A state project to convert 225 acres of Colusa County farmland into wetlands and waterfowl habitat is not exempt from environmental review, the Third District Court of Appeal has ruled. The state Wildlife Conservation Board (WCB) argued that four possible exemptions to the California Environmental Quality Act (CEQA) applied to the project, but the court rejected all of them. The court noted that the project involves more than $100,000 worth of construction, including extensive grading and re-routing of irrigation canals. “There may be environmental costs to an environmentally beneficial project, which must be considered and assessed,” the court ruled. The project was the first one approved under the North Central Valley Conservation Reserve Enhancement Program. Five years ago, the conservation board and other state agencies negotiated the purchase of a conservation easement on farmland owned by Leroy Traynham III adjacent to a 2,700-acre corridor of wetlands and riparian habitat along Ridge Cut Slough. The property is zoned “exclusive agriculture” and it has been used to grow rice, row crops and Sudan grass. The property is covered by a Super Williamson Act contract, which provides tax breaks in exchange for the property not being developed for 20 years. The conservation easement incorporated a waterfowl habitat management plan that called for extensive groundwork. The plan called for reconstructing existing levees in a meandering fashion, constructing interior levees, building or improving ditches to facilitate flooding of individual wetland units, installing water control structures, constructing other channels and swales, building higher mounds, and planting tules, willows and cottonwoods. The work was estimated to cost $111,000 and would result in 145 acres of seasonal and permanent wetlands, and 80 acres of uplands. The Department of Fish and Game (DFG) declared the project exempt from CEQA. The conservation board approved the project in February 2002 and filed a notice of exemption a few days later. The California Farm Bureau Federation sued the state agencies, the county and Traynham, alleging violations of CEQA and the Williamson Act. The county filed a cross-complaint alleging violations of the Williamson Act and county ordinances. Colusa County Superior Court Judge John Tiernan then issued a preliminary injunction blocking the project. After the state and Traynham amended the conservation easement to permit commercial grazing, the county dropped its Williamson Act suit but raised new issues related to CEQA. Judge Tiernan consolidated the Farm Bureaus and countys lawsuits and ultimately ruled the project was not exempt from CEQA. The court also awarded the Farm Bureau and the county attorney fees. The state appealed, but lost again at the Third District. During the administrative process, the state relied on a Class 13 exemption in CEQA Guidelines § 15313, which exempts from environmental review projects that consist of the acquisition of lands for fish and wildlife conservation purposes. The state argued that the exemption applied even if the land were not in its natural condition. The appellate panel disagreed. “The language simply does not stretch to cover acquisitions for the purpose of physically constructing or creating and actively managing new wildlife habitat,” Justice Tani Cantil-Sakauye wrote for the court. “ he property has been actively farmed, growing row crops, rice and most recently Sudan grass. It is not existing wetland habitat. The purpose of the acquisition is to convert the property into a habitat, not to preserve a natural condition or .” The state also argued the project was eligible for a Class 4 exemption for minor alterations to land, a Class 25 exemption for transfers of land ownership to preserve open space or habitat, and a “common sense” exemption because a change in land use from agriculture to wildlife habitat is not an adverse environmental impact. The court rejected all three arguments. “ undamentally, the Class 4 exemption applies to only ‘minor’ alterations, which this project is not,” Cantil-Sakauye wrote, citing the management plan’s lengthy list of grading and drainage improvements. “The work will clearly alter existing drainage patterns and elevations of the land. It will change the nature of the land from level fields to wetlands. This is not a ‘minor’ physical alteration to the land.” The Class 25 exemption does not apply because it does not cover the management plan component of the project. The common sense exemption does not apply because the project “is not a mere passive change in use.” The project involves use of heavy equipment, and legitimate questions have been raised about the amount and source of water for the wetlands, the court determined. In an unpublished portion of the opinion, the Third District upheld the lower court’s award of attorney fees under the theory that the lawsuit affected public policy and benefited the general public. “ ll parties, including the state agencies, viewed this first project as a general test of the agencies’ position that projects changing agricultural land to wildlife habitat are exempt from the environmental review requirements of CEQA,” Cantil-Sakauye wrote. “This litigation has resulted in a ruling that, at least as to projects in material respects similar to this one, the DFG and WCB must undertake at a minimum an initial study under CEQA.” The Case: , No. C049919, 06 C.D.O.S. 9057, 2006 DJDAR 12962. Filed September 21, 2006. The Lawyers: For the Farm Bureau: Alan Bick, Gibson, Dunn & Crutcher, (949) 451-3800. For the conservation board: Deborah Wordham, attorney general’s office, (916) 445-9555. For Colusa County: Timothy Taylor, Somach, Simmons & Dunn, (916) 446-7979.

In a ruling from the Sonoma County wine country, the Ninth U.S. Circuit Court of Appeals has apparently signaled its intent to continue with a broad reading of the Clean Water Act. The court ruled that the Clean Water Act’s provisions apply to a pond in an old gravel pit that is separated from the Russian River by a man-made levee. The decision marks the Ninth Circuit’s first interpretation of the recent U.S. Supreme Court ruling in , 126 S.Ct. 2208 (see , July 2006). In that case, the high court divided 4-4-1 over the reach of the Clean Water Act (CWA), with Justice Anthony Kennedy authoring a concurring opinion that fell between the four-vote blocs. “In a 4-4-1 decision, the controlling opinion is that of Justice Kennedy who said that to qualify as a navigable water under the CWA, the body of water itself need not be continuously flowing, but that there must be a ‘significant nexus’ to a waterway that is in fact navigable,” Ninth Circuit Chief Judge Mary Schroeder wrote. In the case filed by Northern California River Watch against the City of Healdsburg, the Clean Water Act applies because “pond waters seep directly into the navigable Russian River,” the court ruled. The decision, which pleased many environmentalists, has spawned a great deal of analysis and commentary by water and land use lawyers. Property rights attorney Michael Berger of Manatt, Phelps & Phillips argued in a column that the Ninth Circuit was wrong to base its decision on Justice Kennedy’s concurring opinion in . The Ninth Circuit, Berger wrote, improperly ignored the other four justices with whom Kennedy joined in overturning a lower court’s decision to support the Army Corps of Engineers’ broad reading of the Clean Water Act. In a response op-ed, Norman Dupont, of-counsel at Richards, Watson & Gershon, wrote, “ hat the Ninth Circuit did in was a practical counting of the actual votes: the Stevens group had four votes for a broad reading of the Clean Water Act. Kennedy was a fifth vote supporting a reading of the Clean Water Act to allow for imposition of federal jurisdiction and regulation of a wetlands area as long as there was a convincing showing of an actual connection between the wetlands or pond area and a navigable waterway.” In an advisory, attorneys at Weston, Benshoof, Rochefort, Rubalcava, MacCuish would only say that “it remains to be seen whether other circuits” will adopt Kennedy’s significant nexus test. The issue for lawyers is what to do when the Supreme Court essentially casts a tie vote, as it did in . In that case, Justice Antonin Scalia and three others voted to significantly narrow the Corps of Engineers’ power to regulate activities affecting wetlands. They contended the Clean Water Act extends only to navigable waters and continuously flowing surface waters with direct connections to navigable waters. However, Justice John Paul Stevens and three others voted to uphold the Corps’ current regulatory approach that covers many types of surface waters and wetlands. Kennedy cast the pivotal vote with the Scalia bloc to overturn the Sixth Circuit decision for the Corps. However, Kennedy’s concurring opinion rejected both the Corps’ existing, broad regulations and Scalia’s narrow statutory interpretation. Under , 430 U.S. 188 (1977), when the court is fragmented, “the holding of the court may be viewed as that position taken by those members who concurred in the judgments on the narrowest grounds.” In the River Watch decision, Chief Judge Schroeder cited in determining that Kennedy “provides the controlling rule of law.” The facts on the ground are more straightforward. Basalt Rock Company began excavating gravel and sand from a site near the Russian River during the late 1960s. The resulting pit, known as Basalt Pond, is one-half mile long and one-quarter mile wide, and it fills with water from an underground aquifer. Although a levee separates the pond from the Russian River, there is little dispute that water in the pond drains into the shared aquifer and infiltrates the river. In 1978, the City of Healdsburg began discharging treated wastewater into Basalt Pond. Although the city received a state permit, it did not obtain a National Pollutant Discharge Elimination System (NPDES) permit. The federal Environmental Protection Agency issues NPDES permits to enforce the Clean Water Act. In 2001, River Watch sued the city, arguing that it was violating the act by discharging into the pond without a NPDES permit. District Court Judge William Alsup ruled for the environmental group. The Ninth Circuit, which appears to have waited for the decision to come down, upheld Alsup. According to the Ninth Circuit, the leading case on wetlands regulation under the Clean Water Act remains , 474 U.S. 121 (1985). In that case, the Supreme Court ruled that “the relationship between waters and their adjacent wetlands provides an adequate basis for a legal judgment that adjacent wetlands” may be regulated as “waters of the United States.” Justice Kennedy’s significant nexus test in and an earlier decision that narrowed the Clean Water Act, , 531 U.S. 159 (2001) (see , May 2001), have only clarified , according to the Ninth Circuit. “ t is apparent that the mere adjacency of Basalt Pond and its wetlands to the Russian River is not sufficient for CWA protection,” Schroeder wrote. “The critical fact is that the pond and navigable Russian River are separated only by a man-made levee so that water from the pond seeps directly into the adjacent river. This is a significant nexus between the wetlands and the Russian River and justifies CWA protection under the ACOE regulations and current Supreme Court jurisprudence.” “Moreover,” Schroeder continued, “there is an actual surface connection between Basalt Pond and the Russian River when the river overflows the levee and the two bodies of water commingle.” Healdsburg sought a Clean Water Act exception for waste treatment systems. However, the court ruled that the exception applies only to self-contained treatment systems or waters that are incorporated into an NPDES permit. Neither of those conditions applied here. The Case: , No. 04-15442, 06 C.D.O.S. 7301, 2006 DJDAR 10537. Filed August 10, 2006. The Lawyers: For River Watch: Charles Tebbutt, (541) 485-2471. For Healdsburg: Peter McGaw, Archer Norris, (925) 930-6600.

