In their effort to address the disproportionate health risk faced by working-class blacks and Hispanics, air-quality regulators in Southern California may soon find themselves playing a greater role in local land-use decisions — a prospect embraced by environmental justice advocates but alarming to many in the business community. Activists have long asserted that poor and minority communities are chosen disproportionately as the locations for polluting industrial operations such as power plants and truck yards, and recent research has provided statistical support for their assertions. A 2001 study by UCLA researchers found that communities surrounding the 100 largest toxic emitters in Los Angeles County had a higher proportion of racial minorities in their population than the countywide average. A 1995 study by Occidental College researchers found that racial minorities in Los Angeles County were three times as likely as whites to live within a half-mile of a toxic-waste disposal site. Suggested explanations for the pattern vary. Some activists point to racism. Others see it as a matter of varying political clout: Wealthy white communities are more likely than poor black and Hispanic communities to hire experts and attorneys to fight proposals for locally undesirable land uses. Some demographic analysts suggest that working-class residents naturally gravitate toward areas surrounding industrial employment centers, where jobs are plentiful, or that the relatively low real estate values that make sites attractive for industrial developments also mean low housing prices, drawing a high proportion of minorities simply because they tend to have lower incomes than whites. Whatever the reason for the pattern, activists now have statistical confirmation of their long-held suspicion, and they are pressing for regulatory relief. Increasingly, they are getting it, or at least being promised that something will be done. The U.S. Environmental Protection Agency (EPA) has had an Office of Environmental Justice since 1992, formed in response to pressure from the Congressional Black Caucus and other groups. The California Environmental Protection Agency established an environmental justice advisory committee two years ago, and Hispanic lawmakers have pushed through a succession of bills since 1999 directing the state to target pollution-reduction efforts at minority and poor communities. But it is in the area of air-quality regulation that California has taken the boldest steps. In December 2001, the state Air Resources Board (ARB) adopted environmental justice policies, committing the agency to gathering and disseminating data about the cumulative health risk posed to minority communities by various emission sources, from diesel trucks to factories. The policies also ensure that residents in disproportionately affected communities are involved in the public review of permit applications and require the agency to target pollution-reduction programs at minority and poor areas. The ARB policy document also contained this passage, which seemed to foreshadow a significant new role for air-quality regulators in the land-use arena: "We recognize that local agencies have a primary role in decisions affecting land use, community health and welfare. Local land-use and transportation agencies are directly responsible for the planning and siting of new air pollution sources, and local air districts also play an important role by issuing permits for new industrial sources of air pollution. As such, we are committed to working as partners with these agencies and other stakeholders to develop the technical tools and guidance necessary to consider the cumulative impacts of local sources of air pollution. The technical tools and guidance are intended to assist the local agencies in their planning and permitting actions, including the consideration of siting alternatives …" The South Coast Air Quality Management District (AQMD), which launched its own environmental justice initiative in 1997, has followed up on the state ARB's policy by drafting a set of proposals that could involve pollution regulators in land-use decisions throughout much of Southern California. The proposals are contained in a draft policy paper released in April, outlining the AQMD staff's proposals for reducing cumulative impacts from pollution sources in subregions of the district, which encompasses Los Angeles and Orange counties and parts of Riverside and San Bernardino counties. Traditional regulatory programs evaluate pollution sources one at a time, setting limits for single permit holders that are based on overall targets for the entire air basin. Acceptable average levels of pollution over an entire region, however, can mask substantial variations between neighborhoods with few emission sources and those with many sources. Environmental justice activists regard the evaluation of cumulative risks from multiple sources as a key strategy in reducing the disproportionate health risk borne by poor and minority communities. One of the options described in the AQMD policy paper is requiring developers of new housing subdivisions, schools, hospitals, day-care facilities, and convalescent homes to survey the proposed construction area and disclose to their clients every source of toxic emissions within 1,000 feet. School districts, for example, would have to send a letter home to the parents of every student each year containing that information. In theory, the notification requirement could apply even to sites near heavily traveled freeways, a prime source of polluting emissions in Southern California. "We think that could influence some land-use decisions," Jill Whynot, a planning manager for AQMD who is overseeing the cumulative-impacts process, told the Environment News Service (ENS). The notification requirement is one of nine options outlined in the policy paper. They are based on suggestions from state and federal regulators and an AQMD working group, which includes representative of industry, environmental organizations and community groups. Other options include stricter mitigations for projects proposed in areas with multiple emissions sources; neighborhood scoping sessions for projects under the California Environmental Quality Act (CEQA); and expedited AQMD and CEQA review for installation of new or modified equipment that would result in a net decrease of pollution in at-risk communities. Many details are still missing, reflecting the policy paper's preliminary state. So far, the disclosure requirement appears most likely to attract widespread attention. The staff report notes that the disclosure requirement might make for better-informed land-use decisions, but also "may have an unintended effect of restricting growth due to notification requirements or otherwise reducing access to needed services." Representatives of potentially affected industries are skeptical. "Public safety is a local responsibility," a consultant for the California Coalition for Adequate School Housing told ENS. "We're not trained to do that." After further review by the working group, the draft guidelines are scheduled to go to the AQMD board for possible action in October. State legislation would be required to authorize the notification program. Contacts: Jill Whynot, AQMD: 909-396-3104 AQMD's cumulative impacts program: www.aqmd.gov/rules/CIWG.htm ARB's Environmental Justice program: http://www.arb.ca.gov/ch/programs/programs.htm

The California Coastal Commission lost its jurisdiction over development of a proposed elementary school in Encinitas because the Commission did not determine within 49 days whether a "substantial issue" existed, the Fourth District Court of Appeal has ruled. The ruling appears to knock down a practice in which the Commission within 49 days of receiving an appeal sets a later hearing date without addressing any of the issues. In 1998, Encinitas Country Day School (ECDS) sought permission to build a 432-student private elementary school on 20 acres along Manchester Avenue, east of Interstate 5 and near the San Elijo Lagoon. The city prepared a mitigated negative declaration, and in late 1998 the Planning Commission and, on appeal, the City Council approved the project. On December 10, 1998, project opponents filed an appeal with the Coastal Commission contending that the project did not conform to the Encinitas local coastal plan.On December 17, Coastal Commission staff members issued a report stating that the city had not yet provided all relevant documents and recommending that the Commission open a public hearing at its January meeting (the Commission meets monthly) and then continue the matter to a later date. On January 13, 1999, the Commission opened the hearing and then promptly continued it to the February meeting without considering any of the issues. On February 4, 1999 — 56 days after the appeal was filed — the Commission decided it had jurisdiction and denied the project because it and the cumulative impact of other projects on Manchester Avenue conflicted with the city's certified local coastal plan. The school then filed suit, asking the court to overturn the Commission's decision and to provide relief for inverse condemnation. San Diego County Superior Court Judge Linda Quinn set aside the Commission's project denial because the Commission had not decided within 49 days whether a substantial issue