could seek an exemption to the rent control ordinance allowed under the Costa-Hawkins Rental Housing Act (Civil Code §§ 1954.50 – 1954.535). None of the units had ever been sold, although apparently one unit in each building was sold after the city filed its lawsuit. A trial court judge ruled for the property owners, but the appellate court reversed the decision. The property owners argued that the public report was a minor, ministerial item, and that the Department of Real Estate's approval of renewed public reports without requiring a city use permit meant that the owners were not required to comply with the local law. The appellate court rejected both arguments. The public report is a critical document. A developer who sells a unit without obtaining a public report is subject to criminal sanctions, and the buyer has the right to void the contract, according to the court. As for the state agency, the court ruled that the property owners' failure to comply with the city ordinance was not a basis for the Department of Real Estate to deny a public report. "The reality is that City had no input into the process when respondent owners requested renewals of the public reports. City therefore had no opportunity to argue the pertinent legal point: the prior expirations of the first public reports now required respondent owners to comply with City's regulations enacted after incorporation," Vogel wrote. The court remanded the case to the trial court for further proceedings. The Case: , No. B154786, 03 C.D.O.S. 982, 2003 DJDAR 1221. Filed January 30, 2003. The Lawyers: For the city: T. Peter Pierce, Richards, Watson & Gershon, (213) 626-8484. For the property owners: Michael Anderson, Law Offices of Rosario Perry, (310) 394-9831.

The value of property being taken by eminent domain cannot be based on the property's zoning if the same entity that is taking the property also imposed the zoning, the Fourth District Court of Appeal has ruled. The court held that San Diego County Superior Court Judge Sheridan Reed was correct to prevent the jury from considering restrictive zoning on property that the City of San Diego took for a freeway. Instead, the jury based its decision on testimony from the property owners' experts, who presented values based on the property being rezoned like similar, nearby land. " he city ignores established law that a condemned property is to be valued as if the project for which the land is taken did not exist," Justice Gilbert Nares wrote for the unanimous three-judge panel. " he city cannot enact restrictions on property it seeks to condemn for the express purpose of preventing development and thereby freeze or depress property values, and then attempt to show that that same zoning restriction prevents a highest and best use inconsistent with its terms. Such a position is contrary to eminent domain law." The case stemmed from the construction of Highway 56, an east-west route connecting Interstate 5 and I-15 in northern San Diego. The freeway has been under consideration since 1959 and has been part of the city's circulation element since 1965. The freeway was proposed to run through the 12,000-acre "North City Future Urbanizing Area," which the city had zoned for agriculture, permitting only one dwelling unit per 10 acres to prevent leapfrog growth. In 1992, the city adopted a framework plan for the future development of the area, and, in 1996, voters supported the city's decision to rezone a portion of the area to allow development of up to 10 units per acre once the exact route of Highway 56 was selected. In the meantime, the city maintained the 10-acre zoning to prevent development that might conflict with the final freeway alignment. In June 1998, the city approved the final alignment; Caltrans did the same the following year. In September 1999, the city filed an eminent domain lawsuit against Rancho Penasquitos Partnership. The city sought to take 11 acres of the partnership's 108-acre parcel. The city offered $1.3 million, based on the property's agricultural, 10-acre zoning. The landowner set the value at $3.8 million based on a higher development potential and requested $4.6 million to offset damages to the remaining property. During the trial, the city and the landowner differed over what evidence the jury should consider. Judge Reed sided with the landowner, and the jury awarded the property owner $3.9 million — $2.9 million for the 11 acres, and $1 million for damage to the remaining property. The city appealed on a number of grounds, but the main argument was about what evidence the judge should have allowed. Essentially, the city contended that the agricultural zoning had to be considered, while the landowner said other properties' recent upzonings to permit residential development should be the basis for the valuation. The Fourth District ruled that the landowner — and the trial judge — were right. The court relied heavily on , (1973) 33 Cal.App.3d 960, which analyzed a situation where the condemning authority and the entity responsible for zoning were the same. The San Diego zoning, the court ruled, "falls squarely under the rule set forth in that evidence of a zoning restriction is inadmissible to show a lower value to the condemned property where (1) the restriction is imposed to freeze or depress the value of land that a government agency seeks to condemn, and (2) the same entity is both the condemner and the authority responsible for that restriction." The city argued that it had acted in good faith, and that its zoning was a valid exercise of the police power, was "good planning," and was the proper designation of land for future acquisition. But none of that was a good enough defense for the court. " he terms of the restrictions state clearly that they were designed to prevent development on land that might later be condemned," Justice Nares wrote. "City was attempting to prevent development on properties it intended to condemn in order to freeze or depress values. Indeed, the city offers no other explanation for the zoning restriction." The court also pointed to Code of Civil Procedure §1263.330, which prevents the use of "preliminary actions of the plaintiff relating to the taking of the property" in determining fair market value. The city contended the zoning was not a preliminary action because the zoning was in place years before the final alignment was decided. But the court did not buy the argument. All of the city's actions were leading to the freeway project. The Case: , No. D038316, 03 C.D.O.S. 942. Filed January 30, 2003. The Lawyers: For the city: David Skinner, Meyers, Nave, Riback, Silver & Wilson, (510) 351-4300. For Rancho Penasquitos Partnership: Jeffrey Oderman, Rutan & Tucker, (714) 641-5100.