Two rivers that have been dry for decades because of 20th Century water diversions may flow again thanks to some reverse engineering. However, while restoration of the Owens River does appear to be proceeding, returning the San Joaquin River to a year-round waterway is anything but guaranteed. Although the City of Los Angeles continues to battle environmentalists and Inyo County in court, Los Angeles earlier this year began work on a project that will send water to a 62-mile stretch of the Owens River. The city’s Department of Water and Power faces a July 31, 2007, deadline to finish the plumbing project. While the fate of the Owens River — or at least the plight of the hapless landowners and politicians in the Owens Valley — has been broadly known since 1974, when Roman Polanski directed Jack Nicholson, Faye Dunaway and John Huston in “Chinatown,” the diversion of the San Joaquin River to Central Valley farmers has not received widespread attention. Considering the obstacles that the San Joaquin River restoration project faces, a Hollywood classic couldn’t hurt the effort. In September, the Bureau of Reclamation, the Natural Resources Defense Council and the Friant Water Users Authority announced that they had settled an 18-year legal dispute over the operation of Friant Dam and would return salmon to the river. The bureau operates the 60-year-old dam on the San Joaquin River, about 20 miles north of Fresno. The NRDC has spearheaded conservationists’ and fishing group’s lawsuits over dam operations. The Water Users Authority is a collection of 22 southern valley water agencies that get water from Millerton Lake, behind Friant Dam. Under the settlement, the Bureau of Reclamation agreed to operate the dam so that there would be continuous water flows in the San Joaquin River between Friant Dam and the Merced River, near the town of Patterson. For decades, about half of that 150-mile stretch of the San Joaquin has been dry except for the occasional surge of flood waters. Friant contractors would pay $7 per acre-foot of water annually into a restoration fund for channel and structural improvements. To ensure adequate water for the farms and cities that rely on diversions from Friant, the settlement calls for development of a water management program that includes water recycling, reuse and new exchanges or transfers. The settlement was announced on the steps of the federal courthouse in Sacramento and earned endorsements from both House Water and Power Subcommittee Chairman George Radanovich (R-Mariposa) and Democratic Sen. Dianne Feinstein. Radanovich called the settlement “a momentous step.” However, the settlement will go nowhere without the approval of Congress, and any party to the settlement could kill the agreement if Congress doesn’t act before year’s end — meaning that lawmakers would have to pass something during a lame-duck session after the November election. Although federal officials and the boards of 22 water districts agreed to the settlement, plenty of opposition exists, led by U.S. Rep. Devin Nunes (R-Visalia). He represents much of the area irrigated and plumbed by Friant water and contends that the river project could hurt farmers dependent on federal water. “I think this is a gross misuse of public funds,” Nunes told the . “You’re going to spend $800 million to bring back some fish?” In fact, both the cost of the project and the funding for it remain at issue. The project is estimated to cost $250 million to $800 million, depending largely on how much flood control levee work is necessary. Opponents such as Nunes doubt even the larger figure. If Congress approves, the federal government would contribute $250 million to the project, while water customers would pay at least $300 million via annual fees. The settlement also anticipates the state will contribute at least $100 million either from the $5.4 billion Proposition 84 bond for water, parks and coastal resources, or from the $4 billion Proposition 1E bond for flood control, according to Bureau of Reclamation spokesman Michael Jackson. At this point, only the fee revenue is assured. Farmers along the dewatered stretch of river have raised flood control concerns, as have local districts responsible for providing flood protection. Other farmers who have voiced support for the legal settlement say they can back only a project that returns salmon to the river on an experimental basis — a potential hitch in Congressional negotiations. Still, the existence of the settlement after 18 years of courtroom battles suggests the project may go forward. Jackson said planning, design work and environmental reviews have already begun, and interim flows for experimental purposes are scheduled to begin in 2009. The Owens River litigation is even older, having produced no fewer than six published court decisions since the early 1970s, including the landmark , 32 Cal.App.3rd 795 (1973), in which an appellate court ruled that Los Angeles’ continued extraction of groundwater from the Owens Valley required an environmental impact report. In fact, Superior Court Judge Lee Cooper cited that case last year when he imposed a fine of $5,000 per day on Los Angeles because the city failed to complete the Lower Owens River project by a court-ordered September 2005 deadline. Originally proposed in 1991, the project calls for restoring 62 miles of river and riparian habitat as mitigation for the city’s pumping of groundwater. The approximately 18,000 acre-feet of water needed for the river restoration would come from Los Angeles’s usual exports. In September, lawyers for the Department of Water and Power and for the Sierra Club argued before the Fourth District Court of Appeal. At issue was Cooper’s decision to prohibit Los Angeles from using a second Owens Valley aqueduct unless it completes the Lower Owens River project. The Fourth District had earlier issued a tentative ruling saying it would uphold Cooper; a final decision is expected soon. “The injunction, I think, has had an obvious effect,” said Sierra Club attorney Laurens Silver, who noted the city began work on the delayed project after Cooper’s ruling. “They should have implemented mitigation for this 32 years ago.” The latest arguments may be academic, though, as the city is reportedly on schedule to start directing water into the dry riverbed in early 2007. The ambitious project calls for restoring the entire riparian system, including a delta at Owens Lake, where the city is already implementing a large-scale dust control project by turning the dewatered lake into wetlands and grasslands. Contacts: Bureau of Reclamation South-Central California office, (559) 487-5116. San Joaquin River settlement: http://www.usbr.gov/mp/mp140/SJRSI/index.html Laurens Silver, Sierra Club, (415) 383-7734.