existed, and because substantial evidence did not exist that the site was within the Commission's jurisdiction. San Diego County Superior Court Judge Thomas LaVoy heard the inverse condemnation part of the litigation. He called the December 17 staff report "unreasonable and arbitrary." But Judge LaVoy determined that the Commission was not bound by the staff report and that the situation did not meet "the extraordinarily high standard for determining that error by the Commission constitutes a regulatory-delay ‘taking.'" The Coastal Commission appealed the jurisdictional ruling, while the school appealed the inverse condemnation decision. A unanimous three-judge panel of the Fourth District, Division One, upheld the decisions of both trial court judges. The Fourth District published only the portion of its opinion addressing the 49-day rule. Public Resources Code § 30621, subdivision (a), requires that a "hearing on a coastal development permit application or an appeal shall be set no later than 49 days after the date on which the application or appeal is filed with the Commission." In the case of an appeal, if the Commission does not act within 49 days, the decision of the local government becomes final. The applicant may waive the 49-day deadline. The Commission argued that its procedure was allowed under Coronado Yacht Club v. California Coastal Com. , (1993) 13 Cal. App.4th 860 (see CP&DR Court Cases , April 1993). In that case, the court allowed the Commission to decide on a proposed dock extension more than 49 days after an appeal was filed. But the Fourth District said the Encinitas case was different. In Coronado Yacht Club , the Commission did decide within 49 days that a substantial issue existed. The Commission then postponed a hearing on the merits. But in the case at hand, the Commission considered none of the issues within 49 days. "In Coronado Yacht Club we approved a procedure where the Commission decided, at a minimum, whether it had jurisdiction within the 49-day period and specifically observed that a procedure like the one used here would be inconsistent with the Legislature's intent," Justice Judith McConnell wrote for the court. Because a determination regarding a substantial issue necessarily includes a determination regarding jurisdictional boundaries, "the question of whether the ECDS project was within the Commission's appellate jurisdiction because it was located between the first public road and the sea was required to be addressed at the January meeting," the court held. When the Commission failed to answer that question within 49 days, the Commission lost jurisdiction, the court held. The court also hammered away at the staff report urging delay because the city had not provided all relevant documents. The record indicated that the city delivered all relevant documents to the staff by the end of the day on December 17, only three days after being notified of the appeal, according to the court. In the unpublished part of its opinion, the court rejected the inverse condemnation claim. The court held that the Commission's position was not completely untenable, and, at any rate, the landowners could have pursued the sort of residential development for which the property was zoned. The Case: Encinitas Country Day School v. California Coastal Commission , No. D038323, 03 C.D.O.S. 3897, 2003 DJDAR 4977. Filed May 8, 2003. The Lawyers: For the school: Martin Mullen, Lewis, Brisbois Bisgaard & Smith, (619) 233-1006. For the Commission: G.R. Overton, deputy attorney general, (213) 897-2703.

The California Supreme Court has ordered the publication of another round in the litigation involving a doughnut shop owner and the City of Hawaiian Gardens. In an opinion issued in June 2002 — but not ordered published until late May of this year — the Second District Court of Appeal overturned a lower court, which dismissed the doughnut shop owner's inverse condemnation lawsuit. The appellate panel ruled that the shop owner should have had the opportunity to amend his lawsuit to prove his case. The court, however, did now determine whether or not the shop owner deserved compensation for inverse condemnation. Last year, the state Supreme Court ordered publication of the Second District opinion in a related case, , 101 Cal.App.4th 1317, (see , October 2002). In that case, the appellate court ruled that the doughnut shop owner, Veisna Kong, was eligible for relocation benefits as a "displaced person" even though he remained in business for six years on property the city acquired under threat of eminent domain. In this separate lawsuit alleging inverse condemnation, Kong sought damages for losing business goodwill, improvements to his shop and inventory. He also sought precondemnation damages, alleging the city behaved inappropriately before acquiring the property. The city acquired the property where Kong was the sublessee in 1993 and sold it the following year to Dr. Irving Moskowitz, who eventually developed a casino. Kong continued to operate his doughnut shop in the same location until late 1999, when Moskowitz evicted him so he could demolish the building and construct a parking lot for the casino. Los Angeles County Superior Court Judge Bruce Mitchell sustained the city's demurrer, indicating that he agreed with the city that Kong had not made enough of a case for the litigation to continue. Judge Mitchell refused to let Kong amend his complaint and the judge dismissed the lawsuit. Kong appealed and the appellate panel overturned Mitchell. Kong "has demonstrated that there is a reasonable possibility that he can cure the defects" in his lawsuit, the court ruled. "Consequently, he must be afforded leave to amend his complaint." The city argued that there was no connection between its purchase of the property and Kong's displacement from his place of business. Kong continued to do business at the location for six years after the city acquired the property, which was longer than his original sublease, the city noted. But, as in its ruling regarding displacement benefits, the court held that it was the agency's initial acquisition of the premises that resulted in Kong getting evicted. The Case: , No. B146142, 2003 DJDAR 5487. Filed June 13, 2002. Ordered published, May 21, 2003. The Lawyers: For Kong: Anthony Parrille, (626) 294-0010. For the city: M. Lois Bobak, Woodruff, Spradlin & Smart, (714) 558-7000.

The Sonoma County Water Agency's environmental impact report for a project to increase the agency's withdrawals from the Russian River has been thrown out by the First District Court of Appeal. The EIR's analysis of cumulative impacts and project alternatives, and the document's description of the environmental setting were all inadequate, the court ruled. The primary flaw was the agency's failure to consider that the Russian River is likely to have less water in it in the future because various agencies and Pacific Gas & Electric Company are pursuing a plan to decrease diversions from the Eel River to the Russian River. Most of the summertime flow in the Russian River is actually water that has been diverted from the Eel. " he agency's failure to consider the impact of the potential curtailment of water from the Eel River has resulted in an EIR that fails to alert decisionmakers and the public to the possibility that the agency will not be able to supply water to its customers in an environmentally sound way," Justice Sandra Margulies wrote for the court. The plan to decrease diversions from the Eel River to the Russian River had advanced to the point that work had begun on an environmental impact statement. That fact alone made the cut in diversions a "reasonably foreseeable future project" that the EIR had to discuss in the project setting and in the analysis of cumulative impacts, the court ruled. Water has been a big issue in Sonoma County for decades, and the Sonoma County Water Agency — which serves 500,000 customers in unincorporated Sonoma and Marin counties and in eight cities — is the biggest player. The agency has the rights to 75,000 acre-feet of water a year from the Russian River, of which the agency uses about 55,000. To meeting growing demand, the agency proposed to increase its Russian River take to 101,000 acre-feet annually and to expand storage capacity. At the same time the agency was considering its plan, the Federal Energy Regulatory Commission (FERC) was reviewing a "consensus recommendation" from the U.S. Fish and Wildlife Service, the California Department of Fish and Game, the National Marine Fisheries Service and PG&E to reduce by 22% the diversion of water from the Eel River to the Russian River. Since 1965, PG&E has had a license to divert between 159,000 acre-feet and 181,000 acre-feet per year from the Eel for hydroelectric plants elsewhere. Most of that diverted water ends up in the Russian River. Those diversions have harmed fish in the Eel River, including some species of salmon that are now endangered. The Sonoma County Water Agency gave FERC an alternate proposal for curtailing the diversion by only 10%. The proposed 22% reduction would have severe environmental consequences, including the potential for dewatering part of the Russian River during critically dry years, the agency told FERC. However, in its EIR for the proposal to take more water from the Russian River, the agency "made only a summary reference to the pending