The state Legislature completed its two-year session with a flourish during the last week of August but appeared to leave Sacramento without adopting major land-use policy changes. Assembly Speaker Robert Hertzberg's overhaul of the Cortese-Knox Local Government Reorganization Act was among the year's highlights, although he watered down the measure from early drafts. The broad-based Jobs-Center Housing Coalition, which has focused on the Bay Area housing crunch, saw three of its nine bills approved, while the new, two-house Smart Growth Caucus had a similar batting average for its 13 bills. The Legislature did not pass comprehensive local government finance reform - despite a plethora of reports and studies released earlier this year that indicate the system is failing and that cities and counties often make land-use decisions based on a project's fiscal impacts. The Legislature did pass a measure, SB 1637 (Burton), that phases in a cap of the ERAF property tax shift from counties and cities to schools. The bill ensures that local governments will get all of their shares of the growth in property taxes beginning with the 2002-03 fiscal year. A measure from Assemblyman Antonio Villaraigosa (D-Los Angeles), the former Assembly speaker, to overhaul the local government finance system bogged down in a two-house conference committee. Lawmakers eventually passed the bill, AB 1396, as a $212 million local government relief package to be distributed on the basis of ERAF contributions and population. Assemblyman John Longville (D-Rialto) said lawmakers have offered more lip-service than commitment to solving the problem. Longville, a former Rialto mayor who was chairman of the Assembly Local Government Committee for most of the year, said if he were still in local government, he would insist on a constitutional amendment the protects local government revenue sources. The Hertzberg bill, AB 2838, contains some of the recommendations that the Commission on Local Governance for the 21st Century issued earlier this year. The commission's focus was on making local agency formation commissions, which are guided by Cortese-Knox, more powerful and more independent than they have been. The speaker's bill appears to take steps in that direction, although he made a number of amendments to satisfy the development community, including deleting a provision that would let LAFCOs require community growth plans for unincorporated areas. The bill does require LAFCOs to establish policies and procedures to help stem sprawl by encouraging efficient urban development and preserving open space. The bill also requires cities and special districts to help counties fund LAFCOs, increases commission membership from five to seven and ensures special district representation. Trish Clarke, a member of the Shasta County LAFCO who served on the 21st Century commission, called the bill positive and helpful. She said it lets LAFCOs force joint planning, or at least consistent planning, in areas where spheres of influence overlap. "The cities and the counties have to talk to each other," Clarke said. Ron Wootton, chairman of the California Association of Local Agency Formation Commissions and a special district representative on the San Diego LAFCO, said the bill is important because, "It brings LAFCOs to the table with cities, counties and special districts for the first time." Wootton added, "This is the first time the cities haven't opposed anything with the word ‘LAFCO' in it." New coalition gets affordable housing bill passed The three Jobs-Center Housing Coalition bills that passed dealt with redevelopment housing, brownfields and ballot-box planning. The coalition's bills to decrease California Environmental Quality Act-reviews of infill housing failed, as did a bill that would have provided property tax incentives for communities that balance jobs and housing. Also failing were three bills aimed at modifying the construction defect liability system, which builders say discourage construction of condominiums and townhouses. The redevelopment bill, AB 2041 (Dutra), allows contiguous redevelopment agencies within a single metropolitan statistical area to establish a joint powers authority for pooling low- and moderate-income housing funds. As of this January, authorization for spending redevelopment funds outside of a project area expired. Backers of this bill said it would encourage development of affordable housing because some redevelopment agencies move slowly on housing while neighboring communities welcome new homes. Bill opponents, however, said AB 2041 would allow cities to receive the economic benefits of redevelopment and escape their affordable housing obligations. The brownfields bill, SB 1789 (Rainey), calls for the state to analyze policies that hinder remediation and redevelopment of brownfields, and to make recommendations to encourage redevelopment. The ballot-box planning bill, SB 1966 (Brulte), takes aim at slow-growth initiatives. Cities and counties already had the authority to commission an analysis of a ballot measure; this bill specifies that local officials can refer an initiative to the appropriate city or county agency for a report on how the measure would affect the jurisdictions' ability to meet regional housing needs, infrastructure funding, business attraction and retention, and use of various lands. Smart Growth Caucus finds mixed success The Smart Growth Caucus, headed by Assemblywoman Patricia Wiggins (D-Santa Rosa), had endorsed 13 bills that ranged from Hertzberg's LAFCO measure to bills that concerned water, housing bonds, transit-oriented development and other issues. Only three measures passed - the Hertzberg bill, a wetlands protection measure and a regional jobs-housing balance bill. Two other bills, Villaraigosa's AB 1396 and a smart-growth measure, passed in substantially amended form. The wetlands bill, AB 2286 (Davis), calls for the California Resources Agency to update the wetlands management plan required by the Keene-Nejedly California Wetlands Protection Act of 1978. The bill calls for compiling an inventory of wetlands and setting priorities for enhancement, restoration and conservation of wetlands. The jobs-housing balance bill, SB 1642 (Figueroa), requires the Department of Housing and Community Development and regional councils of government to seek a ratio of 1.5 houses for each job. Noting that there are still few penalties for jurisdictions that fail to build the houses that a regional plan specifies, a Senate bill analysis questioned the eventual effectiveness of SB 1642. "It is unclear exactly what impact the establishment of a specific numeric jobs/housing balance goal will have on this process," Senate Housing and Community Development Committee Consultant Mark Stivers wrote. "Would it be more appropriate to create incentives or sanctions for local governments to facilitate the production of additional housing?" The smart-growth measure, AB 779 (Torlakson), started off as a carrot for transit-oriented development. But the assemblyman from Martinez amended the bill so that it establishes "smart growth" criteria for the California Pollution Control Financing Authority to award grants. According to Torlakson's office, the bill would direct grants to "economically distressed cities and counties" to develop revitalization plans. The local governments must incorporate in their plans smart-growth strategies, such as transit-oriented development, traffic reduction measures, and infill development on brownfield sites. State Treasurer Phil Angelides, who oversees the CPCFA, supported the revised bill. The Legislature also approved a companion measure, SB 1986 (Costa), that allows the CPCFA to provide grants and loans for brownfields site assessments, remedial action plans, technical assistance, cleanup and redevelopment. Plenty of project-specific bills One late-session, gut-and-amend bill, AB 2698 (Florez), smoothes the way for a large electrical