Preservationists have won at least a temporary victory regarding a big-box home improvement store that is proposed for the site of an historic IBM building in San Jose. The Sixth District Court of Appeal upheld a trial court’s decision to reject the City of San Jose’s environmental impact report for a proposed Lowe’s Home Improvement Warehouse because of an inadequate analysis of a reduced-size project alternative. The city had accepted Lowe’s contention that any modification to the proposed 162,000-square-foot, single-story, rectangular structure with an adjacent surface parking lot was not feasible. But the Sixth District ruled, “Neither the FEIR nor the administrative record contains any meaningful detail or independent analysis of the validity of Lowe’s claim that the reduced-sized alternative is infeasible, and the City Council made no specific finding validating that claim.” More than three years ago, Lowe’s proposed one of its standard big boxes for an 18.75-acre site owned by IBM near Poughkeepsie and Cottle roads in south San Jose. The site contains Building 025, a 69,000-square-foot structure consisting of five wings connected by a narrow spine. Constructed during the mid-1950s, the building is considered an excellent example modern industrial architecture. In addition, IBM engineers invented the “flying head” disk drive, a major advance in computer technology, in Building 025. Lowe’s proposed to demolish Building 025. The company would build its store, garden center and parking lot on 13 acres, and later develop additional retail space on the rest of the site. The San Jose Planning Commission voted to certify the EIR, but the Preservation Action Council (PAC) appealed to the City Council. The preservation group argued that the EIR did not consider project alternatives that would allow Lowe’s to build a full-sized store and garden center while still preserving Building 025. The City Council denied the appeal, certified the EIR and approved the project. Preservationists then filed a lawsuit alleging the city had violated the California Environmental Quality Act (CEQA) by failing to analyze a reasonable range of alternatives, not adopting reasonable mitigation measures and alternatives, and not responding to comments suggesting feasible alternatives. Santa Clara County Superior Court Judge Leslie Nichols ruled for PAC, finding that there was not substantial evidence to reject a reduced-scale project alternative, that an alternative presented by PAC was “substantially different” from alternatives in the EIR and deserved study, and that the city had not adequately responded to comments. In an appeal filed by Lowe’s, IBM and the city, the Sixth District affirmed the trial court’s decision. The EIR had included a “project design alternative” that provided the square footage desired by Lowe’s but in a two-story configuration. The EIR also considered a couple variations of a “reduced-scale” store of 94,000 square feet. All of the alternatives would allow for retention of most or all of Building 025. Lowe’s responded that it has only two project sizes — 162,000 square feet and 137,000 square feet — and that it builds only single-story facilities with surface parking. Because San Jose is a large city, it must have the 162,000-square-foot model. Anything else would be infeasible because it would put Lowe’s at a competitive disadvantage, the company contended. The city apparently accepted Lowe’s contentions at face value. The City Council, which addressed only the two-story alternative, found that the project would cause “significant and unavoidable” impacts to historic resources but that no feasible alternatives had been proposed. The council also adopted findings of overriding consideration based on the project’s economic benefits. The Sixth District found the city’s approach lacking. “The sole basis mentioned in the FEIR to support the proposition that the reduced-size alternative was infeasible was Lowe’s belief that a smaller store would place it at a ‘competitive disadvantage’ in a ‘large market such as San Jose,’ due to its inability ‘to meet the demands and requirements of a large market store in terms of throughput and merchandise availability,’” Justice Nathan Mihara wrote for the court. “The mere fact that an alternative might be less profitable does not itself render the alternative infeasible unless there is also evidence that the reduced profitability is ‘sufficiently severe as to render it impractical to proceed with the project,’” Mihara continued, citing , (1988) 197 Cal.App.3d 1167, 1181. “The administrative record does not contain any evidence that the reduced-size alternative would be so much less profitable and produce so many fewer tax dollars that the project would be impractical.” The court also found that the EIR’s discussion of the reduced-size alternative was unclear because the size of the alternative was ambiguous. The court rejected PAC’s contention that its alternative was substantially different from those in the EIR, but the court agreed that the city’s responses to comments regarding alternatives “appear inadequate.” After the appellate panel issued its ruling, city officials said they would release a revised EIR this fall. The Case: , No. H028201, 06 C.D.O.S. 7205, 2006 DJDAR 10233. Filed August 8, 2006. The Lawyers: For PAC: Susan Brandt-Hawley, (707) 938-3908. For the city: Nora Frimann, city attorney’s office, (408) 277-4454. For Lowe’s: Arthur Friedman, Steefel, Levitt & Weiss, (415) 788-0900. For IBM: Ronald Van Buskirk, Pillsbury, Winthrop, Shaw, Pittman, (415) 983-1000.

Changes to redevelopment law that are short of sweeping but still significant enough to stir the industry won legislative approval this year. The measures tighten blight requirements, ease challenges to redevelopment decisions and potentially limit use of eminent domain, but the bills do not go as far as originally proposed. The redevelopment bills are probably the most significant land use bills passed by lawmakers during 2006, a year in which even modest housing, flood and environmental legislation failed. In fact, this was the quietest year for housing legislation in a while. Of course, lawmakers did pass a series of measures placing $37 billion worth of infrastructure and housing bonds on the November ballot. The redevelopment bills emerged from a series of legislative oversight hearings following the U.S. Supreme Court’s decision in , in which the court upheld use of eminent domain for economic development purposes. Because such an action could occur in California only under the guise of redevelopment, lawmakers focused on the Community Redevelopment Law and ultimately approved eight related bills. Throughout the session, redevelopment advocates continued to argue that did not change existing law in California and therefore the legislative response was unwarranted, even if politically inevitable. “It’s amazing to me that a case of such little legal significance should create so much political reaction,” said Brent Hawkins, general counsel of the California Redevelopment Agency (CRA). The cornerstone legislation is SB 1206, by Sen. Christine Kehoe (D-San Diego). According to a fact sheet from her office, the bill tightens the definition of “blight” by: • Requiring blight descriptions to contain “specific, quantifiable evidence.” • Requiring findings to be supported by “clearly articulated and documented evidence.” • Repealing an exception to blight finding requirements for antiquated subdivisions with small and irregular parcels. • Reinstating the ban on placing unblighted property into redevelopment project areas. • Mandating that land use findings link to local general plans and zoning standards. • Requiring local officials to document blight before merging redevelopment projects. “Kehoe correctly recognized that blight is the gateway to eminent domain by redevelopment agencies,” Hawkins said. The bill also increases state oversight by requiring local governments to send redevelopment plans and amendments in advance to the Department of Finance and the Department of Housing and Community Development for fiscal analysis and comment. The legislation also gives redevelopment opponents more time to challenge decisions via referendum or lawsuit, and eases the attorney general’s ability to intervene in those lawsuits. Although she amended her bill by decreasing some proposed requirements, Kehoe made clear that she thought some cities are abusing redevelopment and that the state — which backfills school districts that lose revenue to redevelopment agencies — should play a greater role. The California Redevelopment Association conceded that SB 1206 improved during negotiations. Still, in an analysis, the CRA stated, “Certain provisions changing and restricting the definition of blight and adding unnecessary, duplicative bureaucratic layers to the redevelopment process are objectionable to