FERC proceedings," according to the court. So environmental organizations sued, arguing that the EIR was inadequate and that the agency had broken some planning laws. Sonoma County Superior Court Judge Lawrence Antolini ruled for the county. But the First District overturned Antolini's decision regarding the EIR. The court was clearly distressed at the agency's failure to address the proposals to reduce water flowing into the Russian River — proposals that the agency argued were speculative, and, therefore, not in need of consideration under the California Environmental Quality Act (CEQA). "The record tells a far different story from the one the agency relates in its EIR," Justice Margulies wrote. "Although the agency euphemistically describes the flow proposals before FERC as ‘modifications,' every proposal before FERC — including the agency's own — posits a decrease in the amount of water available to the agency to supply its customers' needs at a time when the agency is seeking to increase the amount of water it takes out of the Russian River." In fact, one month before certifying its EIR, the agency sent a letter to FERC describing the enormous environmental and economic consequences that the proposed 22% reduction in diversions would have. Yet, the "EIR completely fails to alert the public and the decisionmakers to the cumulative impact of Eel River curtailments pending before FERC and increased Russian River diversions proposed in the project," Margulies wrote. "CEQA requires more than this." Because the EIR's discussion of cumulative impacts was deficient, the section regarding alternatives was also lacking. "Alternatives that would reduce the agency's reliance on water from the Eel River would be among the alternatives that must be considered by the agency in the event it determines that the cumulative impact of the project and the FERC proceeding is significant," the court ruled. The court also ruled that the environmental setting in the EIR was deficient because of the failure to discuss in detail the proposed diversion reduction and the condition of the Eel River water supply. The court rejected environmentalists' arguments that the EIR had to address the water agency project's impacts on the Eel River because, the court held, the project would cause no significant impact to the Eel. The court also dismissed arguments that the EIR's discussion was growth-inducing impacts was inadequate. And the court rejected arguments that the project violated some state laws regarding general plan consistency and compliance with local zoning ordinances. In a short concurring and dissenting opinion, Justice Douglas Swager said that the two-justice majority was wrong about impacts to the Eel River. Until there is an adequate description of the environmental setting, "it is premature to find that the project has no significant impact on the Eel River," Swager wrote. He agreed with his two colleagues on the rest of the issues. The Case: , No. A098118, 03 C.D.O.S. 4165, 2003 DJDAR 6532. Filed May 16, 2003. Modified June 13, 2003. The Lawyers: For Friends: Stephan Volker and Eileen Rice, (510) 496-0600. For the agency: Jill Golis and Sheryl Bratton, deputy county counsels, (707) 565-2421.

Commercial real estate has given rise to a number of insipid sayings. The most notorious, of course, is "location, location, location," which are the "three most important things in real estate." Another familiar adage is one about projects not succeeding without sufficient parking. Less often heard, if not less important, would be the admonition, "Don't be the first to build something in places where the rules are unclear." In particular, consider your options carefully before volunteering to be the trial balloon for building a major project on environmentally sensitive land, especially when the government has not decided exactly how it wants to mitigate such projects. The experiences of two developers — one a large-scale master plan developer and the other a smaller, apartment developer — are snapshots of the uneasy relationship between home building and environmental policy in North San Diego County at a time when newly minted environmental laws are racing to keep pace with rapid home building. In some instances, regulators do not have mitigation standards or other conservation practices in place, and must negotiate each of these environmental issues separately with developers. Consider the case of Morrow Development, a Carlsbad-based home builder that spent nearly 20 years negotiating a development agreement with the city. The site of Villages at La Costa offers gorgeous views of rolling landscape and dramatic valleys in the inland portion of the San Diego County city. On this 1,866-acre site, the developer proposed building more than 3,000 homes, mostly single-family homes, in four-master-planned "villages." The area is also habitat for the elusive gnatcatcher and about 60 other species. In 1990, the U.S. Fish and Wildlife Service added a another layer of complexity to the negotiations by declaring the area part of the 800,000 acres of protected gnatcatcher habitat in Southern California. In 1995, the company, the city, and Fish and Wildlife agreed on a habitat conservation plan for Villages at La Costa that set aside 835 acres as permanent habitat. The developer also acquired 200 acres of adjoining land, which was combined with additional mitigation lands from other developers to form a 1,500-acre reserve. Shortly after, Morrow donated the land to the Batiquitos Lagoon Foundation, an environmental group that had fought the project in earlier years. Not until October 2001, however, did the project win the approval of the Carlsbad City Council. "That deal has been the hallmark" in local land-use negotiations, said Jack Henthorn, former Carlsbad housing and redevelopment director who is now a private consultant. The deal was all the more impressive, he added, because "the regulatory environment changed as the approval process was going forward." A smaller project is the 20-acre Summit at Carlsbad, where Pacific Properties and Development of Las Vegas plans to build 146 apartment units in 11 buildings. Unlike the Villages at La Costa, the Summit property was not gnatcatcher habitat but was former farmland. The acreage, however, lay between two designated habitats, and the city wanted to create a corridor to bridge the two. "When this project was originally proposed," said Henthorn, who consulted on the project," the Carlsbad Habitat Management Plan was still evolving, and there were no clear regulations as to deal with this issue." Pacific Properties acquired the site from another developer in 2000. "They just got tired and ran out of money," said Jim Stockhausen, executive vice president for Pacific Properties. Even though the site contained no gnatcatcher habitat, Henthorn said, "it was a critical link in the habitat management plan for the northern San Diego County area." Environmental regulators had limited jurisdiction over the site, because the site was not officially habitat. Yet the homebuilder continued to negotiate with the city's environmental staff, as well as with Fish and Wildlife, the California Department of Fish and Game, and the Multiple Habitat Conservation Program, an inter-jurisdictional entity that monitors habitat. Furthermore, the presence of degraded wetlands, which required mitigation, brought the U.S. Army Corp of Engineers into negotiations. The developer eventually agreed to devote 60% of the site to open space. "Through that process, we were able to identify what we called the ‘habitat line,' within which development would take place while the area outside that line would then be available to meet the agency's required linkage," Henthorn said. By doing so, he added, "we have created an opportunity for the gnatcatchers to facilitate their crossing of a north-south corridor between Carlsbad and Oceanside bifurcated by Highway 78." Although the area was zoned for single-family housing, the developer decided to build a multi-family complex instead, in exchange for a modest 2% increase in density. In a quid pro quo, the developer set aside 20% of the project for low- and moderate-income renters, rather than the standard 15% required by the city. The project exists within an eight-acre footprint, with units clustered in three-story, walk-up buildings, leaving the rest of the property as the gnatcatcher highway. After five years of negotiation, the developer had received all of the state and federal agency endorsements, and the city approved the project earlier this year. The interesting part of the process," Henthorn said, "is that it shows that when agencies and builders can sit down and clearly communicate what their respective needs are — even in this situation, where there were no regulatory restrictions — we were able to meet the needs of the agencies to create this linkage." What made the process work, he added, was "the builder's willingness to redesign the project and to come up with a design that met with both the builder's needs and agencies' requirements." Compared with the nearly 20 years that Morrow spent getting permits for La Costa, five years may not seem so bad. "I believe we could have done it half the time," Pacific Properties' Stockhausen said a little ruefully. On the other hand, he added, "I'm told that five years is about standard for Carlsbad."