plant that Enron Corp. wants to build in southern Kern County. Enron has chosen 30 acres of pasture owned by the Tejon Ranch for a 750-megawatt power plant. However, the property is under a Williamson Act contract, which provides the landowner a substantial tax break in exchange for maintaining the property for agriculture or open space. Normally, getting out of a Williamson Act contract takes 10 years. Outright cancellation of a Williamson Act contract requires the local governing body, in this case the Kern County Board of Supervisors, to make a finding that says, basically, there is nowhere else that this project could be built - a finding that the county is willing to make. The landowner also has to pay a substantial amount to the county, which Enron is apparently willing to pay. The legislation greatly reduces the statute of limitations for challenging this particular Williamson Act cancellation. Normally, the public gets 180 days to file a lawsuit, but AB 2698 cuts the statue of limitations to 30 days for the Enron project only. That forces potential opponents to act quickly and gives Enron quicker certainty on the project. A bill by Senate President Pro Tem John Burton, SB 1562, takes an approach to CEQA that could be the first of its kind. The bill says that the state's purchase and restoration of 19,000 acres of salt flats along San Francisco Bay, now owned by Cargill Salt Co., will offset the airport's plan to fill in 1,000 acres of the bay for new runways. Bills that carve out CEQA exemptions for specific projects are not uncommon, but this could be the first bill that spells out mitigations before an environmental review is complete, said Randy Pestor, a consultant to the Senate Committee on Environmental Quality. The salt flats purchase is estimated to cost about $300 million. A companion bill, AB 398 (Migden), allocates $30 million in state funding as a down payment, although Gov. Davis is reported to be cool about the expenditure. U.S. Sen. Dianne Feinstein has secured $50 million in federal funding for the purchase. While the Florez and Burton bills each aid a specific development, lawmakers approved two other measures intended to slow or halt projects in Southern California. Assembly Bill 1758 (Kuehl) hinders a proposed subdivision in eastern Ventura County by offering protection to a rare plant; AB 2752 (Cardoza) puts the kibosh on a landfill proposed next to a northern San Diego County Indian reservation. Kuehl's bill hits at a Washington Mutual plan to develop a 3,000-home subdivision on Ahmanson Ranch, a project approved in 1992 but strongly opposed by neighboring Los Angles County and some area homeowners. Earlier this year, the San Fernando spineflower, which scientists thought had became extinct half a century ago, was found growing on the Ahmanson Ranch. Project opponents seized on the spineflower discovery and demanded action by the state. But state officials at first seemed unsure how the rediscovered species fit into the regulatory framework. The Kuehl bill authorizes the Department of Fish & Game to grant immediate protection to a species that was thought to be extinct. The bill makes it clear that the spineflower and any other rediscovered species must be left alone while the state completes a process to determine the status of the plant or animal. The narrowly drafted Cardoza bill prohibits the state from permitting a landfill in a canyon considered sacred by the Pala Indians. In 1994, voters approved the Gregory Mountain landfill, an action that the Pala Indians challenged in court but lost. (See CP&DR , June 1997, January 1999). Some bill opponents argued that the Indians were mostly concerned about the garbage dump's proximity to their planned casino. Not this time Several bills had a high profile earlier in the session but did not become law. Among them: AB 1219 (Kuehl), which would have required verification of water supply availability before approval of residential developments with at least 200 units. This bill was a favorite of environmentalists and the East Bay Municipal Utility District, and was strongly opposed by developers and local government. AB 755 (Hayden), which would have added a number of provisions to strengthen CEQA. This bill had been a priority for environmentalists. AB 717 (Keeley), which would have placed a two-year moratorium on clear-cutting of private forests. AB 1968 (Wiggins), which would have authorized cities and counties to enter into agreements to coordinate land-use planning on a regional basis. AB 2779 (Cox), which would have strengthened existing provisions that require incorporations to be "revenue neutral." While the California State Association of Counties backed the bill, several groups seeking to create new cities, including the Rancho Cordova Incorporation Committee, argued that it would slow or stymie their efforts. AB 2774 (Corbett), which would have provided $10 million in grant funds for general plan updates. Others land-use bills of interest that were passed by the state Legislature: AB 356 (Washington) creates an enterprise zone in the City of Compton to induce economic development. AB 950 (Wiggins) extends the sunset date by five years (to January 1, 2006) on a measure that allows Fairfield, Suisun City, Vacaville and Solano County to create a joint powers agency to provide housing for the retention of Travis Air Force Base. So far, the jurisdictions have not moved on the JPA because of a lack of funds. AB 970 (Ducheny/Battin) establishes the Governor's Clean Energy Green Team with the intent of expediting approval of clean power plants. The bill was a response to soaring energy costs and roving brownouts. • AB 1416 (Wesson) among other things, extends a moratorium on new cardrooms by five years to 2007. AB 1807 (Longville) gets Caltrans more involved in the CEQA review of local development projects by giving the Office of Planning and Research a middleman role. AB 1944 (Wayne) strengthens Williamson Act provisions and specifies what land-uses are compatible with the act. AB 1960 (Machado) prohibits a local agency formation commission from charging city incorporation proponents for the cost of an EIR. The bill stems, in part, from the San Fernando Valley secession movement. AB 2300 (Florez) is another attempt to crack-down on Marks-Roos financing arrangements where the only public entity is geographically removed from the development that would be funded. Although the state attorney general and treasurer support the bill, last year Gov. Davis vetoed a similar bill. SB 57 (Hayden) creates the Santa Monica Bay Restoration Project, in part to address the problem of stormwater pollution in the bay. SB 89 (Escutia) requires the Cal EPA secretary to convene a working group on environmental justice. The group will have three years to prepare a series of recommendations on implementing environmental justice procedures and policies into Cal EPA programs. SB 329 (Peace) creates an 11-member San Diego Regional Government Efficiency Commission, which must craft a plan for consolidating San Diego's regional agencies and improving coordination among the agencies. The bill is a much watered-down version of an earlier measure that would have eliminated the San Diego Association of Governments. SB 667 (Sher) creates an $85 million brownfields assessment and reuse grant/loan program in the Department of Toxic Substances Control. SB 1621 (Alarcon) limits local governments' ability to declare moratoria on multi-family housing development and requires cities and counties to zone adequate land to meet the jurisdictions' housing needs for all income categories. The bill is a response to recent multi-family housing moratoria in Indio, Palmdale, Lancaster and Paso Robles. SB 1834 (Alpert) requires the State Water Resources Control Board to develop guidelines that the board and the nine regional water quality control boards should use for implementing nonpoint source pollution control programs.