CRA.” Another Kehoe bill, SB 53, and SB 1809 (Machado) require redevelopment agencies to be clear up front about the possible use of eminent domain, while SB 1210 (Torlakson) alters the eminent domain process for all public agencies, in part by making it more difficult for agencies to obtain possession prior to a court decision on compensation. In contrast to the redevelopment reforms, a package of eight flood bills failed to escape the state Senate. Among the bills was AB 1899 by Assemblywoman Lois Wolk (D-Davis), which would have barred new development in areas lacking 100-year-flood protection and in areas that would not soon have 200-year protection. Other bills would have required cities and counties to share liability with the state for new levees (AB 1528 — Jones), and would have required cities and counties to consider flood protection when writing general plans (AB 802 – Wolk). The failure of the flood bills was a “big loss,” said Planning and Conservation League Executive Director Gary Patton, because there is a need to prevent additional flood-prone development. Patton’s group and other environmentalists worked hard on AB 1899. In fact, said Patton, there was little opposition in the Legislature to AB 1899. Instead, the bill stalled when Senate President Pro Tem Don Perata (D-Oakland) held it up, saying that he did not want to rush a major policy change. More than a few people noted that Perata held up AB 1899 and other flood bills opposed by the California Building Industry Association (CBIA) only days after the group donated $500,000 to a campaign committee controlled by Perata. “It was an effort by the building industry — on behalf of a few developers who are ready to get their entitlements in the next few years — to delay things,” Patton charged. Perata denied there was any connection between stalling the legislation and campaign contributions, and CBIA Vice President Tim Coyle said Wolk’s legislation “was just a blunt, unabashed assault on housing.” The debate should be about public safety and infrastructure, not about growth, Coyle contended. “This got started off on the wrong foot. It started out as a growth-control measure,” Coyle said. “If we don’t build one more home, there is still a risk of flooding in Sacramento and in Stockton.” Coyle said the various factions have a lot more in common regarding flood safety than people realize. “The homebuilders are for getting to 200-year flood protection,” he said. But bills that attack new housing and nothing else are not helpful, he contended. Wolk agreed that more needs to be done to protect people already living in harm’s way. But, she said, new subdivisions only compound the problem. “We continue to build in places that were under three feet of water or more twice in the last 20 years. We should just stop,” Wolk said. “There’s not enough public money in the world to fix a 19th Century levee system. And, besides, the public shouldn’t have to subsidize private speculation.” The disaster wrought by Hurricane Katrina provided lawmakers with an opportunity to address flooding issues in the Central Valley, where an estimated 500,000 people live in areas lacking 100-year flood protection. The Assembly approved eight bills that sought to discourage new development in flood-prone areas, improve planning and increase public notification, but the Senate never voted on the legislation. “The BIA was able to drive a wedge between the Legislature’s members, and the governor sat on the side and watched,” Wolk charged. The failure of a flood bill package means the state lacks updated policies for spending the $4 billion contained in Proposition 1E, lamented both Wolk and Patton. The state could end up spending the money immediately without addressing the land use patterns that have helped cause the problem, Patton said. Besides supporting the flood bills, environmentalists largely played defense against bills to overhaul the California Environmental Quality Act (CEQA), said Bill Allayaud, state legislative director for the Sierra Club. High on the hit list was SB 1800 (Ducheny), a multi-faceted bill backed by the Schwarzenegger administration and the CBIA aimed at easing housing development. “They basically were trying to drive a truck through CEQA,” Allayaud charged. “You could have this broad, sweeping EIR, and then 15 years later somebody could propose a subdivision and say the review has already been done.” The bill would have eliminated subsequent environmental review of projects that comply with a required “housing opportunity plan” that was the subject of an environmental impact report. But the CBIA’s Coyle said the CEQA provision was “a non-issue.” “CEQA has become kind of the third rail in California. You can’t even utter the words without people overreacting,” Coyle said. Instead, the heart of SB 1800 was a provision requiring cities to identify land to meet the need for 20 years worth of new housing, and zone land for 10 years of housing. “It’s a real simple idea that if we grow by a certain amount in these communities around the state, you’ve got to identify the land,” Coyle said. The bill emerged from lengthy talks between the CBIA and the League of California Cities. Ultimately, though, the league’s board voted not to support the legislation. The concept of a 20-year housing plan is not a bad idea, said Sande George, lobbyist for the California Chapter of the American Planning Association. But there were problems with SB 1800, especially the lack of funding to do the required planning and document updates, she said. “It was a huge change in planning law and would have cost an awful lot of money to implement,” George said of AB 1800. Both the CBIA and SB 1800 author Sen. Denise Ducheny (D-San Diego) have indicated they will try again next year with a 20-year housing plan mandate. Probably the most significant housing bill that did pass was AB 2511 (Jones). The bill includes a number of measures intended to strengthen anti-discrimination laws. It also requires local governments to decide within 90 days on a project if at least 49% of the units are affordable to very low- or low-income households, and limits conditions local governments may impose on housing developments. Additionally, the bill permits courts to sanction cities and counties for not filing annual general plan status reports — something that many cities and counties do not submit every year. League of cities lobbyist Bill Higgins said the final provision is a “poison pill” for cities. “This comes on the tail end of a lot of changes in the housing element law mandating a lot of new requirements. It’s death by 1,000 cuts,” he said. Although the league opposed AB 2511, Higgins conceded that bill language regarding permit streamlining is helpful because it actually defines an affordable housing project. Housing advocates favored AB 2511, although their support tempered over the months while the author, Assemblyman Dave Jones (D-Sacramento), reduced the scope of what started out as a very broad bill. Another bill that evolved greatly during the session was SB 1627 (Kehoe), regarding wireless telecommunications antennas. The bill started out as an industry-backed vehicle to eliminate virtually all local regulation of antennas. By the time lawmakers passed it, SB 1627 provided useful guidelines for regulation and for the application of CEQA, said Jonathan Kramer, a consultant to cities on antenna issues. “The original bill was just awful in terms of what would have been its impact on local governments and their ability to plan,” Kramer said. As passed, though, the bill requires carriers to be up front about their intentions for wireless facilities; otherwise, they have to start the environmental review process anew. “This will actually bring some clarity and some new options to cities and to carriers as to long-term site planning,” Kramer said. A bill that received a great deal of worldwide attention may ultimately be the most important land use bill of the year, according to Patton, of the Planning and Conservation League. The bill is AB 32 (Nunez) and it calls for California to reduce greenhouse gas emissions. Its approval by Gov. Schwarzenegger marked a sharp split within the Republican Party. The bill does not address land use directly, but curbing auto-dependent, low-density sprawl is an obvious way to limit emissions, Patton said. “This pattern of development is the antithesis of what we need to reduce global warming emissions,” Patton said. “We think AB 32 will ultimately be a driver of better land use.” Contacts: Tim Coyle, California Building Industry Association, (916) 443-7933. Assemblywoman Lois Wolk, (916) 319-2008. Gary Patton, Planning and Conservation League, (916) 444-8726. Bill Higgins, League of California Cities, (916) 658-8200. Sande George, California Chapter of the American Planning Association, (916) 443-5301 John Kramer, Kramer Firm, Inc., (310) 473-9900.