Buildout is a funny term. It is the word that most planners use to describe what their town would look like once everything that is called for in the general plan has been built. In today's world, buildout is easily quantified. Most cities and counties can point to their general plan and identify precisely how many houses and how many square feet of commercial and industrial space buildout involves. In California, where the Department of Housing and Community Development (HCD) is always bird-dogging local governments about their housing elements, buildout can mean a very precise calculation of the jurisdiction's capacity to absorb both single- and multi-family residences. But do communities actually reach buildout? What happens to this theoretical capacity to absorb development when real applicants propose real projects and those projects are reviewed by real planners and real planning commissions and real elected officials? Considering the fact that communities base so many other policies on buildout — housing elements, infrastructure capacity and financing, parks and recreation needs, school needs, and so forth — this is not an insignificant question. And in a state that seems to be in perpetual crisis on both housing production and infrastructure finance, it is nothing less than a major public policy issue. Oddly, there has been little research over the years on the question of whether communities actually hit buildout. But the research that has been conducted has all reached the same conclusion: No, especially regarding housing. In general, housing gets constructed at considerably less than the buildout capacity contained in the general plan. One report by our company, Solimar Research Group, estimated that in Ventura County housing gets constructed at somewhere between 55% and 80% of capacity; a similar analysis done many years ago for metropolitan Portland came up with a figure somewhere in the neighborhood of two-thirds. A follow-up study just released by Solimar and Reason Public Policy Institute, which looked at six different case studies in Ventura County, found a wide variety of reasons for this phenomenon. (The report is available at www.solimar.org ) In some cases, neighbors objected to the proposed development. In other cases, it was clear that the city never really intended to permit what the general plan called for. In still other cases, developers were responding to changing market conditions. In the case of one project in the City of Fillmore, the general plan called for single- or multi-family units at 7 to 11 units per acre. But when the city signaled its desire to have a single-family project built, it turned out that the required minimum lot size was 6,000 square feet, making it impossible to hit the minimum density in the general plan. Eventually, the city allowed lots of smaller than 6,000 square feet, but other concerns — such as the desire for a linear park along the Santa Clara River — ate into the project's density, which dropped to fewer than 6 units per acre as a result. In the case of a project in Camarillo, it was not city regulations but legal liability that caused the density decline. The city was more than happy to process an attached condominium project at approximately 10 units per acre. But the developer eventually chose to build detached condominiums instead — partly to respond to market demand for single-family-style units and partly to avoid construction defect liability issues. The resulting project was only 8 units per acre. No matter how you look at it, one thing is clear: The buildout number in the typical general plan is a ceiling, not a floor. You can see this in the way most general plans approach density. A particular parcel might be designated for "medium density," which might mean a range between 4 and 8 units per acre. So, a project approved at 4 units per acre might either be achieving 100% of buildout or only 50%, depending on how you want to look at it. In many cases, environmental review and other factors will drive down densities, as the process of minimizing impacts, creating mitigations and assuaging neighbors' worries often downsizes a project and causes the jurisdiction to devote some project land to things besides housing. This whole process causes a couple of problems in a state like California. The first one, obviously, is the fact that it may drive down housing production. California seems to have a bottomless demand for housing and prices are rising rapidly. On a statewide level, production is clearly not meeting demand — which is part of the reason why HCD hammers the local governments on production as well as affordability. From that perspective, using the general plan as a ceiling rather than a floor doesn't make things any better. The second issue has to do with infrastructure finance. Because most communities now operate on a "pay as you go" basis regarding infrastructure, many fee and assessment systems are based on buildout. In simple terms, many cities calculate the cost of road, water, and sewer infrastructure required by the buildout and then divide that cost by the number of housing units (or some other measure of buildout) in determining fees and assessments. What happens when buildout goes down? Well, some demand for infrastructure goes down -- but other costs might stay the same, such as the cost of building arterial roads to the new subdivisions. In other words, if buildout doesn't materialize as expected, there might be a revenue shortfall for infrastructure. In other parts of the country — including Oregon and Maryland — the public policy solution to this problem has been to create minimum densities. In other words, create a "floor" for development as well as a "ceiling." This is a tempting solution, but it is probably not realistic in California, where land cost and other pressures have already created fairly high single-family densities in most places. The Maryland minimum densities are laughable by California standards -- two to four units per acre, on average. Even after being shrunk by the approval process, most California subdivisions come in at higher densities than that. Another possible solution — one that the new Solimar report advocates — is better and more expanded use of specific plans. General plans are by nature vague and broad. And it is difficult to achieve true community buy-in for a 20-year plan. A specific plan, on the other hand, is usually used to plan out the precise development of a definable geographical area over a short period of time — say, a neighborhood or district over a five-year period. The Solimar/Reason reports have found that this is a double-edged sword. On the one hand, a specific plan process may reduce densities from what the general plan calls for. On the other hand, projects in specific plan areas are usually approved at 100% of their specific plan densities, so the infrastructure finance plan is likely to line up with actual infrastructure needs. While buildout is not always what it appears, there are tools available, such as specific plans, that make hitting a reasonable buildout level more likely. These tools could protect communities and accommodate a more predictable level of growth.

The City of Buena Park has successfully defended a lawsuit against city ordinances that prohibit long-term occupancy of motel rooms. The Fourth District Court of Appeal ruled that the ordinances were not unconstitutional takings and did not deprive the motel owners of equal protection. In August 1996, the city adopted ordinance No. 1340, which prohibited motel owners from renting a room to the same guest for 30 or more consecutive days. The city adopted the ordinance after a neighborhood improvement task force found unsanitary conditions and vermin in motel rooms rented to long-term guests. Under the ordinance, hotels and motels with at least 75 rooms and a restaurant on or abutting the premises may apply for a conditional use permit allowing stays longer than the 29-day limit. But the city found that motel owners were circumventing the 29-day limit by renting rooms to people for 29 days and then allowing them to check out for one day while leaving their belongings behind. Some motels also allowed multiple people staying in the same room to register under different names. So the health and safety issues persisted In late 1999, the city attempted to close the loopholes by adopting ordinance No. 1399. The new law prohibited motel owners from renting a room to the same guest for more than 60 days within a 180-day period. In March 2000, the Buena Park Motel Association and 12 of its members — ethnic minorities who own and operate small to medium-sized motels — sued the city. They argued that the ordinances were an irrational and unreasonable exercise of the city's police power. The ordinances were an unlawful taking of private property without just compensation and a violation of the motel owners' right to equal protection under the law, they argued. Orange County Superior Court Judge Thomas Thrasher ruled for the city, finding that the lawsuit against the 1996 ordinance was too late, and that the second ordinance constituted a valid exercise of the city's policy power. The motel owners appealed, but they got no further with the Fourth District. Although the statute of limitations for challenging zoning regulations is 90 days, the motel owners argued that they could still challenge the 1996 ordinance state laws permitting the city to levy transient occupancy taxes preempted the local ordinance. The Fourth District rejected the argument, saying it would apply only if the state law fully occupied the area of law, which was not the case. The motel owners also pointed to the U.S. Supreme Court decision in , (2001) 533 U.S. 606 (see , August 2001). In , the court held that there was no expiration date on the constitution's takings clause and that a property owner could seek compensation for a pre-existing regulation. But the Fourth District said no. " ven if we construe as permitting a recent purchaser of private property to circumvent the statute of limitations to challenge a pre-existing zoning ordinance, the case does not apply to the facts at issue here," Justice William Rylaarsdam wrote. "There simply is no evidence in the record that any of the plaintiffs purchased their property after ordnance No. 1340 took effect." The hotel owners' challenge to the ordinance adopted in 1999 was not too late, but the court upheld the validity of the measure. The court ruled that the ordinance was not arbitrary and unreasonable, and, importantly, that it would not deprive them motel owners of all economically viable use of their properties. The motel owners had testified that 35% to 70% of their guests stayed for fewer than 30 days. The motel owners have some flexibility under ordinance 1399 to allow extended stays over the course of 180 days, the court noted. Some of the motels could be modified to meet the criteria — more rooms and a restaurant — for a conditional use permit. And some guests "may elect to remain in the city and move from motel to motel," Rylaarsdam wrote. " he city balanced plaintiffs' right to use their property for extended stays with the public's interest in having all motel rooms regularly cleaned. Thus, we conclude the restrictions imposed by ordinance No. 1399 substantially advanced the city's interest in maintaining sanitary, pest-free conditions at the motels," the court ruled. The court quickly dismissed the argument that the city was discriminating against the motel owners because of their ethnicity. The motel owners conceded during oral argument they had no evidence of this, according to the court. Plus, the ordinance was "appropriately directed at the use of motel rooms" and not at the owners or users. The Case: , No. G029819, 03 C.D.O.S. 4531, 2003 DJDAR 5775. Filed May 9, 2003. Ordered published May 29, 2003. The Lawyers: For the motel association: Frank Weiser, (213) 384-6964. For the city: Quinn Barrow, Richards, Watson & Gershon, (213) 626-8484.