The City of Fresno is close to adopting a general plan that would allow the city's population to increase by two-thirds within the existing sphere of influence. The proposed general plan, which contains many New Urbanist concepts, presents a marked departure from past Fresno planning practices that encouraged low-density development on the fringes. "For the first time, we're not proposing to extend our sphere of influence line outward," Fresno Development Department Director Nick Yovino said. "For us, it's a major change in the way we've done planning. … These are planning policies we've never seen in Fresno." The draft general plan builds on a 1998 document issued by the Growth Alternatives Alliance, a collection of development, agricultural, business and environmental groups. The Alliance's "Landscape of Choice" was widely lauded for its recommendations regarding compact development, urban infill and preservation of farmland. While Landscape of Choice remains popular, Fresno will need cooperation from neighboring jurisdictions for its plan to be effective. City officials also must deal with homeowners who object to significant upzoning of their rural residential neighborhoods. "The big question in all of this," Fresno Mayor Jim Patterson conceded, "is whether Fresno will explode in another jurisdiction." Fresno's general plan update process is eight years old, but the city changed directions less than a year ago. In 1992, a 27-member citizen advisory committee started work. The committee conducted more than 100 meetings and addressed numerous planning issues and alternatives before issuing a recommended plan (now called the 2020 Plan) in March 1997. The 2020 Plan called for expanding the city's sphere of influence by one-third to about 189 square miles, creating three new growth areas, intensifying development on the city's west side and encouraging extensive mixed-use development. Assuming an annual growth rate of 2.7%, the plan would accommodate 920,000 people. The same area now contains about 480,000 residents, about 60,000 of whom live in unincorporated Fresno County. After the committee issued its recommendation, Patterson and three councilmembers began meeting with representatives of Fresno County and the City of Clovis, which abuts northeast Fresno. However, an inability to reach tax-sharing agreements hindered regional planning. So in October 1999, Patterson and the ad-hoc committee told planners to start over: Fresno should accommodate the next 20 years of growth within its existing 141-square-mile sphere of influence. After working on the 2020 Plan for seven years, planners have shifted into warp speed to get a very different plan adopted before a new mayor and new councilmembers are seated in January. The new plan, called the Mayor's Alternative 2000 Plan, reduces growth projections to 2% per year. That figure jibes with revised estimates from the state Department of Finance, which two years ago cut its own growth projections in half. Still, the proposed general plan adds about 305,000 people to the existing sphere of influence. That would make Fresno similar to present day Indianapolis in population and density, and more populous than such big cities as Baltimore, Memphis and Seattle. Thus, Fresno's proposed general plan is urban in nature, calling for several mixed-use activity centers, more residences downtown and a lengthy mid-rise and high-rise corridor along Highway 41/Blackstone Avenue. The plan eliminates farmland from the city and increases permissible building densities on large swaths of existing ranchettes and large-lot residential parcels. The plan's appendix includes the Landscape of Choice recommendations and even the Ahwahnee Principles from the New Urbanism movement. The new approach prevents Fresno's urban development from swallowing valuable farmland. That is especially important because, with a 1999 agricultural output of $3.6 billion, Fresno County is the most productive farm county in the United States. Fighting urban sprawl and protecting prime agricultural land are major issues in the Central Valley, and the region's largest city should take the lead, Mayor Patterson said. "This is a very big change for Fresno. We have grown out since we've been a city," said Patterson, who will complete his second, and final, four-year term in January. But Fresno leaders acknowledge that their new approach to development will fail if other jurisdictions — namely Clovis, and the counties of Fresno and Madera — demonstrate a willingness to permit old style sprawl. Madera County Planning Director Leonard Garoupa said Fresno's proposed general plan "would probably intensify development pressure in our county somewhat," But, he added, unincorporated Madera County, which lies across the San Joaquin River from Fresno, received several large-scale development proposals without a change in Fresno's growth strategy. The five-year-old Rio Mesa Area Plan calls for upwards of 30,000 homes in three villages in southern Madera County. The county is now working on an infrastructure plan for two of the villages, Garoupa said. Garoupa said his county pursued the Rio Mesa plan because Fresno-area growth has moved north toward Madera County and because the state intends to extend the Highway 41 freeway into Madera County. The University of California's plans to build a tenth campus in the area — since dropped in favor of a Merced County location — also spurred Madera County's planning, he added. Madera County's apparent willingness to accommodate spill-over growth worries Fresno officials. Fresno's relationship with its own county also is tenuous. "There are significant forces that would try to break up this effort and peel off large tracts away from our spheres to get approval by the county," Patterson said. "My hope is that the county would say no to it." In fact, Fresno County is updating its own general plan, with adoption scheduled this fall. Although the county's draft general plan emphasizes economic development, the proposed plan directs 93% of population growth to existing cities or unincorporated communities. Preservation of farmland is a priority. "The major thrust is to continue to direct — and I say continue to direct because it has been the county's policy since its adoption of the general plan in 1976 — intensive development to the incorporated cities," said Stan Ediger, a Fresno County planner. Still, Yovino noted a conflict: the county's draft plan calls for Fresno to enlarge its sphere of influence, and for all other cities to maintain their existing spheres. Yet Fresno is the only city in the county that is not interested in expanding its sphere. Clovis, a city whose population has doubled in 20 years to 70,000, could be an even greater concern. The Clovis general plan calls for a significant eastward expansion to accommodate about 45,000 more people. Clovis has been negotiating with the county over a sphere of influence expansion for three years. Clovis Planning and Development Service Director John Wright, however, said he sees no conflict between his city's seven-year-old general plan and Fresno's proposal. Fresno never had designs on Clovis's planned area of expansion. And Landscape of Choice endorsed the Clovis general plan for its emphasis on new urban centers, Wright noted. Fresno's growth policies affect Clovis, but they are not a deciding factor in how Clovis develops, Wright