Your tax dollars at work! proclaims a sign at the edge of the road, where a public works project is under construction. If we were to see this sign in Calimesa, a city in the San Gorgonio Pass area of western Riverside County, we might be forgiven for pausing and trying to parse its meaning. When the sign says "your tax dollars," what exactly is the sign referring to? The taxpayers of Calimesa? Or the taxpayers in neighboring Beaumont, whose tax dollars are now flowing to Calimesa as a result of a settlement to avoid litigation between the two cities. The peculiar settlement between Beaumont (population 11,000) and Calimesa (population 7,800) could be characterized as one of those "don't-try-this-at-home" tricks. In this case, the trick not to try is attempting to readjust the spheres of influence of two neighboring cities — and then not completing the job. The ensuing standoff between the two cities and the generous payoff that followed is exactly the kind of wrangling and side-deal-making that the Cortese-Knox-Hertzberg Act and Local Agency Formation Commissions are supposed to avoid. A massive residential subdivision, known as Oak Valley and covering more than seven square miles, is the gambit in this small-town tragi-comedy. The specific plan for the project, approved by Riverside County for an unincorporated area of the county, entitles the developer, Oak Valley Partners LP, to build up to 13,000 single-family homes, giving the Oak Valley subdivision a larger population than Beaumont and Calimesa combined currently have. At issue is the last bit of Oak Valley that has not yet been incorporated, a 2.7-square-mile area that surrounds The PGA of Southern California Golf Club at Oak Valley. By itself, this area has entitlements for 4,000 houses. During the 1990s, LAFCO had placed nearly the entire unincorporated portion of the project within Beaumont's sphere of influence. In the late 1990s, Beaumont and Calimesa negotiated about splitting the Oak Valley subdivision more evenly between the two cities. According to an agreement dated July 23, 1997, Beaumont would give up its claim to the golf club portion. The two cities shortly thereafter sent applications to Riverside County LAFCO requesting the sphere change. A side story, which or may not be meaningful to this case, is the highly in-grown nature of local government during this period. Alan Kapanicas, Beaumont's city manager then and now, was also contract city manager for Calimesa. That position is currently filled by Harry Jensen. Beaumont city staff prepared the sphere-change applications for both Beaumont and Calimesa, according to George Spiliotis, executive officer of Riverside County LAFCO. Later, according to Spiliotis, Calimesa asked LAFCO to put the sphere amendment application on hold. In spring of 2002, according to Calimesa's Jensen, "we started working with LAFCO to resume progress to complete the application and finalize the transfer of the sphere of influence and simultaneously annex that area." Yet about two months after Calimesa re-started the annexation process, "Beaumont and a prospective (land) purchaser started to talk to LAFCO about annexing the same area into the city of Beaumont." Perhaps Beaumont considered the 1997 agreement a dead letter when the city informed LAFCO in more recent times that the city wanted to incorporate the golf club area. We do not really know, because we were unable to reach Kapanicas or any other Beaumont city officials, including the mayor, who did not return repeated calls for this story. We do know this: Calimesa officials got wind of the plan and threatened to sue both Beaumont and LAFCO. The two cities had public and sometimes acrimonious discussions about a settlement. In December, they finally hit upon a deal. In my view, it is a generous settlement for Calimesa. Basically, the agreement works this way: In exchange for renouncing its bid to annex the territory that Beaumont wants, Calimesa receives $100,000 from the developer, Oak Valley Partners LP. The city will also receive a fee surcharge of $100 for each of the 4,000 homes from the land developer and the homebuilder, Pardee Oaks. In addition, the two cities will share sales and property tax revenue from commercial development on a 50-50 basis for the next 15 years. Similarly, the two cities will share transient occupancy tax for 25 years. A tiny bit of the property, about 1 acre adjacent to an existing retail center, will be annexed by Calimesa. Maybe I am being uptight, but the way this pie was carved up bothers me. It is being called tax sharing, but it really more like a tax shakedown. Now, I think tax sharing can be an enlightened form of public policy. It is unfortunate that the peculiarities of the current California tax code tend to make competitors and enemies out of neighbors. Rather than raiding each other's retailers, killing each other's projects and wasting public money in endless court battles, cities are often better off sharing the tax benefits of major projects. The difference here, however, is that this ostensive tax-sharing plan is not based on policy. The money that Beaumont is giving to Calimesa is not based on some notion of the regional good. It is a penalty that one city is paying for allegedly trying to screw its neighbor. Without a clear benefit to Beaumont taxpayers, the tax-based payoff to Calimesa seems like a confusion of the nexus between taxpayers and the public benefits that taxpayers can reasonably expect to receive. In other words, this "tax-sharing" deal is one further example of neighbors fighting and despoiling one another, rather than cooperating. Beaumont taxpayers might well ask where their tax dollars are going. If they are interested in finding out, all they need to do is drive to Calimesa and look for a sign that says, "Hey Beaumont — Your tax dollars at work."