A plan that would overhaul the San Diego Bay waterfront in Chula Vista with a convention center, large hotels, as many as 2,000 housing units in towers up to 17 stories tall, and extensive parkland may be headed toward final approval after more than three years of work. The Chula Vista Bayfront master plan prepared by the Port of San Diego — which controls most of the land in the area — and the City of Chula Vista would remake what has been a mostly industrial waterfront with rather limited public access. “The whole goal of this is to get people down there,” summed up Laurie Madigan, assistant city manager for special projects. “It’s going to be a world-class waterfront,” said Richard Campbell, of Pacific Companies, which plans to develop the housing component. “I think everybody wants it.” Although the plan covers 550 acres of land, coastline and wetlands, two tightly concentrated projects are dominating the discussion. One is Gaylord Entertainment’s proposal for a 400,000-square-foot convention center, up to 2,000 hotel rooms, and ancillary restaurant and retail development on about 33 acres. The other involves a swap between the port district and developer Pacifica in which Pacifica would trade all or part of 120 acres of land next to a wildlife refuge for about 35 acres of brownfields owned by the port. Pacifica would then develop up to 2,000 housing units in the form of townhouses and mid- to high-rise condominiums. Pacifica also plans a 250-room hotel and up to 300,000 square feet of office space. Elsewhere in the master plan area would lie approximately 230 acres of parks and open space, a promenade, an improved harbor, and additional hotel, office and restaurant development. Although the city and port district began the planning process in 2003, they still have a long ways to go. The draft environmental impact report for the plan came out at the end of September, kicking off what could be a lengthy adoption process. The city and port district must work out financial agreements with Gaylord and Pacifica. The State Lands Commission must approve the swap between Pacifica and the port district. The Coastal Commission must bless the master plan, which would then allow the port district and city to issue actual development permits. And industrial brownfields, which have not been fully evaluated yet, must be cleaned up. Indeed, much of the site lies in a city redevelopment project area with an industrial past. A former 80-acre BF Goodrich Aerostructures Group campus that the port district now owns and the aging South Bay Power Plant are predominant. All of that will go away to make room for new development. Six years ago, Pacifica began planning to develop its land with up to 3,400 housing units, hotels, offices and retail space. The project met strong opposition from environmentalists because of the site’s sensitive location next to Sweetwater Marsh National Wildlife Refuge and Chula Vista Nature Center. As Pacifica began revising its project with fewer units, the port district started a master planning effort for its 420 acres. At environmentalists’ urging, the two planning processes were combined. However, the port’s land is state tidelands, which means it is limited to water-related uses such as shipping and energy production, tourism, navigation, environmental protection and recreation — but not housing. So city and port planners, with the assistance of a 30-member citizens advisory committee and the design firms Carrier Johnson of San Diego and Cooper, Robertson & Partners of New York, began work on a site design that ignored ownership. The idea was to choose the best design and work out ownership details later. They ended up designating three districts: The largely undeveloped Sweetwater District next to the wildlife refuge, a centralized Harbor District that would be heavy on visitor-serving uses, and the Otay District to the south, where housing would replace the power plant and other industrial uses. “Just as we were coming to the final process, we had a visit from Gaylord,” Madigan recalled of the first meeting with the developer in 2005. Gaylord Entertainment owns the Grand Ole Opry in Nashville and hotel/convention centers in the suburbs of Dallas and Orlando, and Gaylord is building a waterfront convention facility in Price George’s County, Maryland. In searching for a West Coast location, Gaylord looked at an eastern Chula Vista location in the massive Otay Ranch development. However, Madigan steered Gaylord to a 33-acre “event center” site proposed for the bay front’s Harbor District. Gaylord liked the waterfront idea but did not like the site, so the city and port district reworked the Harbor District plan to provide the company with an acceptable location closer to the bay. Two other developers — JMI Realty and Manchester Financial Group — also submitted convention center and hotel proposals, but they were smaller than Gaylord’s plan, Madigan said. In July, the city and port district signed a letter of intent with Gaylord under which the city and port district would provide up to $308 million for the project by committing revenues from hotel bed taxes, redevelopment tax increment and port leases. That amount is based on the need for $178 worth of infrastructure, plus $130 million needed to assist convention center construction, Madigan said. “The theory is that convention centers don’t make money, but they serve as a catalyst for redevelopment and for all of the other revenues we will receive,” Madigan explained. Randa Coniglio, area real estate manager for the port district, called the Gaylord project “the anchor for this plan. It provides the revenues for the public improvements that are needed.” Under the letter of intent, the city, port district and Gaylord have until May 2007 to reach a deal. Negotiations are ongoing. At the same time, the port and Pacifica are negotiating their land swap. Campbell said the company envisions about 1,700 units of condominiums and townhouses, as well as offices, and a hotel and retail space that would serve the convention center, which is something Gaylord wants. Campbell called the proposed park spaces “gorgeous” and said that the residential site offers great views. “Gaylord is the trigger that makes the entire project possible,” Campbell said. “I cannot think of anything negative that the Gaylord project does to our project. We feel we fit together very well.” Environmentalists have participated throughout the master plan process and, at this point, are not opposing the project. What sets the area apart is Chula Vista’s intact sensitive coastal habitat, including a large saltwater marsh, said Laura Hunter, a spokesperson for the Environmental Health Coalition and member of the master plan advisory committee. Past development proposals have not accounted for the natural resources in the way the master planning effort has. Still, Hunter is not ready to endorse the project until the port district and city decide on mitigation measures. She’s also concerned about Gaylord’s chosen development site. “We thought we had a plan. It got significantly changed,” Hunter said. “We don’t know how that is going to play out. We still have a ways to go.” Project proponents say development could start in 2008, but large coastal developments nearly always get delayed in permitting processes and litigation. “It’s the largest planning effort we’ve ever undertaken,” added the port district’s Coniglio. Contacts: Laurie Madigan, City of Chula Vista, (619) 691-5031. Randa Coniglio, Port of San Diego, (619) 686-7217. Richard Campbell, Pacifica Companies, (619) 296-9000. Bayfront master plan website: http://www.portofsandiego.org/projects/cvbmp/

The habitat conservation plan for the rapidly growing Natomas Basin in Sacramento and southern Sutter counties has been upheld by a state appellate court. The Third District Court of Appeal found that environmentalists had failed “to discredit the overwhelming evidence in support” of the habitat conservation plan (HCP) for the 53,000-acre basin. In its decision, the Third District repeatedly noted that a federal district court judge who had rejected an earlier version of the HCP has since upheld federal permits issued as part of the revised plan. The environmentalists who challenged the revised plan “have failed to demonstrate how the federal court’s analysis is faulty in the same way they fail to demonstrate the deficiencies in the volumes of evidence in support of the Department findings,” Justice Vance Raye wrote for the Third District. Located north of downtown Sacramento, the Natomas Basin provides the City of Sacramento’s major growth area (see , October 2005, September 1994, December 1992, June 1991). The basin also includes the Sacramento airport and portions of Sutter County where major growth has been proposed numerous times (see , December 2004, December 2002, November 1997, June 1995, July 1993, January 1993). However, the basin’s rice farms and open space are home to two endangered species, the Swainson’s hawk and the giant garter snake. In 1997, Sacramento adopted an HCP that permitted development to proceed in exchange for the developer-funded purchase of habitat elsewhere in the basin. In 2000, U.S. District Court Judge David Levi threw out the plan, primarily because not all parties required to implement the document had agreed to participate (see , June 2001). In 2003, a revised plan that included Sutter County was adopted. The policies in the revised plan, though, were essentially the same as in the 1997 original. The Natomas Basin Conservancy would use development fees to acquire 8,750 acres, equal to one-half acre for every acre of planned development. The conservancy would then manage the property specifically for the benefit of the endangered hawk and snake, and about 20 other species. Led by the Environmental Council of Sacramento (ECOS), environmentalists sued in state and federal court over the revised plan but lost at the trial court level in both venues. In its appeal of Sacramento County Superior Court Judge Gail Ohanesian’s decision, ECOS argued that the HCP was inadequate under both the California Environmental Quality Act and the California Endangered Species Act (CESA). In its opinion, the Third District boiled down environmentalists’ arguments to three assertions: The agencies failed to consider the impacts of a “joint vision memorandum of understanding” between the City of Sacramento and Sacramento County, as well as other potential development projects; mitigation measures are impermissibly unfunded, voluntary, unenforceable and infeasible; and the 0.5-to-1 ratio for land mitigation is inadequate. The court rejected all three assertions. In the months prior to revised HCP approval, the city and county adopted the memorandum of understanding (MOU) as a “roadmap” for future land use decisions. The MOU envisions development in Natomas Basin beyond the 17,500-acres contemplated by the HCP, but the agreement does not involve specific development proposals. Environmentalists argued that the MOU and general plan revisions that reflect the MOU had to be evaluated in the HCP’s environmental impact report. But the Third District said it was too early. “We agree with the trial court and the federal district court that an environmental analysis now of the unspecified and uncertain development that might be approved in the future under the joint vision MOU would be speculative, wasteful and of little value to the consumers of the EIR,” Justice Raye wrote. “Far too little is known about the scope, the location or the types of projects that might be proposed in the future to assist decision makers in evaluating any potential environmental tradeoffs.” Likewise, the court ruled, CESA does not require “wasteful speculation on potential projects yet to be conceived and described.” The court then turned to the mitigation measures. Environmentalists charged that the HCP assumes that large amounts of farmland will remain in agriculture, and that the maze of irrigation and drainage channels on which the snakes rely will remain in place even though the agencies that operate the channels are not parties to the HCP. But the Third District agreed with the federal court findings that the channels must remain open to drain farmland, that closure or filling of canals would require further federal review, that the HCP ensures water channels will remain connected, and that the Natomas Basin Conservancy will be able to influence decisions because the conservancy is a local water company shareholder. In addition, the HCP specifically states that it does not rely on the continuation of agriculture as a mitigation measure, the court noted. Regarding, the mitigation ratio, the court accepted the city and Sutter County’s conclusion that a one-for-one ratio was neither feasible nor necessary. The court also pointed out that the plan mitigates “in a variety of ways beyond the purchase of a half acre for every acre developed.” The plan requires the conservancy to manage habitat, and mandates pre-construction surveys to locate individual animals, avoidance of development within a mile of a hawk zone, the preservation and planting of nesting trees, and other measures. “Cognizant of their heavy burden to mitigate under both statutes, the city and Sutter fashioned an enormously comprehensive and integrated mitigation plan. Plaintiffs parse but one component from the integrated mitigation program, ignoring the broader context, the broader findings, and the broader evidence relied on by the agencies,” the court ruled. The court also rejected arguments regarding the adequacy of evidence to support the Department of Fish and Game’s CESA findings. “We will not arbitrate between scientists,” Raye wrote. The Case: , No. C049527, 2006 DJDAR 12175. Filed August 9, 2006. Ordered published September 11, 2006. The Lawyers: For ECOS: James Pachl, (916) 446-3978. For Sacramento: Clark Morrison, Morrison & Foerster, (916) 448-3200.