said. "We look at what is around us, but we believe we have a distinct and unique community," he said. While staff planners from the various cities and counties have tried to maintain communication, elected officials have shown little willingness to meet to discuss regional land use issues. Patterson said Fresno prefers a cooperative approach but is not afraid of a fight. If it appears other jurisdictions are approving projects that use land or water inefficiently, "we can be the biggest, meanest, baddest dog on the block and challenge every CEQA document that these other jurisdictions prepare," Patterson said. Patterson also noted that the proposed plan has a way out. It calls for an annual "status of the general plan" report by the mayor, which he described as a "gut check." One issue almost certain to appear in annual reports concerns upzoning of rural residential districts on either side of the existing city limits. First, the City Council must overcome residents' demand that large-lot zoning remain in place. Then, to implement denser zoning, the building industry will need to assemble numerous existing parcels, some of which might already be developed, Yovino said. "We are making sure that everybody knows this will not be a simple thing to do," Yovino said. "We don't have all of the exact answers." Larry Mintier, of J. Laurence Mintier & Associates, Fresno County's general plan consultant, said reaching agreement on the future of existing rural residential areas has proven sticky. Cities want to grow into those areas, but county supervisors feel a need to protect their constituents' ranchette lifestyles, he said. "I can't think of any other place where we have the extent of rural residential development that we have in Fresno County," Mintier said. "The important thing in the Fresno County general plan is that they are not committing any more land for rural residential development. And, number two, they are setting some limitations on the buildout of these areas." Public hearings on the Mayor's Alternative 2000 Plan are set to begin in October. The Fresno County Board of Supervisors is scheduled to consider the county's proposed general plan on October 3. Contacts: Jim Patterson, Fresno mayor, (559) 498-1560. Nick Yovino, Fresno development department director, (559) 498-1591. Stan Ediger, Fresno County planning department, (559) 262-4242. Larry Mintier, J. Laurence Mintier & Associates, (916) 446-0522. Leonard Garoupa, Madera County planning director, (559) 675-7821. John Wright, Clovis planning and development services director, (559) 297-2340. Fresno Community Planning Library website: http://www.ci.fresno.ca.us/planning_library/index.html

The State Supreme Court decertified a Second District Court of Appeal opinion that overturned portions of Santa Monica's rent control law. The appellate court ruled that Santa Monica could not modify conditions established by state law under which landlords can increase rents for voluntarily vacated units. The court also held that the city cannot demand more information than state law requires when registering rent-controlled units. (See CP&DR Legal Digest, June 2000.) In reviewing the Costa-Hawkins Rental Housing Act of 1995 (Civ. Code §1954.50), the court found that the state "fully occupied" the field of law governing the right of landlords to establish rental rates, whether or not the units are subject to rent control. Under Costa-Hawkins, a landlord can set initial and subsequent rental rates for new tenancies, even for units subject to rent control. The ruling was a rare loss for Santa Monica, which has successfully defended one of the strictest rent control laws in the state for years. While the outcome of the case remains unchanged, affordable housing advocates applauded the state high court's decision, which means the case cannot be cited as precedent. The court issued its decertification order on August 23. The case is Cabinda v. Santa Monica Rent Control Board, 80 Cal.App.4th 853, 2000 Daily Journal D.A.R. 4989.

If you had traveled north through the Owens Valley before 1924, just past the hamlet of Olancha, you would have come upon an amazing site: a large blue lake in the middle of a high desert landscape. Wedged between the snowcapped escarpment of the Sierra Nevada on the west and the equally imposing mass of the Inyo Mountains to the east, Owens Lake was 15 miles long, 10 miles wide and 30 feet deep. Its saline waters contrasted strikingly with the rugged peaks and arid hills, and supported a large population of waterfowl. The Los Angeles Department of Water and Power (DWP) erased that lake with hardly a thought. Starting in 1913, when the agency's 233-mile-long Owens Valley aqueduct began siphoning off the snow-fed streams that tumbled down the east side of the Sierra, the 800,000-year-old lake dwindled rapidly, its shoreline receding year by year until all that remained by the late 1920s was a salt-encrusted playa. Overshadowed by other aspects of Los Angeles' bold colonization of the Owens Valley, the desiccation of Owens Lake attracted little attention for most of the 20th century. Reporters, novelists and screenwriters found it far more dramatic and entertaining to focus instead on the great human struggle between the valley's doomed homesteaders and the big-city power brokers far away. After all, that conflict involved guns and explosives, intrigue and betrayal —themes much sexier than evaporation. In the end, though, the indignant ghost of Owens Lake proved a more formidable adversary for the DWP than desperate ranchers with rifles and dynamite. Now, work has begun on an expensive and controversial project to put some of the city's water back into Owens Lake. It will not appear as it did before 1924, in the days when ducks thronged its marshes and Cartago was a bustling port instead of a memory. But the lake bed will be wet again and sprout vegetation, thanks to tiny particles of dust. When a lake evaporates, it leaves behind its minerals — the salts and other substances leached from rocks and soil over which feeder streams pass. The water becomes brackish and then briny, and a crust of mineral deposits forms as the lake bed dries. That is what happened when Los Angeles began diverting the Owens River into the aqueduct. And when the wind blew down from the mountains, a frequent occurrence, it whipped the dry lake bed's mineral deposits into stinging, alkaline dust clouds. Although residents of the valley pleaded for help, they were ignored for decades. In 1975, the Navy also began complaining, saying that the huge dust storms were interfering with operations at its China Lake Naval Warfare Center. The complaints led to a 1983 state law directing Los Angeles to study the issue and take reasonable measures to control the dust. Monitoring revealed that Owens Lake was the largest single source of particulate pollution in the nation. At least 300,000 tons of dust blow off the lake bed each year (some estimates put the figure as high as 8 million metric tons). Inhalation of tiny dust and soot particles is linked to premature death and serious illness, especially among the elderly and people with respiratory conditions such as asthma. Analysis showed that the Owens Lake deposits contained such carcinogens as nickel, cadmium and arsenic, as well as sodium, chlorine, iron, calcium, potassium, sulfur, aluminum and magnesium. About 40,000 people living