San Francisco International Airport officials will celebrate the opening of a new Bay Area Rapid Transit (BART) train connection this month while lamenting the delay of an unrelated plan to expand runways. The BART extension to the airport is scheduled to open June 22, five and a half years after construction began, and more than 40 years after an airport-BART connection was first proposed. The train system will stop at the airport's international terminal, and continue to a new transit hub in the nearby San Mateo County city of Millbrae. Inside SFO, an automated people mover that resembles a monorail will ferry passengers to other terminals once they get off BART. The new BART extension includes four stations on 8.7 miles of track. Besides SFO and Millbrae, the new stations are in South San Francisco and San Bruno. The new stations link to a system that already barely crosses the San Mateo County line to Colma and Daly City. At the Millbrae station, BART trains will meet passengers arriving on the Caltrain line, a heavy rail system serving the San Francisco Peninsula. Caltrain passengers can then transfer to BART if they wish to go to the airport. Passengers will walk directly across the tracks to catch their trains in what is supposed to be a seamless transit web. Every time a Caltrain pulls into Millbrae, a BART train will be there to meet it on the same ground level platform, according to Molly McArthur, manager of community and government relations for BART. The new station is close to Highway 101, which is often clogged with airport traffic. The Millbrae transit center is expected to eliminate 10,000 daily vehicle trips to the airport, and to be BART's busiest station. By 2010, 70,000 passengers a day are expected to ride the new BART extension, about one-quarter of them to and from the airport. The 8.7-mile extension cost a total of $1.5 billion to build. Of that amount, $750 million came from federal funds, with the rest from state and local funds. The 64,000-square-foot Millbrae station is the first link between BART and Caltrain, a commuter rail service that runs about 70 from San Francisco through San Jose to Gilroy. The new Millbrae train station will have 3,000 parking spaces, which is on par for BART stations in outlying communities. It will also have connection to local buses. BART, which was originally expected to serve as a train system for the entire Bay Area, transports passengers in Contra Costa, Alameda, San Francisco and San Mateo counties. With the new airport extension, BART will have 104 miles of track, said BART spokesman Ron Rodriguez. Santa Clara County voters approved a ballot measure in 2000 to bring the train system to their county via the East Bay as well. Local officials are hoping to secure federal funding for that extension this year, with construction expected to start in several years. While the new SFO BART extension is celebrated, plans to extend runways at the airport appear to be foundering. A fter spending at least $74 million on studies to look at building new runways � and possibly extending them into San Francisco Bay � the San Francisco Board of Supervisors indicated during meetings in May that it would not provide additional funding for the project. The airport said it needed $3.5 million for the remainder of this fiscal year, and $5 million for next year to pay staff, complete environmental studies, and maintain an option on wetlands in the North Bay that could serve as mitigation. Seeing the handwriting on the wall, the airport dropped its funding request in late May. The Board of Supervisors includes many members who took office since the airport expansion plans were announced. Voters approved a ballot measure in November 2001 that would require voter approval of any city project filling at least 100 acres of the bay � namely the airport runway project. SFO Spokesman Mike McCarron said the project is not dead. "It's going to be put on hold for a couple of years," he said, citing the economy and decreased passenger levels at the airport. The airport extension project has been opposed by environmental groups, who do not want to see landfill in the bay. But the project was strongly pushed by San Francisco Mayor Willie Brown and was supported by local members of the business community. When the plan was unveiled in 1998, an airport spokesman said the new runways were needed by the year 2010. The airport's runways are 750 feet apart; however, the Federal Aviation Administration requires a separation of 4,500 feet between planes during poor weather landings. Flight delays at the airport during foggy and stormy weather are legendary. Felicia Borrego, political director of the environmental group Save the Bay, said the environmental arguments against the expansion have always been "compelling," but she agreed with McCarron's assessment that the poor economy had stalled the project. United Airlines, the airport's largest carrier, is in bankruptcy and has cut flights as it struggles to regain profitability. The airline reported losing $1.34 billion during the first quarter of this year. Borrego's group had urged the airport to consider other alternatives to new runways, such as more sophisticated radar technology for landing planes. As originally proposed, two new runways would replace two of the airport's four existing runways. Early proposals called for up to two square miles of landfill in the bay to accommodate the new runways, which would cost as much as $3.5 billion to build and take eight to ten years to complete (see , February 2001). At one point, airport officials hoped to restore salt production ponds on the bay south of the airport to mitigate the damage caused by the fill. But that plan was unlinked from the airport runway plan, and 16,500 acres of salt ponds were purchased for restoration earlier this year by the state and federal governments and a group of private foundations. Contacts: Ron Rodriguez, Bay Area Rapid Transit spokesman, (510)464-6000. Molly McArthur, BART manager of community and government relations, (650) 689-8411. Mike McCarron, San Francisco International Airport spokesman, (650)821-5019. Felicia Borrego, Save the Bay, (510)452-9261.