The owner of a business that spreads sludge from wastewater treatment plants on fields in Kings County has taken a beating in court over a lawsuit that claimed the county could not exempt an ordinance regulating sewage sludge disposal from environmental review. In upholding a decision by Kings County Superior Court Judge Peter Schultz, the Fifth District Court of Appeal ruled that Shaen Magan failed to present any evidence to support his claim that the ordinance was not categorically exempt from the California Environmental Quality Act (CEQA). In the opening of her opinion, Justice Rebecca Wiseman wrote, "Let us get this straight: We have a party whose business it is to dump sewage sludge generated in Southern California on agricultural property located in the San Joaquin Valley. His complaint is that the Board of Supervisors violated environmental laws when it took regulatory action phasing out and ultimately prohibiting this practice. Astoundingly, he alleges there was a reasonable possibility that the Board's decision to prohibit the spread of sewage sludge would have an adverse environmental impact. He reasons that, among other things, not spreading sewage sludge degrades agricultural land. We, like the trial court, do not buy it." After a year of hearings, the county in January 2001 adopted the ordinance regulating sewage sludge application to land. The Board of Supervisors cited studies that found sludge, because it contains heavy metals, pathogens and other pollutants, threatened human and environmental health and that federal regulations were inadequate (see , July 2000). The county determined the ordinance was categorically exempt from environmental review under CEQA Guideline § 15308 because it was a regulatory action to protect the environment. Magan filed suit. He had a permit to dispose of sludge on 1,800 acres in Kings County owned by the Orange County Sanitation District, and he also had contracts with the Los Angeles County Sanitation District and the cities of Goleta and Santa Barbara to apply sludge to other properties in Kings County. Judge Schultz rejected Magan's CEQA claims. On appeal, Magan argued there was no substantial evidence in the record demonstrating that the county had considered the ordinance's environmental impact, and there was enough evidence of a potential impact to block the ordinance from receiving a categorical exemption. The unanimous three-judge appellate panel, however, ruled that county did not need to present substantial evidence before declaring the exemption. "Contrary to appellant's assertions, the county was not required to conduct an environmental analysis under CEQA after determining the ordinance was categorically exempt," Justice Wiseman wrote. "Once the agency determines that the project falls within the exempted class, no additional environmental analysis is required. … he county only has the burden to demonstrate substantial evidence that the ordinance fell within the exempt category of projects. This the county has done." As for potential environmental impacts, Magan argued that the ordinance would shift sludge disposal to other jurisdictions, cause sludge generators to employ additional treatment that could harm the environment, and degrade Kings County farmland. The court ruled that Magan "has failed to support his claims with any evidence in the record. The claims are based entirely on speculation. Opinions which state ‘nothing more than "it is reasonable to assume" that something "potentially … may occur" do not constitute substantial evidence' necessary to invoke an exception to a categorical exemption." Wiseman cited , (2001) 90 Cal.App.4th 1162, (see , September 2001). The court also rejected Magan's argument that he did not have time to establish a record of evidence. The Case: , No. F039802, 03 C.D.O.S. 548. Filed December 12, 2002. Ordered published January 13, 2003. The Lawyers: For Magan: David Doyle, Doyle, Penner, Bradley & Armstrong, (559) 261-9321. For the county: Peter Moock, county counsel's office, (559) 582-3211.