from Big Pine to Ridgecrest were put at risk by the dust clouds. In January 1993, the Environmental Protection Agency classified the Owens Valley as a "serious nonattainment area" under the Clean Air Act's PM-10 standard, referring to particulate matter less than 10 microns in diameter (about one-seventh the thickness of a human hair). The EPA ordered the California Air Resources Board to demonstrate how the standard would be met by early 1997. The board missed the deadline, and residents of the Owens Valley filed a notice of intent to sue. The State Implementation Plan was late because of disagreement between the Great Basin Unified Air Pollution Control District and the DWP. The pollution board wanted Los Angeles to control the dust by flooding 35 square miles of the lake bed with enough water to serve 100,000 families; the city balked at the cost and promised a legal challenge. Litigation was avoided with a compromise plan released in July 1998 and approved by the EPA the following month. Work is now under way on a $62 million contract the city signed in July to carry out that plan The first stage is construction of a 5-foot-wide pipeline that will take water from DWP's aqueduct to the upper end of the lake, where it will be allowed to spread several inches deep across 10 square miles of the dusty playa — essentially turning it into a quagmire. The city has agreed to treat another 3.5 square miles in 2002, 3 square miles in 2003, and a minimum of 2 square miles every year thereafter until the air pollution district determines that the PM-10 standards have been met. Besides flooding, the city intends to plant some of the lake bed in 4- to 20-acre "farms" of saltgrass to bind the loose surface, and cover with gravel any areas that still generate dust. The flooding is expected to use about 25,000 acre-feet of water a year. Irrigation for the saltgrass may require another 15,000 acre-feet, meaning the entire project could use 40,000 acre-feet of water a year — as much water as 80,000 Southern California households would use annually. Where DWP will get the water for the long term is uncertain. The city would prefer not to continue tapping its aqueduct. Buying replacement water from the State Water Project and the Colorado River will cost an estimated $13 million a year. "It's going to come from where it needs to come from," said David Freeman, DWP general manager, who is less interested in discussing water supply details than the "warm and positive" relationship he says has developed between the city and the Owens Valley. "A whole new attitude was born with the settlement," he said. Perhaps. But many Owens Valley residents believe the city eventually will pump more local ground water to compensate for water lost to dust control, further withering the valley's vegetation — an issue that in the past has prompted litigation, not to mention gunplay and decades of bitterness. The DWP's expensive dust control experiment might finally put the ghost of Owens Lake to rest, but it is unlikely to close the book on one of the West's most enduring hydraulic dramas. Contacts: David Freeman, Los Angeles Department of Water and Power: (213) 367-1338. Great Basin Unified Air Pollution Control District: (760) 872-8211. Environmental Protection Agency's Owens Lake PM-10 information: www.epa.gov/region09/air/owens/index.html

An appellate court has ruled against environmentalists in a California Environmental Quality Act lawsuit because the project in question was not approved and because environmentalists did not exhaust their administrative remedies. In a peculiar case from Rancho Cucamonga, the Fourth District Court of Appeal, Division Two, ruled that the lawsuit brought by opponents of a 40-home subdivision was moot because the city denied the developer's design review application for a previously approved subdivision. However, recognizing that the controversy could continue, the court still addressed the merits of the case. That is when the court nailed environmentalists for raising issues on appeal that had not been fully aired before the City Council or trial court. The controversy involved 25 acres in Haven View Estates, a gated community in the western San Bernardino County city of Rancho Cucamonga. In 1990, the city approved a negative declaration and a tentative map with extensive flood control conditions. No one challenged the negative declaration or the map. Seven years later, a new developer, Lauren Development, Inc., submitted a design review application for 40 homes on the site. The Planning Commission approved the application in July 1997. But Cucamongans United for Reasonable Expansion (CURE) appealed to the City Council. The group argued that the city should prepare a supplemental environmental impact report because there was new information regarding on-site habitat for the coastal California gnatcatcher, which was listed as "threatened" under the federal Endangered Species Act in 1993. In September 1997, the City Council denied the developer's design review application and declared that no further environmental review was required. The following month, CURE filed a petition for writ of mandate seeking injunctive and declaratory relief. San Bernardino County Superior Court Judge Frederick Mandabach ruled for the city. On appeal, CURE argued that "new information of substantial importance" arose after the city adopted the negative declaration, warranting further environmental review. But the court sided with the city, which argued that because it did not grant the discretionary approval sought by the developer, further environmental review was unnecessary. "Because the city denied Lauren's design review application which prompted CURE's request for an SEIR, the City was not required to prepare an EIR," Justice James Ward wrote for the unanimous three-judge panel. Thus, the lawsuit should be dismissed as moot, the court ruled. Recognizing that development pressures would remain, the court addressed CURE's lawsuit anyway. Environmentalists had argued before the City Council and the trial court that additional review was needed of impacts on Riversidean alluvial fan sage scrub, which provides habitat for the gnatcatcher. But on appeal, CURE focused on impacts to coastal sage scrub (CSS), which also provides habitat for the rare bird. The city contended that CURE had never previously mentioned coastal sage scrub, so it could not raise that issue now. Environmentalists argued they had raised habitat issues sufficiently. The court sided with the city. "Contrary to CURE's contention that the CSS habitat was sufficiently argued below, the general references to the laws pertaining to conservation of endangered species' habitats were far too general and vague to call specific attention to the alleged loss of CSS habitat. General comments made at public hearings cannot satisfy the exhaustion doctrine," Ward wrote. In an unpublished portion of the opinion, the court held that substantial evidence supported the city's decision against CURE's request for supplemental environmental review regarding seismic stability, potential flooding and slope stability. The Case: Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga, No. E024244, 00 C.D.O.S. 6102, 2000 Daily Journal 8059, filed July 20, 2000. The Lawyers: For CURE: Craig Sherman, (619) 702-7892. For the city: James Markman, Richards, Watson & Gershon, (714) 990-0901.