The story of Pinocchio is a variation on the Pygmalian myth: Fashioning a fantasy companion with one's own hands, and then bringing the inanimate object to life. In the case of Pygmalian, the sculptor was able to bring to life the statue of a beautiful woman. In the case of Pinocchio — a theme that gets obscured in the popular Disney version by cinematic details like telescoping noses and boys turning into donkeys — is the poignant wish of Geppetto, the lonely wood carver, who wishes that a wooden marionette can become "a real boy." While retail development may seem less poignant than making fantasy children out of wood, the notion of the town center is another manifestation of the Pygmalian myth: The idea that developers can create instant shopping streets that will be accepted as the genuine urban article. So-called town centers are essentially outdoor shopping mall, with more or less the same mix of tenants as the interior variety, but look and feel very much like city streets. The town center concept has spread far beyond California to become a national phenomenon. Cities that had lacked downtowns — including Santa Clarita, Thousand Oaks and Emeryville — awoke one day to find that a little bit of San Francisco's Maiden Lane, or Palo Alto's University Avenue, or Los Angeles' Montana Avenue had seemingly sprung up like giant, stucco mushrooms in their pedestrian-bereft cities during the night. Sometimes town centers fit into existing urban grids. At other times, these developments stand alone in suburban isolation. Predictably, such streets have their critics, who cavil about "inauthenticity" and "Disney-fication." Admittedly, just as kosher-style hot dogs are not genuinely kosher, many town centers are more urban in style than substance. With their manufactured cheerfulness, non-specific nostalgia and vaguely "traditional" architecture, town centers are easy marks for the authenticity police. In fairness, some genuine historic districts, like San Diego's Gaslamp District and Old Pasadena, are so covered in town center-style signage, neon and other types of marketing bric-a-brac that they are indistinguishable from the cheap imitations. But what if the authenticity police were wrong, or at least not entirely right? They are correct insofar that many town centers are phony, saccharine and "timeless" in a retro kind of way. But those who are sticklers for realism may be missing the larger point that instant downtowns like Santana Row in San Jose or Bay Street Emeryville have the potential to mature gracefully and merge into larger urban patterns. As we wrote a few years back about another town center, The Grove at Farmers Market in Los Angeles (see , January 1999), the most important criterion is not whether artificial streets are garish or in questionable taste. The proper question, instead, is whether a particular set of buildings has the right "bones" to evolve from a private retail center into a for-real public street, just as Pinocchio eventually became a real boy. Even if the town centers are really monolithic malls in disguise, they look like rows of individual buildings, each with a distinct façade, and this artifice has an urban rhythm that can adapt itself to a larger context. For these reasons, I suggest we hold off judgment on the town centers, because some of them may serve as the seedlings from which entire pedestrian-oriented districts will grow, and, as such, may turn out to be defensible. With this criterion in mind — call it long-term urban viability for the lack of a better phrase — the comparison of Santana Row with Bay Street Emeryville becomes more focused. Bay Street — developed by Madison Marquette and designed by The Charles Group of Los Angeles, in association with David R. Hoffman — may be the more typical of the two town centers under discussion here. Bay Street is a single, elongated, inward-looking street that stretches down one long block. In another words, it is an inverted strip center. The front entrances are mostly on Bay Street, the official "walk street" of the project, while the center turns its back to Shellmound Street, a major thoroughfare. The retail portion is complete, while a residential portion, to be built atop the retail buildings, is currently under construction and will not be ready for occupancy until next year. A 300,000-square-foot IKEA outlet is on the south, while Powell Street Plaza, a smaller retail center, lies to the west across Shellmound. The stores within the Bay Street complex do not address Shellmound, and the Bay Street "urban village" offers the paradoxical image of turning its back on the largest local arterial, although architect Pigg has provided plentiful glass on the Shellmound side of the building so motorists see merchants and wares, not just blind walls. With the IKEA, Bay Street and Powell Street Plaza all in place and the enormous Chiron campus to the east, Shellmound looks like a major shopping street in the making, even if Bay Street has few, if any, storefronts on the corridor. The big barrier is the large scale of the retail projects, which may make it difficult to redevelop these big parcels on the store-by-store, fine-grained level that seems most desirable to add interest and variety to monolithic malls and big-box retailers. It would not be easy for an individual developer to come in and create, say, a restaurant with outdoor seating or a nightclub or a coffee shop or used bookstore, or other small "specialty" retail businesses that would give Bay Street some individual character. Worse, Bay Street is landlocked between Shellmound to the west and the Union Pacific tracks to the east, preventing developers from creating a district; Shellmound will always be a retail strip, dominated by cars pulling into garages, cars coming out of garages and still other cars zipping by quickly on the road — not the most pleasant experiences for people on foot. On the other hand, Bay Street has the potential to convert its blind backside into storefronts along Shellmound at some future time, creating a two-sided shopping street on this important corridor. Despite some challenging odds, this Pinocchio may yet become a real boy. Although the site plan of Santana Row probably preceded Bay Street in time, the San Jose project seems like an improvement over the Emeryville shopping street. Located within an existing, if under-used, intersection, Santana Row does not suffer from the obvious limitation of Bay Street of being a single street without the ability to expand. A "demalling" project built on the site of an earlier shopping center, Santana Row was developed by Federal Realty Investment Trust, and master planned by Street Works with architecture by Sandy & Babcock and Backen Arrigoni & Ross. Like Bay Street, Santana Row will be a sandwich of retail below and residential on upper floors. The advantage of the San Jose project is that it has taken root on an existing urban grid, and has the grace and ingenuity to address that grid in all four directions. This outward-looking design promises than Santana Row may age gracefully and merge with the surrounding urban fabric. On the other hand, there are some self-imposed limitations to Santana Row: The project pretends to be a continuation of a regular street grid while, in reality, drivers tend to find themselves dead-ending against parking structures or buildings. As in a Roach Motel, the target audience may find it easier to enter than to leave. Even with this problem, it is not impossible to imagine that some roads could be cut through the blind-siding streets, and that Santana Row could be reconfigured as a set of regular blocks. This is one urban marionette that has an excellent chance of becoming "a real boy."