An economic downturn that has forced up Bay Area unemployment and office vacancy rates shows little sign of abating. Business leaders, economic development experts and analysts say that righting the greater Bay Area's economic ship will be neither easy nor quick. In the meantime, some business leaders and analysts say the region must get prepared for the next wave by building more workforce housing and reconsidering the role of the office park. The problem — clearly seen now — is the region's over-reliance on all things high tech. Many tech sectors are struggling, so the economic downturn has been the worst in Santa Clara County, home to Silicon Valley. During 2002, Santa Clara County lost 34,300 jobs and saw its unemployment rate rise well above the state and national averages to 7.5%, according to the state Employment Development Department. Overall, the county has lost about 100,000 jobs since the dot-com sector started to crash in late 2000. During the past year, San Francisco lost a greater share of jobs than the San Jose area, but San Francisco's unemployment rate is lower. Job loss, in fact, has been localized during the recession, and parts of the East Bay and North Bay have seen continued, yet slowing, economic growth, according to an analysis by SPHERE Institute Vice President Michael Dardia. The office vacancy rate is grim in many places, including San Francisco and the South Bay, where the rate remains in the neighborhood of 25%. Some real estate experts say a portion of the space that is leased is discounted or underused. Things are not likely to turn around until the economic malaise affecting much of the world — especially Japan — lifts because Bay Area manufacturing and sales is tightly tied to the global economy, experts say. A January survey of business executives by the Bay Area Council (a coalition of 275 businesses) detected little optimism. Forty-seven percent of respondents said economic conditions were moderately or substantially worse than six months earlier. And the quarterly poll found optimism regarding the next six months at its lowest level since the poll began in October 2001. Some economic development proponents are using this period to reassess the big picture. "You look at the state atmosphere right now and it's not real appealing to economic development," said Sean Randolph, president of the Bay Area Economic Forum. The cost of electricity has settled at a high level and many people believe the power system solutions of 2001 were temporary, he said. Randolph also pointed to the high cost of housing, transportation congestion, rising worker's compensation costs, and a structural state budget problem. Randolph's organization is finishing a report on international trade that makes clear how reliant the Bay Area is on global commerce. Bay Area Economic Forum is also pursuing a regional platform to improve coordination among security planners and tech companies, Randolph said. Joint Venture Silicon Valley recently put together a regional economic strategy leadership team "to look at our behaviors and our perceptions," said Marguerite Wilbur, the organization's president and CEO. Joint Venture has already collected the data, so the leadership team should have recommendations by June, she said. A Joint Venture paper released last year, "Preparing for the Next Silicon Valley," emphasized the need for government, schools and the private sector to be flexible. The next wave of technological innovation could bypass the Silicon Valley in favor of San Diego, Boston, Washington D.C., or another tech hotbed. Or the next wave "could roll over us like the Internet boom," which may have left behind more damage than prosperity in the Bay Area, according to Joint Venture. "We have to prepare ourselves rather than react to changes in the economy," Wilbur said. "That is not something that most regions do." Preparation should involve education changes such as new college degrees that combine life sciences and computer engineering, better workforce training, construction of more workforce housing, and increased local government flexibility in zoning and providing infrastructure and services. The next technological wave is unlikely to involve development of large business parks on the cheapest available land, Wilbur said. One large company, whom Wilbur declined to name, recently decided it would rather have employees working in small nodes near their homes in places like Palo Alto and San Francisco, rather than commuting to a large campus in the South Bay. If a dispersed work force is the model for the future, it "has huge implications for land use," she said. Commercial and residential development patterns, and the transportation system — all of which are based on the automobile — would change. Again and again, business analysts return the economic development discussion to the Bay Area's housing, which remains the nation's most expensive. "We are always focusing on the issues of economic development and the cost of doing business," Randolph said. "In the Bay Area, a lot of that comes down to housing availability and the huge deficit we've been living with for so long. And it causes many of the transportation problems we have." For a variety of reasons, developers often must fight to build housing in the Bay Area, said Stephen Levy, executive director of the Center for the Continuing Study of the California Economy. "I've been arguing that building housing is the region's number one economic development priority," Levy said. Bay Area businesses and public agencies struggle to hire employees because housing is scarce and expensive, said Levy, who also argues for reducing land use regulation and overhauling the government fiscal formula so that property taxes are enough to fund high-quality public services. Wilbur said jobs and education currently rank higher than housing and transportation on the public's list of concerns. But, she said, "I think housing is just as important now as before. The gap between what you can afford and what is available is still extreme." There is talk of converting some vacant office buildings into residential or mixed-use buildings. However, the cost of conversions, financing difficulties, and local governments' reluctance to rezone property where they had planned for uses that generate jobs and sales tax appear to be thwarting movement toward office building reuse. Contacts: Sean Randolph, Bay Area Economic Forum, (415) 981-7117. Marguerite Wilbur, Joint Venture Silicon Valley, (408) 271-7213. Stephen Levy, Center for the Continuing Study of the California Economy, (650) 321-8550. Joint Ventura Silicon Valley website: www.jointventure.org Bay Area Council website: www.bayareacouncil.org