Lake Berryessa, a 30-square-mile federal reservoir in the hills northeast of the more famous Napa Valley, may be California’s most secret lake. But a new land use and management plan could change that by promoting a more high-end tourist activity than the lake has seen in the past. In fact, the very nature of the Lake Berryessa experience appears to be changing. The Lake Berryessa Visitor Services Plan adopted earlier this year by the Bureau of Reclamation calls for removal of about 1,100 mobile homes and recreational vehicles that are parked in seven “resorts” on federal land along the lakeshore, and erasure of many improvements built by the resort owners. In place of the trailer parks, the Bureau of Reclamation hopes to have private concessionaires develop facilities for short-term visitors, such as rental cabins, camping sites and possibly motels and other tourist facilities. The bureau’s record of decision “allows for the hospitality industry to suggest to us, based on their experience, what would work best in the concession areas,” said Pete Lucero, chief of recreation for the bureau’s Central California area office. The goal of the plan is to boost short-term visitor use of the 49-year-old lake, which now gets about 1.2 million visitors annually. “We expect to see a greater degree of recreational opportunities. We’re looking at a wholesale improvement for the general public,” said Lucero. “I believe that as more of the Bay Area population finds Berryessa to be a destination spot for more traditional activities, it (visitor use) will increase. And if it’s not an increase, it will be a more varied visitor population, rather than the same people returning every weekend.” However, the weekend regulars who own mobile homes, prefab houses, travel trailers and recreational vehicles in the resorts fought the new strategy throughout the administrative process. Their residences sit on federal property that is leased to contractors who have agreements with the federal government. Those seven contracts expire from 2007 through 2009. Under the approved visitor services plan, the owners must remove their residences from federal land at their own expense when the contracts expire, and the contractors must remove facilities and improvements that do not go along with new contracts. According to Hank Howard, head of the group Berryessa For All, about 200 people who live in the resorts full-time will lose their homes, and hundreds of other families who have been coming to the lake for decades are being kicked out. The group, which Howard says has about 750 members, is considering filing a lawsuit over the record of decision. “We think the document is highly flawed,” said Howard, who owns a manufactured home at the lake. The Bureau of Reclamation decision is arbitrary and capricious, and the agency is illegally taking private property, Howard charged. “One hundred percent of everything that exists in the seven resorts was permitted, inspected, reviewed and master planned by Napa County and the Bureau of Land Management,” Howard said. The vast majority of mobile homes at Berryessa are too old to be moved into other parks, so the bureau’s plan makes them less than worthless. Removal of the old units will cost upwards of $20,000 to $25,000 apiece, said Denise Trevor, a mobile home owner and Berryessa For All organizer. “We can’t just move these places,” she said. After six years of planning, environmental review and sometimes tense public meetings, federal officials have little patience for these arguments. A 2002 evaluation prepared for the bureau by Kleinfelder, Inc., found that infrastructure in the resorts, including water and wastewater systems, is in poor shape and needs extensive upgrades or replacement. Napa County officials agreed with the assessment. In a 2005 letter to the bureau, County Executive Officer Nancy Watt said the county “has recorded a history of assorted non-compliance issues, notice of violations, capacity failures, insufficient maintenance, missing or late inspection reporting and illegal discharges associated with a number of water and wastewater treatment facilities serving the concession areas at Lake Berryessa.” Many of the residences are not in any better shape than the infrastructure. Even Howard conceded there are as many as 400 “trailers that need to go.” Still, he said, it is unfair to lump together everyone as “exclusive long-term users” that are blighting the lake. Most of the trailers and mobile homes were moved onto the lakeshore during the 1960s and 1970s, and their precise administrative history is murky, although it may not matter much because there is no question they are located on federal land for which leases are about to expire. Napa County Conservation, Development and Planning Director Hilary Gitelman said the county has done no planning for the area because “it’s federal lands in federal jurisdiction.” “The main thing that the county has been concerned about all along is that the county spends a lot of resources out at the lake,” Gitelman said. The county estimates it spends $700,000 a year providing emergency services, health and safety services, and public works to the area. Supervisors in both Napa and Solano counties ended up endorsing the visitor services plan but there was some hesitation because of the housing unit removal. A number of trail advocacy, environmental and mountain bike groups also backed the project, saying it would encourage more use of the lake and surrounding federal lands while also increasing environmental sensitivity. And in her letter to the bureau, Napa County’s Watt wrote, “With Reclamation’s help, Lake Berryessa will become an asset for the citizens for Napa County for generations to come, rather than the liability that is has been for too long.” But that sounds like a harsh assessment to people like Trevor and Howard, who have been coming to their second homes on the lake for many years. “They paint the picture that there are trailers around the whole lake, which is ridiculous,” Howard said. The residences cover only about 4% of the shoreline, he said. “The problem with this whole thing is that at no time has any short-term user ever been turned away from the facility.” The bureau’s Lucero said officials are currently working on a prospectus for potential concessionaires. There is no strict timeline for the project because planned improvements are dependent on federal funding and the willingness of private investors, he said. Contacts: Pete Lucero, Bureau of Reclamation, (707) 966-2111. Hilary Gitelman, Napa County Department of Conservation, Development and Planning, (707) 253-4805. Hank Howard, Berryessa For All, (707) 645-8367. Visitor Services Plan website: www.usbr.gov/mp/berryessa

The California Supreme Court has recently accepted two land use cases and ordered an appellate court decision regarding fees to be depublished. One of the accepted cases permits the state high court to delve into the touchy issue of local authority over wireless telecommunications antennas. The second case involves an award of damages to the owner of an adult cabaret in San Bernardino who was subjected to an unconstitutional zoning ordinance. Exactly how far local governments may go in regulating antennas has been the subject of extensive litigation during recent years. In June, the Fourth District Court of Appeal upheld a San Diego County zoning ordinance that establishes a detailed permitting process for antennas — and said that a Ninth U.S. Circuit Court of Appeal decision striking down a similar ordinance in the City of La Cañada Flintridge was wrong (see , August 2006). The first question for the state Supreme Court is this: Do Public Utilities Code §§ 7901 and 7901.1 — which give “telephone corporations” the right to install lines and other fixtures in the public right-of-way — extend to wireless telecommunications providers? Lower courts have generally said yes. The larger controversy is over the second question for the state Supreme Court: Does a provision in § 7901.1 permitting local governments to control the ‘time place and manner’ in which telephone corporations access roads give a local government the ability to regulate the aesthetics of telecommunications towers in the public right-of-way? Cities and counties contend that they may use the § 7901.1 provision to regulate the location, height and appearance of antennas. Telecommunications companies argue that the state law does not extend to aesthetics. The case is , No. S145541. In the San Bernardino case, the owner of Flesh Night Club was awarded $1.4 million based on expenses and lost income from a 53-month period when the city enforced a zoning ordinance defining where adult businesses could locate. Although the club owner challenged the ordinance, the city got a court injunction permitting the city to enforce the ordinance. Flesh Night Club was in the wrong location under the ordinance, so the business closed. Eventually, the Fourth District ruled that the ordinance violated the First Amendment. The business owner sued for damages and a jury awarded $1.4 million, which the Fourth District upheld earlier this year (see , June 2006). The central question for the state high court is whether a city may be held liable for damages under the federal Civil Rights Act for obtaining a preliminary injunction to enforce an ordinance that is later found to be an unconstitutional impingement on free speech. The case is , No. S144492. The depublished case is , which appeared at 140 Cal.App.4th 261. In that case, the Fourth District upheld the city’s building inspection and plan check fees (see , August 2006). The ruling will stand, but it cannot be cited as precedent now.