Ben Hulse is director of the San Joaquin County Community Development Department. Long a major agricultural center, San Joaquin County has seen subdivisions rapidly replace farms. The population has grown 63% in 20 years to about 583,000. Earlier this year, the county Board of Supervisors unanimously adopted all 13 of Hulse's recommendations regarding implementation of the eight-year-old general plan. Hulse recommended basing general plan implementation on four values: preserving farmland and natural resources; accommodating growth in cities and communities along transportation routes; creating economic development strategies; and identifying and implementing urban limit lines. He also urged preparation of several follow-up reports and ordinances, as well as an approach that includes all cities, agencies and organizations in the planning process. CP&DR What spurred your report and recommendations to the Board of Supervisors? Hulse The county's general plan anticipated a review every 5 to 10 years. This was first review. The board unanimously approved all 13 recommendations contained in the staff report. There are six directives to preserve agriculture in this county. There are four that are directed towards priorities in communication, coordination, cooperation. There is one directed toward economic development and two towards growth and the need to establish urban limit lines. It's a fairly comprehensive package so that we preserve agricultural land and our resources. We've had to initiate the communication, cooperation and coordination that's necessary with all of the cities and with all of the respective agencies so that we have long-lasting programs. We want everybody to buy into the programs so that they in fact do last. CP&DR Why is economic development important when you want to save farmland? Hulse It is very important because we can't continue in this county to have the same sort of development as we've had in the past and pay the bills in the county; you can't preserve agricultural lands if all the people that move here just have low-paying jobs. People with low-paying jobs put more demands on all of the facilities and services of the county to the point where the county then can't afford to preserve the agricultural lands. And it makes good sense if you're going to, as we suggested, direct growth to the cities and to the urban unincorporated areas that have been designated … to be sure that the cities can afford the infrastructure. Because if they can't, then what happens is instead of intensifying growth in the urban areas, and accommodating that growth, it's just gonna spread right out into the agricultural areas. It's important to have all fronts going at the same time in order to preserve agricultural lands. You have to have successful urban areas to have successful rural areas. Interrelated to that is the need to establish new criteria and standards for annexations, which involves the Local Agency Formation Commission, and to establish urban limit lines so we can provide community separators and identify long-term growth needs for all of the urban areas. … If the cities are either unwilling or unable, either because of infrastructure or because of electorate growth control measures, then the county has to determine whether or not the county wants to establish a process for accommodating that growth. I've prepared general plans either as a member of staff or as a director in five counties. This is the fifth. I relate to everyone the need to look into the future and to be cognizant of the potential adverse affects of growth in the future early so that you can prepare for it. CP&DR Can you give me an example? Hulse In Sonoma County in 1975 we told the Board of Supervisors that if the growth in the cities continued and the growth in the county continued, even under the least impact scenario, that Highway 101 was going to be bumper to bumper from the south county line to Santa Rosa by 1995. It was a 20-year projection. The board laughed at us. They said, "That's ridiculous, Highway 101 will never be bumper to bumper. You guys are trying to scare everyone and the scare tactics won't work." Well, we were wrong. It was 1990, not 1995, when it was bumper to bumper. And now no one is laughing. It's a problem that had it been addressed in 1975 by the entire county and all of the cities, something could have been done. Well, we want to preserve agricultural land in this county, and we need all of the cities and all of the agencies to be involved in making that determination. All I did was spin off the work of the Great Valley Center and Rudi Platzek, who is a planner who has studied all this. And you'll find that I've identified the Great Valley Center activities in the report, both in economic development and preservation of agricultural lands, and potential growth impacts. As a planner, I learned a long time ago, plagiarize any chance you get. CP&DR Steal all the great ideas you can. Hulse Hey, it's Planning Survival 101. Anyhow, I looked at what the potential is in this county, and you'll see a couple of scenarios . In particular, you'll see the year 2080. The State of California list of important farmlands identifies a little over 630,000 acres as important statewide. That doesn't include all the grazing lands in the county. We started looking ahead and identified what would happen if the population projections for this county to the year 2080 would take us up to a little over 3 million — what would happen if development continued in the same fashion as it has in the past? We would wind up with about 210,000 acres remaining in this county. That's a loss of 420,000 acres. In addition, the CalFed project proposes to reduce farmland by 120,000 acres in the Delta and convert it to habitat. You add that to the 420,000 you wind up with 540,000. You quickly see that there is only 90,000 acres left. Projections show that by the year 2080, if growth continues in the same fashion it has been and the population projections are realized, that the Central Valley will be importing food. CP&DR That's hard to believe Hulse It was hard for the Board of Supervisors in Sonoma County to believe that Highway 101 would be bumper to bumper. CP&DR Have you made presentations to the cities yet? Hulse Oh yeah. I've given presentations to Lodi, Tracy, Lathrop, Stockton. The other three are scheduled. CP&DR What was the reception? Hulse We're just starting, and the reception for the most part I would say is amicable. Enthusiastic in a couple of instances. As a result of a prior presentation, our Board of Supervisors went down to the City of Lathrop and met with them jointly to talk about community separators, urban limit lines and an annexation proposed by the City of Lathrop because it appeared contrary to the board's principles. CP&DR Is that the annexation for the wastewater treatment plant? Hulse. Yeah. The newspaper reported … that they agreed to disagree. As far as I'm concerned, we had several opportunities and they were all realized. The Board of Supervisors going to the City of Lathrop and sitting down with them and discussing the specific issues of community separators and urban limit lines and, in particular, the annexation was excellent. We realized an opportunity because we had dialogue and interchange between the City of Lathrop and the Board of Supervisors, even in an area where they didn't reach agreement. The very fact that they were willing to listen to each other's position and to consider their positions and be in the same room at the same time is a tremendous event. It opens up the lines of communication for the future. The first city in this county said we will direct our staff to meet with county staff to identify community separators, urban limit lines, and a program for implementation. The door opened. CP&DR Why don't you use the term "greenbelt?" Hulse I chose the term "community separator" because in certain quarters greenbelt and open space carry negative connotations. I didn't want to deal with that negative side. Also, I chose it because I want community separators to be identified as having functions that are of benefit for the entire community. Community separators are to preserve agricultural land, to preserve natural resources, to preserve streams. They are resource utilization areas. … We also need to direct people away from hazardous areas, like floodplains, and we need to provide recreation areas, parks, trails, even linear parks. And those are all utilitarian uses, beneficial uses, that a community separator can provide. Now, we did not identify habitat conservation as an additional benefit because it may or may not be there. We didn't say that this does provide open space and greenbelt areas as a benefit. That's a side benefit, it's not a utilitarian benefit. It also helps communities establish their boundaries and their individual identification, and that's again a side benefit. There are a lot of side benefits. It's easier to sell something to critical thinkers when they can see the utility behind it. If it is esoteric, it's hard to get them to buy in. … A number of people have attributed everything that's going on here to me. I'm just a catalyst. I brought some experience into this position that will benefit this county, and I made some recommendations, some of which are very controversial. Two years ago this wouldn't have happened. CP&DR What has changed? Hulse All of the communities have become more educated, more aware. What I've been able to discuss with has had some influence on them. But I think probably more than anything the fact that we were able to put together a comprehensive report and identify the real true potential for disaster in the future. We realized the need to get started now, and we will. One of our supervisors said you can have all the words and pretty pictures in the world, but if you don't have the political will it isn't going to happen. I've seen that already with the board. CP&DR You can do all this planning and come up with progressive policies, but how much influence does Sacramento County and the Bay Area have on you? Hulse It's already here. If you look around, to the west, to the south, there are growth control measures all over. And so the pressure to develop in this county is increasing. We're not getting pressure out of Sacramento County because Sacramento County is pretty much accommodating the growth. … It's unlike to the west, where more jobs are being created than housing and so we're getting tremendous pressure to build housing in this county. If Stanislaus County has a growth control measure, it will provide additional pressure on this county. The board's policy is to accommodate the growth, but to accommodate it in the cities. Now that was adopted in '92, and my view of the county's general plan is that it is a good general plan, a good solid foundation … we just need to implement it more. I've been doing this work for the last 30 years. Twenty-five years ago we were proposing "smart growth." CP&DR A lot of people seem to think that smart growth is novel. Do you think it's just solid planning? Hulse It's just traditional. If you go through areas that have developed in the United States along transportation routes, railroads or rivers, what are you going to find? You'll find compact communities. Of course, all over Europe — fly over Italy — you'll see how well preserved the agricultural areas are. CP&DR Do you have a timeline of some sort? Hulse Yes. You'll notice that one of the directives says there is a sense of urgency. I saw a window of opportunity of two years. It's down to a year and a half. CP&DR How did you pick two years? Hulse That's just my own evaluation. I've been looking at the political, legal, administrative and technical sides. Technically, we're finally able to identify what the potential disaster was without a doubt so that I could share that potential with everyone. Legally, we need to identify all of the legal sides that are necessary in order to implement the plan, whether it's to charge conversion fees or to purchase development rights to ensure agricultural lands are available for long-term periods if not for perpetuity. And then politically, this county is ready for it now. We can comprehensively bring everybody in and deal with it as the community of San Joaquin County, not as the Board of Supervisors and each individual city. CP&DR Managing Editor Paul Shigley spoke with Ben Hulse at his office in Stockton.