In its first ruling directly addressing the validity of "antiquated subdivisions," the California Supreme Court has held that maps recorded prior to adoption of the first precursor to the Subdivision Map Act in 1893 do not create legal parcels for today's purposes. The court's unanimous decision came in a case from Sonoma County, where a landowner sought certificates of compliance for 12 lots based on a map recorded in 1865 by a previous landowner. "Consistent with the Map Act's salutary purposes to facilitate local regulation of the design and improvement of subdivisions so as to encourage orderly community development, we hold that antiquated subdivision maps, recorded in the absence of an applicable subdivision statute, ordinance, or regulation, did not in themselves establish subdivisions or create legal parcels that mandate the issuance of certificates of compliance for the subdivided parcels they depict," Justice Marvin Baxter wrote for the court. Sonoma County Deputy County Counsel Sue Gallagher, who argued the case at the Supreme Court, was pleased with the ruling. "It not only clarifies that we would not recognize pre-1893 maps, but it sets up a framework for handling other old maps," she said. "The court did not simply draw a bright line at 1893," Gallagher insisted. Instead, the court ruled that discretionary local agency approval of a map — or the conveyance of individual parcels — was required to create legal parcels, she said. In helping argue the property owner's case, Pacific Legal Foundation attorney James Burling said that government regulators should not apply today's standards to old maps. Landowners could not have complied with a planning system that did not exist at the time, he said. Prior to 1893, it was common for a landowner to hire a surveyor and then record a map with the county, Burling explained. The 1893 law set standards for the maps. There was no purpose for the maps other than establishing new lots, he contended. Burling said he was surprised at the unanimity of the court's decision. But, he noted, the court made a statutory interpretation and did not weigh the constitutional property rights at issue. The case at hand was brought by the Gardner family, which owns about 158 acres west of Sebastopol. The Gardners' property contains two full lots and 10 fractional lots depicted on a map recorded in 1865 by landowner S.H. Greene. The property currently is zoned Resource and Rural Development and is the subject of a timber harvest plan. In 1996, the Gardners applied for 12 certificates of compliance based on the 1865 map. The county rejected the application; the Board of Supervisors found that recognizing the old map would undermine "rational land use planning." The Gardners sued, but they lost in Sonoma County Superior Court and at the First District Court of Appeal (see CP&DR Legal Digest , November 2001). The state Supreme Court then accepted the case. The state's high court had only nibbled at the edge of the issue in Morehart v. County of Santa Barbara , (1994) 7 Ca.4th 725, which dealt with applying the Subdivision Map Act's merger provision to an 1888 map. Appellate courts have touched on some of the issues. But attorneys on both sides agreed the Sonoma County case offered a clean set of facts for the Supreme Court to address question of how to treat antiquated subdivisions. Cities, counties, the state Attorney General's office and the California Chapter of the American Planning Association argued on one side. The landowner and property rights attorneys took the other side. In an opinion that reads in places like a treatise on the need for land use planning, Justice Baxter sided clearly with the first group. A property owner, Baxter wrote, may receive a certificate of compliance for a parcel from a city or county if the property complies with the map act and the applicable local ordinances. In this case, the 1865 Greene map was neither a "final map" nor a "parcel map" as defined by the map act, according to Baxter. And the Gardners did not argue that the Greene map was an "official map" under the map act. Because the 1865 map was none of these, it did not qualify for a certificate of compliance, the court ruled. The court rejected the property owners' argument that the map act's grandfather provisions — Gov. Code § 66499.30(d) and §66451.10(a) — applied to the 1865 map. Instead, the court held that §66499.30(d), when read with other sections of the statute, "protect subdivisions that either were already approved by local agencies, or were deemed exempt under previous subdivision laws in effect at the time the subdivisions were established." But there was no mechanism for local agency review and approval of maps prior to 1893. And there was no law from which the map could have been exempted. The court then specifically refuted Burling's argument that the 19th century maps were a method of creating subdivisions. " nlike a modern-day final map or parcel map, which upon recordation ordinarily converts what was formerly a single parcel into as many separate lots as appear on the map, the recordation of a subdivision map in Sonoma County in 1865, without something more (such as a conveyance), could not and did not work a legal subdivision of the property shown thereon, and property owners who recorded subdivision maps in Sonoma County in 1865 generally remained free to deed parcels and lots as they desired without regard to the depicted subdivision," Baxter wrote. The other section on which the Gardners based their grandfather argument — § 66451.10(a) — is the map act's "anti-merger" provision. It prevents a local agency from automatically merging contiguous legal parcels that have the same ownership. The property owners argued that, under Morehart , lots in a pre-1893 map are presumed to exist if the map was drawn accurately and sufficiently describes the property. "Section 66451.10(a) does not, however, address the creation of parcels in the first instance," Baxter wrote. "Nor does it provide a basis for legal recognition of subdivided lots depicted on antiquated maps." The Morehart court, Baxter continued, "purposely refrained from addressing the validity of subdivision maps recorded before 1893." "Not only does the Subdivision Map Act not support plaintiffs' position," Baxter wrote, "but issuing certificates of compliance based on the map Greene filed in 1865 would frustrate the act's objectives ‘to encourage and facilitate orderly community development, coordinate planning with the community pattern established by local authorities, and assure proper improvements are made, so that the area does not became an undue burden on the taxpayer.'" In a footnote, the court cited the Board of Supervisors finding that the Greene map was "for the most part, drawn in a simple grid, without regard to topography, natural resources, and community needs and without community review." Issuing certificates of compliance for such a map today, the court ruled, would thwart the Subdivision Map Act. The court specifically said it was not ruling on maps recorded after 1893. But Gallagher noted that the court opinion focuses on local agency approval of the "design and improvement" of subdivisions. "It's very significant to us that they left open the question of maps recorded after 1893," she said. The Case: Gardner v. County of Sonoma , No. S102249, 03 C.D.O.S. 2003 DJDAR 1429. Filed February 6, 2003. The Lawyers: For Gardner: Leslie Perry, Perry, Johnson, Murray, Anderson, Miller & Moskowitz, (707) 525-8800. For the county: Sue Gallagher, county counsel's office, (707) 565-2421.