The U.S. Court of Appeals for the District of Columbia has turned back a San Diego developer's broad attack on the Endangered Species Act as an unconstitutional exercise of federal power. Rancho Viejo LLC argued that the federal government had exceeded the authority granted to it by the constitution's Commerce Clause, and the developer pointed to two recent Supreme Court decisions striking down laws because they exceeded Congress's authority under the clause. A federal district court dismissed the suit, and the appellate panel in Washington D.C. affirmed that decision. "To survive Commerce Clause review, all the government must establish is that a ‘rational basis exists for concluding that a regulated activity sufficiently affects interstate commerce,'" Judge Merrick Garland wrote for the three-judge panel, citing , 514 U.S. 549 (1995). "And there can be no doubt that such a relationship exists for costly commercial developments like Rancho Viejo's." Rancho Viejo sought to build a 280-home project on 202 acres near the junction of Interstate 15 and Highway 76 in unincorporated San Diego County. The company proposed building houses on 52 acres upland of Keys Creek, which bordered the property. Rancho Viejo planned to use 77 acres, including portions of the streambed, as borrow areas for fill on the 52-acre housing site. To get the fill, Rancho Viejo had to get a Clean Water Act § 404 permit from the U.S. Corps of Engineers. The Corps determined that the project "may affect" arroyo toads, an endangered species present in the creek and adjacent to the project site, so the Corps sought a formal consultation with the U.S. Fish and Wildlife Service. In May 2000, Rancho Viejo dug a trench and built a fence parallel to the creek. The Fish and Wildlife Service quickly notified the developer that the fence resulted in the illegal "take" of an endangered species and would cause the future illegal take of toads. In August 2000, the Fish and Wildlife Service issued a biological opinion stating that Rancho Viejo's proposal to borrow material from the 77 acres was likely to jeopardize the toad's existence. The agency recommended that Rancho Viejo get its fill material from an off-site location. Rancho Viejo then sued, alleging that both the listing of the toad under the ESA and the application of the ESA to the project exceeded the federal government's authority under the Commerce Clause. The district court held that the case was the same as , 130 F.3d 1041 (D.C. Cir. 1997) (see , February 1998). In , the court rejected a Commerce Clause-based challenge to the application of the ESA to a hospital construction project in San Bernardino. The appellate panel agreed that was indistinguishable from the current controversy. In its appeal, Rancho Viejo cited two recent Supreme Court decisions as evidence that was no longer the controlling case. Those Supreme Court cases were , 529, U.S. 598 (2000) and , (" ") 531 U.S. 159 (2001) (see , February 2001). In , the high court threw out a section of the Violence Against Women Act because its adoption exceeded congressional authority under the Commerce Clause. Rancho Viejo argued that stood for the proposition that noneconomic activity, no matter its effect on interstate commerce, could not be regulated under the Commerce Clause. In , the Supreme Court limited the authority of the Corps of Engineers under the Clean Water Act. But the appellate court rejected the argument. " instructs that ‘the proper inquiry' is whether the challenge is to ‘a regulation of activity that substantially affects interstate commerce.'" Justice Garland wrote. "Similarly, declares that what is required is an evaluation of ‘the precise object or activity' that, in the aggregate, substantially affects interstate commerce. When, as directed, we turn our attention to the precise activity that is regulated in this case, there is no question but that it is economic in nature." Nothing in either case invalidated the holding in , the court ruled. Rancho Viejo countered that because the regulation had a noneconomic purpose — the protection of toads — it violated the Commerce Clause. But the court said no to that argument as well. "The Supreme Court has long held that Congress may act under the Commerce Clause to achieve noneconomic ends through the regulation of commercial activity," Garland wrote. Rancho Viejo's position would invalidate numerous laws regarding discrimination, health and welfare and other things, the court held. "Congress' primary object in passing product safety legislation, for example, was not to improve the productivity of industry but rather to protect the well-being of the public. Much the same can be said of federal environmental legislation. And plaintiff's position would make federal criminal law an area of particular vulnerability," Garland wrote. The court then dealt with Rancho Viejo's arguments that the ESA was overboard and that it represented an unlawful federal intrusion into local land use decisions. The overbreadth argument was essentially a facial challenge of the ESA, the court held, and such a challenge could stand up only if there were no set of circumstances in which the law would be valid. But Congress has the authority to regulate development projects, so the facial challenge failed, the court held. Finally, the court held that the ESA "represent a national response to a specific problem of ‘truly national' concern," as required by . "Moreover, while ‘states and localities posses broad regulatory and zoning authority over land within their jurisdictions, … it is well established … that Congress can regulate even private land use for environmental and wildlife conservation,'" Garland wrote, citing , 214 F3d 483 (4th Cir. 2000). "Tracing a 100-year history of congressional involvement in natural resource conservation, Chief Judge Wilkinson concluded gibbs> gibbs> that ‘it is clear from our laws and precedent that federal regulation of endangered wildlife does not trench impermissibly upon state powers.'" The Case: , No. 01-5373. Filed April 1, 2003. The Lawyers: For Ranch Viejo: John C. Eastman, (714) 628-2587. For Norton: Katherine Barton, Department of Justice, (202) 514-2000.

THE LOS ANGELES COUNTY Board of Supervisors has approved a revised environmental impact report for the proposed Newhall Ranch development in the hills just west of Santa Clarita. The revised EIR was required because a Kern County judge in 2000 found the original study lacking. Among other things, the judge found that the study did not adequately address where the project would get its water. The court will now review the revised environmental analysis. The revised EIR points to two primary sources of water: 7,038 acre-feet per year from landowner Newhall Ranch and Farming Company's agricultural supply, and 1,607 acre-feet annually transferred from a Kern County farmer. Those two sources are adequate to meet the needs of the project, according to a report by county Planning Director James Hartl. Additionally, Newhall secured an additional entitlement to 7,648 acre-feet per year from the oversubscribed State Water Project, purchased 55,000 acre-feet of groundwater banking storage capacity and determined that the local aquifer can be used for banking. The revised EIR and a settlement among Newhall, the Department of Fish and Game, and the Los Angeles County District Attorney spell out how to handle the San Fernando Valley spineflower. The endangered flower that was found on the site since the county originally approved the development in 1999, and Newhall was accused of hiding the species' presence. (see , March 2003). Under the settlement, Newhall will set aside 64 acres for a spineflower preserve and provide DFG with better access to the site and to biological reports. The Board of Supervisors also voted 4-1 to approved various general plan and specific plan amendments and a zoning change to allow the project to proceed. Supervisor Zev Yaroslavsky, who voted for the project in 1999, was the dissenter. "We are on a course that is demonstrably wrong," Yaroslavsky said during the board meeting. He called an analysis that found that less than 10% of Newhall Ranch residents would commute outside the Santa Clarita Valley for work "laughable." As approved, Newhall Ranch calls for 20,885 housing units on 11,963 acres. There would also be millions of square feet of commercial and industrial development to provide about 19,000 jobs. Roughly half the site would remain undeveloped. Environmentalists and, possibly, Ventura County, are expected to renew their legal challenges to the project. ******** TEJON RANCH COMPANY and the Trust for Public Land (TPL) jointly announced they are working on a deal in which the TPL would acquire up to 100,000 acres of the 270,000-acre Tejon Ranch north of Los Angeles. No price or timeline for signing a contract were announced. The land would provide habitat for rare species and oaks, and serve as a wildlife corridor that connects open space near the coast to the southern Sierra Nevada mountains. "To help us in planning the future of this historic ranch, we have created a long-term vision that calls for permanent conservation of about 100,000 acres of the most highly prized and environmentally sensitive lands in our nation," Tejon Ranch CEO Bob Stine said in a prepared statement. Tejon Ranch is developing a 20 million-square-foot industrial project in Kern County and is seeking Los Angeles County approved for a 23,000-home new town at Interstate 5 and Highway 138 (see , April 2003). Some environmentalists worried that the TPL purchase would only encourage development of the rest of the ranch. ******** A NEW U.S. INTERIOR DEPARTMENT proposal for solving water conflicts in western states during the next two decades concentrates on getting more out of existing resources. The report, "Water 2025: Preventing Crises and Conflict in the West," does not call for building additional reservoirs or relaxing environmental regulations — two notions that past Republican administrations have advocated. Instead, the report calls for additional research and development for things such as conservation and desalination. The report also calls for modernizing the water infrastructure to stretch existing supplies. "Crisis management is not an effective solution for addressing long-term systematic water supply problems," Interior Secretary Gail Norton said upon the release of the report in May. The report lists six principles: • Respect state, tribal and federal water rights, contracts and decrees of the U.S. Supreme Court. • Maintain and modernize existing water facilities so they continue to provide water and power. • Enhance water conservation and resource monitoring. • Use collaborative approaches and market-based transfers to minimize conflicts. • Improve water treatment technology, including desalination. • Derive additional benefits from existing water supply infrastructure. The report lists 10 hot spots where water conflict is most likely during coming years. Three of the hot spots are in California — the Colorado River, the Lake Tahoe region, and a region stretching from the San Francisco Bay delta to the northern San Joaquin Valley. The report is available at www.doi.gov/water2025. ******** RANCHERS AND PROPERTY RIGHTS ACTIVISTS in San Benito County have presented the Board of Supervisors with about 5,300 signatures on a referendum that seeks to overturn a recent board decision to adopt a slow-growth initiative. That initiative encompassed some existing growth-control policies and downzoned tens of thousands of acres of farmland and pasture. When presented with about 5,600 signatures on the initiative in April, supervisors chose to adopt it rather than put it on the ballot. The downzoning especially upset landowners, who responded with the referendum. As of early June, the board had not taken action on the referendum because of legal uncertainties regarding the measure's language. ******** A STUDY OF TRANSIT-ORIENTED DEVELOPMENTS by Caltrans reports that there are significant barriers to development near public transit stations, and recommends that the state modify policies and provide financial incentives to encourage this type of development. The study, "Statewide Transit-Oriented Development Study: Factors for Success in California," lists five major obstacles: Transit system design, local opposition, local zoning, high development risk and cost, and difficulties with financing. The report recommends that the state sell land it owns near major transit stations for transit-oriented development, encourage better coordination of land use and transportation planning, review state environmental requirements, provide funding to local government for transit-oriented development planning, allow greater flexibility in spending state transportation funds, and offer financial incentives. The report is available at www.dot.ca.gov/hg/MassTrans/tod.htm ******** A CONTROVERSIAL PROPOSAL to widen Highway 101 through the San Fernando Valley and eastern Ventura County has been suspended by Caltrans. The May decision came shortly after local representatives Sen. Sheila Kuehl (D-Santa Monica) and Assemblywoman Fran Pavley (D-Agoura Hills) announced their opposition. The freeway has become one of the most clogged in a heavily congested region, but public outcry against the proposal was overwhelming. Caltrans had estimated it would have to acquire about 700 homes and 250 business locations to accommodate the widening.