In an important water rights ruling, the state Supreme Court has held that farmers' long-standing water rights superceded water claims by downstream cities. The unanimous court ruled in favor of seven alfalfa and dairy farmers in the Mojave Valley that had refused to join a pact that allocated water to more than 200 farmers, cities and other entities without regard to historical water rights. "This preserves the farmers' position at basically the top of the water chain," Robert Dougherty, the attorney for the farmers, told the Associated Press. "Cities do take a back seat." In the Mojave Valley, nearly everyone relies on the same water source — the Mojave River, which flows mostly underground. The combination of urban development and desert farming has overdrawn the groundwater supply for decades, causing supply and quality problems for those in some parts of the basin. Ten years ago, the City of Barstow and the Southern California Water Company sued the Mojave Water Agency, the City of Adelanto and other upstream entities. Barstow claimed that the upstream users were hurting its water supply by overpumping. The Mojave Water Agency then filed its own suit against nearly all water users in the basin. The trial court stayed the litigation while the parties worked out a stipulated settlement, or "physical solution," that called for reducing water usage over several years. Nearly everyone agreed to the 1996 settlement, which followed the doctrine of "equitable apportionment" without regard to preexisting rights. The trial court imposed the settlement on all parties, but seven farmers, led by alfalfa farmer Manuel Cardoza, appealed. The Fourth District Court of Appeal ruled for the farmers, holding that the trial court could not ignore preexisting water rights. (See CP&DR Legal Digest , July 1998.) In affirming that ruling, Justice Ming Chin wrote for the state's high court: "Although it is clear that a trial court may impose a physical solution to achieve a practical allocation of water to competing interests, the solution's general purpose cannot ignore the priority rights of the parties asserting them." A court cannot change priorities among the holders of water rights or eliminate vested rights, as the trial court did, Chin wrote. Justice Chin cited California Water Service Co. v Edward Sidebotham & Son , (1964) 224 Cal.App.2d 715: "The first one in time is the first one in right, and a prior appropriator in entitled to all the water he needs, up to the amount he has taken in the past, before a subsequent appropriator may take any." However, the Supreme Court also upheld the appellate court's ruling in favor of the stipulated settlement. The stipulating parties can waive or alter their water rights in a manner they believe in their best interest, the state's high court held. That portion of the ruling provided satisfaction for the cities and water districts. "As a practical matter, we have groundwater management throughout the region," James Markman, an attorney for the Hesperia Water District, told the Los Angeles Daily Journal . The Cases: City of Barstow v. Mojave Water Agency , No. S071728; Mojave Water Agency v. Manuel Cardoza , Nos. E018023, E018681, 00 C.D.O.S. 6973, 2000 Daily Journal D.A.R. 9265, filed August 21, 2000. The Lawyers: For Barstow: Arthur Kidman, Kidman, McCormick & Behrens, (714) 755-3100. For Mojave Water Agency: William Brunick, Brunick, Alvarez & Battersby, (909) 889-8301. For Cardoza: Robert Dougherty, Covington & Crowe, (909) 983-9393.