CEQA • AB 1387 (Jones). Expands a CEQA exemption for urban infill to projects of up to 100 units with a minimum density of 20 units per acre. The projects also must be within half a mile of a transit stop and comply with the local circulation element. Signed by governor. • SB 832 (Perata). Expands an exemption for urban infill housing developments. Gutted. • SB 1191 (Hollingsworth). A major Republican overhaul of CEQA. Died. Flooding • AB 802 (Wolk). Requires cities and counties to account for flood safety in general plan updates. Died. • AB 1528 (Jones). Requires cities and counties to share flood liability with the state in areas protected by new levees. Died. • AB 1665 (Laird). The administration’s package, which includes requirements for levee evaluations, plans for levee upgrades and notification of property owners. Died. • AB 1898 (Jones). Requires property owners in Central Valley areas lacking 200-year flood protection to get flood insurance. Died. • AB 1899 (Wolk). Prohibits development on land that lacks 100-year flood protection and land that will not soon have 200-year protection. Died. • AB 2208 (Jones). Requires the state to identify landowners that benefit from levees, for the purpose of establishing fees. Died. • AB 2500 (Jones). Requires cities and counties to adopt safety plans as a condition of receiving money for levee upgrades. Died. • AB 3022 (Umberg). Increases flood insurance disclosure requirements. Died. General Plans • SB 44 (Kehoe). Requires all jurisdictions to adopt air quality elements that account for development patterns. Gutted. • SB 409 (Kehoe). Requires cities and counties to correlate the water supply portion of their conservation elements with their land use elements. Gutted. • SB 655 (Ortiz). Requires new mapping of areas with naturally occurring asbestos, identification of the areas in general plans, and disclosure to buyers if asbestos is present. Failed in Assembly. • SB 1059 (Escutia). Authorizes the California Energy Commission to designate electricity transmission corridor zones, and requires cities and counties to consider such zones when making land use changes. Signed by governor. Housing and Housing Elements • AB 350 (Matthews). Authorizes local governments in Alameda, Contra Costa, Santa Clara, San Joaquin and Stanislaus counties to create infrastructure finance districts in jobs-housing opportunity zones. Gutted. • AB 2158 (Evans). Requires regional housing needs assessments to consider local agency formation commission policies on growth. Vetoed by governor. • AB 2378 (Evans). Makes condominiums developed under density bonus provisions subject to a resale restriction to ensure affordability to moderate-income households. Died. • AB 2511 (Jones). Gives cities and counties 90 days to decide on projects in which at least 49% of units are for very low- or low-income households, bolsters anti-discrimination laws, and permits courts to sanction local governments for not filing annual general plan status reports. Signed by governor. • AB 2634 (Lieber). Requires housing elements to provide for households that have incomes of 30% of median. Signed by governor. • AB 3042 (Evans). Establishes a procedure for cities and counties to transfer shares of regional housing needs. Died. • SB 1322 (Cedillo). Requires cities and counties to make emergency shelters and group homes by-right uses in certain zones, and to account for emergency shelters in general plans. Vetoed by governor. • SB 1432 (Lowenthal). Amends the Mello-Roos Community Financing Act in multiple ways, including a provision that permits use of Mello-Roos bonds for affordable housing development. Vetoed by governor. • SB 1800 (Ducheny). Makes numerous changes to housing element law and CEQA to ease housing construction. Died. Redevelopment • AB 773 (Mullin). Increases from 30 days to 90 days the time in which voters may prepare a referendum of a redevelopment ordinance. Signed by governor. • AB 782 (Mullin). Removes as a basis for establishing a redevelopment project area the existence of small and irregular lots. Signed by governor. • AB 1162 (Mullin). Places a moratorium until 2008 on redevelopment agencies taking by eminent domain an owner-occupied residential property if the property is to be transferred to a private entity. Died. • AB 1893 (Salinas). Prohibits a redevelopment agency from using tax-increment financing to fund the development of a city hall or county administration building. Signed by governor. • AB 1990 (Waters). Prohibits use of eminent domain if the real property being acquired is to be transferred to a private entity. Died. • AB 2922 (Jones). Stiffens affordable housing covenants for subsidized projects and increases tenants’ rights. Vetoed. • ACA 22 (La Malfa), SCA 15 and SCA 20 (McClintock). Constitutional amendments to restriction use of eminent domain. Died. • SB 53 (Kehoe). Requires redevelopment plans to explain where, when and how officials will use eminent domain, and requires agencies to document blight before extending the time period for use of eminent domain. Signed by governor. • SB 1206 (Kehoe). An overhaul of the Community Redevelopment Law that tightens the definition of blight, makes it easier to file legal challenges and referendums, and increases state oversight. Signed by governor. • SB 1210 (Torlakson). Makes numerous changes to how all public agencies carry out eminent domain actions. Signed by governor. • SB 1329 (Alquist). Authorizes redevelopment agencies to award planning grants and other financial incentives to supermarkets and other grocers to assist with planning and building supermarkets in underserved areas. Amended and died. • SB 1650 (Kehoe). Restricts how agencies may use property taken by eminent domain. Signed by governor. • SB 1809 (Machado). Requires local officials to add information about possible use of eminent domain to required statements. Signed by governor. Other • AB 1020 (Hancock). Requires Caltrans and regional transportation agencies in most urban areas to prepare new transportation models that better account for land uses policies. Vetoed by governor. • AB 1766 (Dymally). Permits enterprise zones to request 25-year extensions. Died. • AB 1785 (Bermudez). Increases by $55 million annually the money available for railroad grade separation projects. Died. • AB 2223 (Salinas). Extends until 2104 expedited procedures for cities to annex unincorporated islands. Signed by governor. • AB 2762 (Levine). Permits 16 Indian tribes to join the Southern California Association of Governments. Vetoed by governor. • SB 625 (Battin). Authorizes the Department of General Services to offer surplus land to local governments at fair market value. Died. • SB 1230 (Florez). Creates a clean air enterprise zone within the San Joaquin Valley, requires the state to provide low-interest loans to certain clean businesses in the zone, and expedites permitting. Vetoed by governor. • SB 1523 (Alarcon). Requires cities and counties to prepare economic impact reports for proposed big-box retail stores. Vetoed by governor.