At last, a property rights ballot initiative is making the rounds in California. But the initiative begs the question: Is there still a property rights movement in this state? Maybe. It is unlikely that any sweeping pro-property rights action will come out of the Legislature or out of most California courts, least of all the left-leaning Ninth U.S. Circuit Court of Appeals. So, if California property rights advocates have much hope at all, they are likely to pin it on a ballot initiative. In mid-May, the attorney general and the secretary of state gave the green light to San Luis Obispo land-use lawyer William Walter to gather signatures to place "the California Property Rights Initiative," a constitutional amendment, on the ballot in November 2004. Placing any statewide initiative on the ballot is a daunting task requiring the collection of about 600,000 valid signatures. The effort usually requires paid signature-gatherers. Walter is an experienced land-use lawyer; he recently has represented several landowners in "magic subdivision" cases, which seek to validate the existence of parcels created prior to the passage of the first Subdivision Map Act in 1893 (see , August 2001 and , March 2000). But Walter is not a big name in the field along the lines of Ronald Zumbrun, Michael Berger, or the Pacific Legal Foundation. He indicates that the current wording of the initiative is a kind of trial balloon. He says he may revise and resubmit, but "no one will take you seriously" unless you have an actual proposal in circulation. Walter's initiative is fairly simple on its face. In all of his public communications, including an interview with , Walter contends that he is simply seeking to "level the playing field," rather than create more lawsuits. Having worked as a land-use lawyer for almost 30 years, he has concluded that California has by far the most oppressive property regulations — and the least sympathetic environment for property rights — of any state in the union. In a letter to the attorney general, Walter wrote: "The goal is not to foster litigation but to reform the conduct of California's government entities." He asserted that "legislative solutions have been conspicuously lacking to provide mechanisms to modify the behavior of government agencies" and concluded that "it is anticipated that through pro-active training (e.g. continuing education) of government entities about the standards of reasonable, fair, and proportionate conduct in the exercise of their duties, few such lawsuits would arise." Walter's initiative would not, however, change the constitution to require better continuing education. Rather, it would amend the definitions contained in Article 1, Section 19, of the California Constitution — the "declaration of rights" dealing with property rights — to more explicitly include onerous regulation as the basis of a claim that property has been damaged by, or taken for, public use. Definitions are not precise. Walter acknowledged that, at least at this point, his goal is to gauge political and financial support for an initiative. He may well revise the initiative and resubmit it later. If passed, the initiative may or may not create a flood of litigation. But it would certainly make the takings standard even murkier. During the past 25 years, property rights advocates have succeeded in swinging the legal pendulum back in their direction, but they have failed to secure a hard and fast standard for when a taking occurs and when it does not. In a recent commentary in the , pro-regulation advocates John Echeverria and Bill Higgins claimed that the takings test now has 13 factors that are so complicated and contradictory that they "do not supply a meaningful rule of law." Walter's initiative requires compensation in certain situations but is not specific. The bigger question politically is whether a property rights movement can ever gain much traction in California, no matter how well funded or zealous its "true believers" might be. In one sense, you would think so. There is still a cowboy mentality in many parts of the state, and the Libertarian Party is stronger here than in most other states. On the other hand, recent political and judicial trends suggest that the cowboys will be eating the regulators' dust for the foreseeable future. For years, legislation boosting property rights has regularly stalled in committee, and that roadblock is unlikely to fall soon with the Democrats firmly in control of Sacramento. Recent court rulings involving California property rights have not gone well for the landowners. Despite nearly two decades of litigation, property owners from Lake Tahoe — one of the most highly regulated parts of the country — have never won a solid legal victory. Most recently, in , the U.S. Supreme Court rejected yet another property rights claim from Lake Tahoe, this one involving a 1980s moratorium (see , March 2002). Also, prominent Sacramento developer Angelo Tsakapoulos suffered a narrow loss before the high court. A divided court upheld a lower court's ruling in , a case involving a large fine for Tsakapoulos for "deep ripping" a wetlands, apparently in violation of the federal Clean Water Act (see , January 2003). Perhaps most surprisingly, a local, pro-property rights ballot initiative in a seemingly sympathetic county went down to defeat last year. Voters in rural Nevada County defeated Measure D by 57% to 43% last November, even though Measure D's supporters outspent the opponents 10 to 1 in a county that has a long history of defending property rights. It could be argued that all of these pro-regulation victories have been narrow and could easily have gone the other way. Tsakapoulos lost his case before the Supreme Court on a 4-4 tie, with Justice Anthony Kennedy, a Sacramento native and friend of Tsakapoulos, absent. Even as Measure D was defeated in Nevada County, its supporters defeated its opponents in individual races for the county Board of Supervisors. And the California attorney general's office has narrowly escaped defeat in Lake Tahoe on any number of occasions. But the overall trend is that the pro-regulation forces almost always find a way to win in California, even if that victory is close. The only current exception to the rule is the Marine Forests Society case, currently pending before the California Supreme Court, in which property rights advocates have challenged the constitutionality of the appointments system for Coastal Commissioners. The big victory there is not just that a lower court found the system unconstitutional, but that the Supreme Court is examining whether to apply the ruling retroactively (see , May 2003). That move threatens to overturn the entire history of Coastal Commission rulings. But the Coastal Commission is always an anomaly in California land-use regulation — unusually aggressive and polarizing. In that sense, the commission is an easier target than most other regulatory agencies. On balance, California remains a highly regulated state that is politically hostile to property rights. That makes William Walter's initiative all the more important legally to property rights advocates, and all the more difficult as a political objective.