An 11,000-unit housing development and 325-acre "employment center" has won approval from the City of Lathrop, in the San Joaquin Valley east of the Bay Area. If built, the project would be the first major urbanization of one of the many flood-prone islands in the Sacramento-San Joaquin Delta. The "River Islands" project is proposed to include a wide variety of housing types, office parks that could employ 15,000 people, and a new retail and civic core for the 14-year-old city in San Joaquin County. But detractors, chiefly the Sierra Club, say the site is wrong for such development because the entire 4,800-acre project site lies within the 100-year floodplain. River Islands is of great interest to the state Board of Reclamation, which would have to approve the proposed changes to the flood management systems, because the development would be the first of its kind in the Delta. Not in recent history has a development put thousands of people on a site that has flooded with some regularity, said Steve Bradley, the board's chief engineer. City officials and the developer, the Cambay Group, contend that they have the flooding issues figured out. The developer proposes to surround the site, known as the Stewart Tract, with levees that are up to 100 yards across. Called "high ground," these levees would be big enough to allow housing development with a view of the adjacent river, said Susan Dell'Osso, project manager for the developer. "You won't even know it's a levee," she said. Where the high ground technique is not used, the developer will reinforce existing levees. An environmental impact report by EDAW Inc. found no flooding issues on site or downstream that had not been fully mitigated. That EIR, however, is going to be challenged in court by the Sierra Club. "We are adamantly opposed to build housing for thousands of Bay Area commuters on a Delta island," said Eric Parfrey, chairman of the Sierra Club's Mother Lode Chapter. "It's in the wrong location." A transition Lathrop might be the most growth-friendly city in a rapidly urbanizing county. The population of San Joaquin County has swelled by about 75% since 1980, according to the Census Bureau and state Department of Finance. The cities of Tracy, Manteca and even Stockton provide affordable bedrooms for Bay Area workers, despite commutes that can reach two hours in each direction. In the last few years, Lathrop (population 12,000) has seen some of that development in the form of single-family houses, freeway-serving commercial strips along Interstate 5, and new distribution warehouses. But the city has been the site of more planning and talk than of actual earthmoving. In 1996, Lathrop approved Gold Rush City on the same site as the currently proposed River Islands. Gold Rush City was to be a development of four theme parks, at least 5,000 hotel rooms, three golf courses, a regional shopping mall and 8,500 housing units (see , August 1996). Backers said the project would create 15,000 to 20,000 jobs — about one job for every new resident — and provide the city with $30 million to $60 million in annual revenue. The Sierra Club sued to prevent Lathrop from annexing the Stewart Tract and other farmland east of I-5. The environmentalists won a procedural ruling at the state Supreme Court that allowed the case to go forward, but they lost on the merits at the trial court in late 2000 (see , January 2001, October 1999). The Third District Court of Appeal upheld the trial court in an unpublished decision last year. Still, Gold Rush City never went beyond the drawing board. In November 2000, 56% of city voters approved amendments to the project development agreement, allowing housing construction to go forward before the promised job creation. In January, a unanimous City Council carried out Measure D by approving an amended development agreement, 30-year vested tract maps and other entitlements for River Islands. The first phase calls for 4,000 housing units (mostly single-family homes), a 3.7 million-square-foot employment center, and a 45-acre town center. The second phase involves an additional 7,000 housing units and two golf courses. The first phase is scheduled for completion by 2015, with another 10 years anticipated for full build out. In approving the project, councilmembers said River Islands would aid Lathrop by providing jobs and a diverse mix of housing. River Islands offers the "last and best price of ground for a business park" in the region, Councilman Robert Oliver said. Councilmembers said the city did not have control over impacts such as traffic congestion on freeways to the Bay Area, cumulative air pollution and the threat of flooding. The city is imposing a regional traffic mitigation fee to fund freeways, but the city has no control over the timing of those improvements, Mayor Gloryanna Rhodes noted. The U.S. Army Corps of Engineers and the Federal Emergency Management Agency — not Lathrop — should deal with flooding issues, Oliver contended. A new empire Lathrop Community Development Director Bruce Coleman believes San Joaquin County is a smaller, younger version of the Inland Empire east of Los Angeles. People who work in job centers near the coast are moving inland to get lower home prices, but with the exception of the logistics industry, most jobs remain in the Bay Area. "I think we can do it differently here," said Coleman, who previously worked in the San Bernardino County cities of Highland and Chino Hills. The way to improve on the Inland Empire model, he said, is to create cities with individual identities that are separated from each other and that offer an adequate number of good-paying jobs to decrease the area's economic dependence on the Bay Area. San Joaquin County and some of its cities have taken steps toward preserving farmland buffers (see , September 2000), and the county is part of the Inter-Regional Partnership, a state pilot program aimed at improving the local jobs-housing balance in the East Bay and northern San Joaquin Valley. Coleman believes the River Islands project is what the area needs. The project is proposed to provide every type of housing from apartments to large-lot, single-family