A local agency formation commission may impose as a condition on its approval of the incorporation of a new city the requirement that voters support a general tax funding the new city, the attorney general’s office has concluded. The question came from the San Diego County LACFO. With a couple incorporation drives in the works, the agency wanted to determine what conditions it could impose on formation of a new city, explained San Diego LAFCO Executive Officer Michael Ott. One possibility is having voters decide on both incorporation and a general tax at the same time, and requiring that the tax receive approval for incorporation to be valid. But, said Ott, “There had been some question as to whether a dual ballot question was legal.” Ott said the agency’s attorney had determined a dual ballot question was legal. With a very straightforward reading of the Cortese-Knox-Hertzberg Local Government Reorganization Act (Government Code §§ 56000 – 57550), the attorney general agreed. In the opinion, Deputy Attorney General Gregory Gonot noted that § 56886 permits LAFCOs to impose conditions on incorporations, including the levying of assessments and fees “or the approval by the voters of general or special taxes.” “General taxes constitute one of a ‘virtually limitless array of factors’ upon which a LAFCO may condition its approval of a change of organization,” Gonot wrote, citing , (1992) 3 Cal.4th 903, 912. Seven years ago, the attorney general concluded in 82 Ops. Cal.Atty.Gen. 180 (1999) that a LAFCO could condition approval of a change of agency organization upon the continued collection of previously established taxes. In that opinion, the attorney general concluded that the then-Cortese-Knox Act complemented — rather than conflicted with — the state constitution’s requirements for voter approval of general tax increases. In the question raised by the San Diego LAFCO, approval of the tax and incorporation would take place at the same time, which would be permissible, Gonot concluded. The San Diego LAFCO has not imposed such a condition on incorporation but is considering doing so for the proposed city of Rancho Santa Fe, Ott said. “It gives incorporation proponents another tool to achieve feasibility, especially in light of the revenue-neutrality requirements that have been in effect since 1992,” Ott said. The San Diego LAFCO also raised the question of whether the imposition of such a condition would require a two-thirds vote of the LAFCO board. Proposition 62, a 1986 follow-up to Proposition 13, requires that a resolution proposing a general tax be approved “by a two-thirds vote of all members of the legislative body of the local government.” Gonot concluded that the Proposition 62 provision would not apply here because “LAFCO does not have the authority to ‘impose’ a tax.” Instead, all LAFCO can do is condition formation of the new city on voters’ approval of a tax, he wrote. In a letter to Ott analyzing the attorney general’s opinion, San Diego Senior Deputy County Counsel William Dean Smith called the attorney general’s answer to the Proposition 62 question “reasonable but still subject to potential challenge should LAFCO not achieve a two-thirds vote of all its members in approving an incorporation subject to a general tax condition.” Attorney General’s Opinion 06-210 was issued August 11, 2006. It may be found at 06 C.D.O.S. 7473, and 2006 DJDAR 10697.

Should Californians vote to “protect our homes,” or should they vote against a “taxpayer trap?” This, in a nutshell, is the campaign about Proposition 90, the property rights initiative on the ballot in November. And, given the way initiative campaigns go in California, a nutshell is all the voters will ever debate. But in planning and development circles, the debate about Proposition 90’s impact is raging because there is little question that if Proposition 90 passes, it will be the most disruptive event in California planning since approval of Proposition 13 in 1978. Riding the post- wave, Proposition 90 supporters advertise the initiative as an anti-eminent domain measure that would limit the government’s ability to take homes. It would amend the constitution to narrow the use of eminent domain to uses involving public ownership. But Proposition 90 is also a regulatory takings measure. It would amend the constitution to require compensation for downzonings and other land use regulatory actions that result in “substantial economic losses” to a property owner unless public health and safety is at stake. Although the eminent domain provisions are strong, it is the regulatory taking provisions that cause concern among state and local government officials – especially because the supporters virtually never mention regulatory takings in their campaign. If Proposition 90 passes, said David Jones, a California Redevelopment Association lobbyist, “We may never see another general plan revision in California again.” Proposition 90 is one of six property rights initiatives on the ballot in Western states this year. Similar measures will appear on the ballot in Arizona, Idaho. Montana, Nevada, and Washington (see , August 2006). All use some variation of the “protect our homes” theme. All are backed and at least partly bankrolled by Americans for Limited Government ( www.getliberty.org ), a New York-based group led by libertarian Howard Rich. Whatever the odds of a “Protect Our Homes” initiative passing in Montana or Arizona, Proposition 90 appears vulnerable in California. Most Republican legislators have signed onto it, as have about two dozen local elected officials, including one Democrat, Orange County Supervisor Lou Correa. The Orange County Register and the Long Beach Press-Telegram have editorialized in favor of it. But the polls are close, and opponents claim that the more voters hear about Proposition 90, the more likely they are to oppose it. Furthermore, most major business and development groups are against it. And property rights have rarely gotten the same kind of traction in California that they get in other Western states. This list of opponents includes a number of surprises: the Chamber of Commerce, the California Building Industry Association (which represents homebuilders), the California Farm Bureau Federation (representing agricultural landowners, who own most of the private undeveloped land in the state), and the California Business Properties Association (which represents commercial and industrial property owners). In a prepared statement, Farm Bureau president Doug Mosebar said the initiative “threatens farmland-protection measures and ‘right-to-farm’ laws that prevent leapfrog development and protect family farms and ranches.” Rex Hime, president of California Business Properties Association, told the : “Because it deals with regulatory taking, this opens up so many cans of worms in the current land use process. …We think it will create a dysfunctional legal nightmare.” “Dysfunctional legal nightmare” may be a bit much, but there is little doubt that Proposition 90 would impose a huge set of changes on the regulatory system that would take years and many lawsuits to sort out – just as the passage of Proposition 13 did starting in the late ’70s. Proposition 90 would amend Article I, Section 19, of the California Constitution, which specifies that private property may be “taken or damaged” for public use, and then only when just compensation is paid. The measure would amend the Constitution to state that “private property may not be taken or damaged for private use.” In the context of eminent domain, the measure would specifically limit the use of the property acquired by eminent domain so that it would be “owned and occupied” by a public agency for the public use originally stated. If the public agency that acquired the property doesn’t use it for the “stated public use,” the original owner gets to buy it back at fair market value – and then the owner is permitted to reclaim his or her lower base tax year under Proposition 13. But Proposition 90 would define “public use” so that it is narrower than “public purpose,” and would specifically prohibit transfers of land obtained via eminent domain “to non-governmental owners on economic development or tax revenue enhancement grounds.” However, it would apparently permit private companies to operate, if not own, public facilities on land acquired by eminent domain. The measure specifically calls out privately operated toll roads and prisons as “public use.” (Such “privatization” is a favorite of the Reason Public Policy Institute in Los Angeles, whose parent foundation supports the initiative.) The value of property taken by eminent domain must be the highest value available based on the government’s intended use, and the value cannot be discounted based on the assumption that the government would impose exactions or require dedications of the property were it developed privately. For routine land use planning, the key provisions involve the definition of “damage” to private property. Under Proposition 90, the government cannot “damage” private property without compensation. The measure specifically lists downzoning, elimination of access to private property, and “limitations on the use of private air space” as examples. The measure also specifically exempts Public Utility Commission rate regulations, emergency situations, and nuisances such as “blight, obscenity, pornography, hazardous substances, or environmental conditions” but circumscribes those exemptions to individual parcels. The measure also exempts government actions taken to protect public health and safety. In essence, Proposition 90 would permit downzonings for health and safety, but not for public welfare. The key phrase is Proposition 90’s definition of damage – “substantial economic loss to private property.” The measure does not define a “substantial economic loss,” so one inevitable lawsuit would be a test case asking the California Supreme Court to provide a definition. In the meantime, local governments seeking downzonings could do an analysis concluding that no substantial loss is involved. In addition, it seems likely that local planning departments will stretch the definition of “health and safety” as far as possible, because most planning relies on public welfare as the primary justification for use of the police power. Many more land use restrictions may be passed by relying on floodplains, seismic hazards and the like. The final area of contention would likely be the nuisance exemption. Specifying “blight” as a nuisance that’s not subject to Proposition 90 opens the possibility that land use restrictions in redevelopment areas might be permissible, while the phrase “environmental conditions” opens another possible door for local governments. But the courts would have to decide how narrowly to interpret Proposition 90’s requirement that nuisance be limited to individual parcels. Would only blighted parcels in redevelopment areas be exempt? Would this mean that redevelopment agencies – currently battling against a similar impulse in the Legislature – have to define blight on a parcel-by-parcel basis? Would downzoning a particular parcel in order to reduce the amount of traffic being generated – thus alleviating problematic “environmental conditions” – be acceptable? No one knows at this point. And that is the biggest concern about Proposition 90: It is written so broadly that local governments would be encouraged to find creative end-runs, which would lead to years of litigation. Welcome to Proposition 13 redux.