homes to retirement living. The city will assess each new housing unit an economic development fee of $5,000 — a total of $55 million at full build out. Under the development agreement, 80% of the fee is for the River Islands project area, and 20% can be spent anywhere in town. Expenditures require the approval of both the master developer and the city. The proposed town center — a "Main Street" with a mix of retail shops, services, housing and possibly civic buildings — is located toward the eastern end of River Islands, but in the geographic center of the entire city, so it should provide a focal point for the whole town, Dell'Osso said. The entire project is designed with a water theme. A winding lake of about 300 acres is planned, as are numerous canals and waterways, giving the project about 20 miles of water frontage. About one-third of the lake frontage will be open to public access, Dell'Osso noted. Also, about 1,000 acres along the Paradise Cut, a creek on the project's southern boundary, will be set aside as habitat for the rare riparian brush rabbit and Swainson's hawk. The designated habitat also will provide additional storage for flood flows. "It's not just a housing development," Coleman said. "Yes, there are 11,000 housing units, but there is so much more to it." Not just yet Although the Cambay Group — an arm of Britain's Somerston Holdings Limited that is developing some of the Dougherty Valley in Contra Costa County — has received its entitlements from the Lathrop City Council, River Islands still faces a number of obstacles. The developer needs permits from the state Board of Reclamation and the U.S. Army Corps of Engineers. Commenting on the EIR, the Board of Reclamation's Bradley raised questions about the loss of flood storage on Stewart Tract and the downstream impacts. He also questioned the growth-inducing effects of urbanizing a Delta island. "It's a very, very big project," Bradley said. "If they reinforce their levees, that passes along the impact to someone else." Disposal of wastewater is also an issue. Engineers at the Central Valley Regional Water Quality Control Board (RWQCB) made clear they were not satisfied with the EIR for River Islands or with a draft EIR for a city sewer project that would serve the development. "The long-term wastewater disposal needs for the community need to be resolved, and appropriate permit limitations established, before subdivisions are approved for development," Timothy O'Brien, a RWQCB engineering geologist, wrote to the city last November. Early portions of River Islands would dispose of wastewater on the ground, but build out will require disposal of treated effluent to the San Joaquin River, which is already polluted. "At this point, the only assessments that have been done are for a land discharge," said Patricia Leary, a RWQCB senior engineer, who said the state will not permit wastewater disposal in the river without far more analysis. The potential for flooding, wastewater disposal and other issues are likely to be part of the Sierra Club lawsuit. The city adopted overriding considerations because the project would have unmitigated impacts on traffic, air quality, agricultural resources, mineral resources, public services and utilities, and fisheries. Parfrey, of the Sierra Club, said that as the project has gained momentum, the city has not provided adequate scrutiny. There are more appropriate places in the Central Valley to build houses than flood-prone farmland, he said. Planning Commissioner Crystal Quinley, who cast the only vote against the project, agreed. She endorsed the design of River Islands, but, she said, "I don't think it's in the right location." No one disputes the need for more and better jobs in the area. Yet there are no guarantees River Islands will fill with businesses — especially with Bay Area office vacancy rates in the range of 20%. Business advocates have struggled for years to lure businesses over Altamont Pass to the Central Valley. Moreover, Tracy and the 14,000-unit Mountain House development now under construction north of Tracy have about 900 acres designated for office growth, and both locations are about 10 miles closer to the Bay Area than Lathrop. Coleman believes River Islands will attract businesses once there has been two to five years of high-quality residential development. "The companies are going to want to be near their employees. It's a long-term thing," he said. Despite the questions, there is minimal opposition to River Islands within Lathrop. During the final public hearing in January, only two people (including Parfrey) spoke against the project. And Lathrop has plenty of other growth plans. In January, the city approved a 1,700-unit, 660,000-square-foot retail development just north River Islands called Mossdale Landing. That would be the first 40% of development within the 1,161-acre Mossdale Village. Coleman expects Lathrop's population to quintuple to approximately 60,000 within 25 years. Contacts: Bruce Coleman, Lathrop Community Development Department, (209) 858-2860. Susan Dell'Osso, Cambay Group, (209) 858-2040. Steve Bradley, Board of Reclamation, (916) 653-8089. Timothy O'Brien, Central Valley Regional Water Quality Control Board, (916) 255-3000. Eric Parfrey, Sierra Club, (209) 462-7079. River Islands website: www.riverislands.com

Political conflict is common wherever urban development pushes into habitat occupied by imperiled wildlife. Every state and region has its own battlegrounds, but nowhere in the United States is the collision between human population pressures and natural ecosystems more pronounced than on California's rapidly growing south coast. The conflict is particularly acute in San Diego County, a biological hotspot with a booming human population. To address this, the county has become a nationwide example of large-scale conservation planning's promise — such as dedication of large tracts of land for rare plants and animals — and its pitfalls — including a planning process that lasts longer than most presidential administrations. The latest example will enter its final phase in March. San Diego County's 4,200 square miles are home to 24 plant and animal species that are listed or proposed for listing as endangered by the federal or state governments, 300 species that are considered "sensitive," and more "species of concern" than any other county in the continental United States. The county also is undergoing explosive population growth, particularly in the northwest coastal area. From 1990 to 1999, population in that region grew by 19%, and the number of housing units increased 11%. That growth rate exceeded both that of the rest of San Diego County (12.6% during the decade) and the state (13.6%). Demographers say the total population of the cities on and near the county's northwest coast will grow from about 630,000 today to more than 800,000 by 2020. Negotiating or litigating protection for wildlife one species at a time, or one project at a time, can inflict economically painful uncertainty and delay on property owners and builders, while also slowing protection and recovery of imperiled plants and animals. To avoid these problems, San Diego County embraced the concept of large-scale conservation planning involving many pieces of property, species and agencies. The Habitat Conservation Plan (HCP) process, authorized under the U.S. Endangered Species Act (ESA), and the Natural Community Conservation Program (NCCP), operating under the California Endangered Species Act (CESA), encourage San Diego County's approach. These HCPs and NCCPs consist of contracts between local agencies or landowners and the state and federal governments. The applicants commit to certain conservation actions — setting aside acreage as habitat preserve, for example — and in return are issued "incidental take" permits under the ESA and CESA. Those permits allow the destruction of a protected species or its habitat outside the preserve, as long as the damage occurs during the course of otherwise lawful activities. When negotiated by public agencies such as cities or counties, HCP/NCCP restrictions are subsequently written into local land-use plans, allowing the permitting agencies to obtain incidental take permits from the state and federal governments. Those exemptions from ESA and CESA prohibitions are then extended to private developers who obtain permits from the local agencies. Although more than 400 HCPs have been negotiated nationwide, the three under way in San Diego County are among the most complicated and far-reaching. The largest and oldest is known as the Multiple Species Conservation Program (MSCP), begun during the 1980s. The MSCP focuses on the city of San Diego and its surroundings in the south county, including the cities of Santee and Chula Vista. Its goal is to set aside 170,000 acres in a network of habitat preserves, protecting 85 plant and animal species. Although the overall MSCP has been approved by all the participating agencies, it remains incomplete despite nearly two decades of work; Santee and Chula Vista are still preparing their own specific conservation plans to implement the MSCP, as well as required environmental documents. The second agreement is known as the North County Multiple Habitat Conservation Program (MHCP), and work on it began during 1991. It will set aside 19,000 acres of habitat preserve for 60 species around the fast-growing cities of Carlsbad, Encinitas, Escondido, Oceanside, San Marcos, Solana Beach and Vista. The MHCP is scheduled for San Diego Association of Governments board action on March 28. The third conservation plan will encompass more than 1 million acres of unincorporated land mainly in the east county. That effort, according to Janet Fairbanks, SANDAG senior regional planner, is years from completion. Given the bureaucratic complexity of the multi-jurisdictional landscape, it is not surprising that San Diego County communities have been working on the HCP/NCCP process for two decades. "It has been daunting, difficult, challenging, but not impossible," Fairbanks said. "Herding cats is the best description." But the long delay — during which population continues to grow, development pressures accelerate and the number of imperiled species increases — is not the only weakness of such large-scale HCPs. The process itself has been criticized for the shaky science underpinning many conservation plans. This is one of the concerns that led the Center for Biological Diversity to sue the U.S. Fish and Wildlife Service over its decision not to put species on the endangered list on the grounds that the MSCP already provided adequate protection. When such plans emerge from the political process — as has been the case with the MHCP and MSCP in San Diego County, developed by large advisory committees composed of numerous stakeholders — biology can be shoved even further into the background. Nearly half the acreage identified as habitat preserve in the draft MHCP, for example, is already public forest or parkland at no risk of development. As for the rest, the plan specifies that private land will be added to the preserve only by requiring dedication as mitigation for specific projects, or by public purchase from willing sellers. So far, Fairbanks said, acquisition has not been a problem. "Acquisitions have occurred at a faster pace than any of us anticipated," she said. "The City and County of San Diego have both reached into their general funds to purchase land, something we were not expecting. Plus, the state of California passed Proposition 40 last year and Proposition 50 this year with specific funds allocated for habitat acquisition." Nevertheless, with municipal budgets straining thanks to California's fiscal crisis, there is no guarantee that local money will continue to be available, nor is there a guarantee that willing sellers will always be found. And without the private-land component, the habitat preserves identified in the HCP/NCCP agreements will never be able to provide the full ecological benefits they promise. Contacts: Janet Fairbanks, SANDAG, (619) 595-5370. Center for Biological Diversity, (619) 574-6800. San Diego MSCP plan summary, www.sannet.gov/mscp/plansum/shtml North County MHCP draft, www.sandag.org/index.asp?projectid=97&fuseaction=projects.detail