Property rights advocates won a potentially far-reaching victory with a First District Court of Appeals ruling regarding San Francisco's hotel conversion ordinance. In a takings lawsuit filed by a hotel owner, the court held that the "heightened scrutiny" test applies to the San Francisco law, meaning there must be a close relationship between the exaction and the project's impact. The court ruled that the lawsuit filed by owners of the San Remo Hotel should proceed in trial court. The hotel owners argued that the city's hotel conversion ordinance (HCO) violates state and federal constitutional provisions against taking private property without just compensation. San Francisco's ordinance prohibits the conversion of residential units to tourist use unless the hotel owner replaces the converted units with new affordable housing or pays a substantial mitigation fee. The city has successfully defended the 21-year-old law against repeated legal challenges, but that track record could change. Under the heightened scrutiny test, the city must show both an "essential nexus" between the permit conditions and the impact of the proposed development, and a "rough proportionality" between the exaction and the development's effects. "If the trial court has to apply the heightened scrutiny test to this exaction, the city loses," predicted Andrew Zacks, attorney for the San Remo Hotel owners. "I think the ordinance is in trouble and this case could be the death knell for it. … We think the law ultimately is going to be declared facially invalid." Deputy City Attorney Andrew Schwartz agreed that the heightened scrutiny test would mean trouble, but he argued that court precedent indicates the test should not apply here. "Legislative land-use regulations of general application are to be reviewed in the political process, not in the courts," Schwartz said. He noted the state Supreme Court reached that conclusion last year in a rent control case, Santa Monica Beach Ltd. v Superior Court (1999) 19 Cal.4th 952 (see CP&DR Legal Digest, February 1999). But the court held that San Francisco's regulation is discretionary and not of general application because it applies only to residential hotels, of which the city has about 500. "I think this decision is potentially far-reaching. It would shift policy-making decisions for land use to the courts," Schwartz added. "This decision is a prescription for a very activist court." In response to an affordable housing shortage, the city began regulating the conversion of residential hotels to tourist use in 1979. At that time, the 62-unit San Remo was classified as a residential hotel based on a survey of the hotel operator. The hotel owners, Thomas and Robert Field, dispute that contention, saying they have always provided the majority of rooms to tourists. When the Fields sought permission to provide all rooms to tourists, the city required them to pay a $567,000 conversion fee — equal to $9,000 per room, or 40% of replacement costs — and to offer lifetime leases to long-term tenants. In 1996, the hotel owners paid the fee in protest and sued the city in federal court alleging violations of federal civil rights law, 42 U.S.C. 1983. But the Ninth Circuit Court of Appeals kicked the case over to state court. San Remo Hotel v. City and County of San Francisco (9th Cir. 1998) 145 F3d 1095 (San Remo I); see CP&DR Legal Digest, July 1998. The San Francisco Superior Court sustained numerous demurrers from the city. On appeal, however, the First District, Division Five, ruled that the hotel owners should be allowed to proceed with the case at the trial court level. The Fields challenged both the hotel conversion ordinance itself and the city's application of it to the San Remo. They contended the law does not substantially advance legitimate government interests as required by the Fifth Amendment and that the law forces a small group of property owners to "bear the full cost of providing a general public benefit." Those arguments found favor with the unanimous three-judge appellate panel. Importantly, the court ruled that San Francisco's exaction is discretionary, as were those in Nollan/Dolan. The court specifically rejected the city's argument that the hotel conversion law is a zoning regulation of general application. "The $567,000 mitigation fee obviously was not imposed on every other property in the City," Justice Lawrence Stevens wrote. "Consequently, a heightened level of scrutiny is proper because this is the type of particularized governmental exaction imposed upon a property owner which was seen in Ehrlich." In, Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, the state Supreme Court held that exactions must meet the Nollan/Dolan "essential nexus" and "rough proportionality" standards only when they are imposed ad-hoc on a specific project. Justice Stevens wrote: "The 1990 version of the HCO explicitly states that it demands increased fees from property owners, since other official sources of public funding for low-cost housing became more difficult for the City to procure, thereby shifting the burden of public funding for low-cost housing to the property owner. This is potentially the type of individual taking of property by the government, for an asserted public purpose, which the jurisprudence developed under the takings clause was designed to protect citizens against, and for which heightened scrutiny is appropriate." "We recognize that the HCO may be a well-intentioned measure intended to aid persons on limited incomes by providing affordable housing, but even well-intentioned measures may create unconstitutional takings," Stevens continued. Interestingly, the Fifth District's ruling came only four months after U.S. Supreme Court Justice Antonin Scalia called San Francisco's hotel conversion ordinance extortionate. Scalia argued, but failed, for the high court to take a different case challenging the law (see CP&DR Legal Digest, May 2000). In a written dissent from the court's denial of certiorari, Scalia questioned whether the state appellate court was willing to follow the Nollan/Dolan precedent. Zacks, the San Remo attorney, called Scalia's dissent "an invitation" for the First District to rule as it did. The Case: San Remo Hotel v. City and County of San Francisco, No. A083530, 00 C.D.O.S. 6609, 2000 Daily Journal D.A.R. 8745, filed August 8, 2000. The Lawyers: For San Remo: Andrew Zacks, (415) 956-8100. For San Francisco: Andrew W. Schwartz, deputy city attorney, (415) 554-4620.

"Your money or your life," says the hold-up man in an old Jack Benny joke. "Didn't you hear me, buddy?" the irate gunman says after Jack fails to answer. "I said, your money or your life!" At last, Jack responds: "I'm thinking, I'm thinking!" Jack Benny's difficulty in making up his mind mirrors my struggle with Pacific Shores Center, a 106-acre office park currently under construction in Redwood City. It is true that the project — a group of 10 office buildings containing a total of 1.5 million square feet of space, plus another 160,000 square feet of restaurant, fitness center, and the like — is undoubtedly an improvement over what was there before: a cement plant surrounded by debris next to an island covered with spoils from ocean dredging. It is also true that the new development is considered environmentally friendly because the developer, Jay Paul Co. of San Francisco, has agreed to restore 30 acres of tidal marsh on nearby Deepwater Island, part of the San Francisco Bay National Wildlife Refuge. In exchange for this off-site mitigation, Jay Paul earned the right to fill 14 acres of wetlands on the project site, directly southeast of the lightly used Port of Redwood City. The high demand for office space in the San Francisco and Silicon Valley area (Redwood City lies roughly halfway between The City and San Jose) helps explain why the developer was willing to spend more than five years obtaining entitlements from a host of environmental agencies. Nearly nine months before the project is scheduled to open, the project is already 90 percent leased to four tenants, including Excite@Home, which will relocate 2,500 jobs to Pacific Shores Center and occupy nearly half of the office space. Understandably, the developer seems eager to use the enhanced natural beauty of the site as part of its marketing. The developer bills Pacific Shores Center as the place "where nature, technology and community converge." (As the Brits say, pass the sick-bag.) The marketing seems to be working with some, such as the San Jose Mercury News. "Within a year, thousands of software engineers will fill cubicles in airy waterfront buildings, while mice and shorebirds nestle among fresh strands of pickleweed," a Mercury News story burbles. This kind of writing seems calculated to flatter the pretensions of Northern California techies who like to believe that their lives are in balance with nature. While the site plan of Pacific Shores Center has its merits, it is not a nature preserve (although it overlooks one dimly, across the misty waters). The plan is not elegant, but it is a snapshot of Bay Area culture, circa 2000. Falling in line with the current taste for office park-as-country club, the development features regulation-size baseball and soccer fields, a near-Olympic-size swimming pool, and a jogging path that circles the site. At the center of the development are the restaurant, a "multi-media center," and an outdoor amphitheater. The developer has also made a commitment to use sustainable materials in the construction and to import nearly 5,000 trees. So why am I short of breath when the time comes to cheer? Well, maybe I am asking for too much, but I do not think this project is a model of environmental sensitivity. The developer has taken a tried-and-true formula — the multi-building research "campus" — and imported it to this site, without showing any particular sensitivity to the site itself. While it is exciting that an eyesore like Deepwater Island is getting new life, these mitigations do not excuse the developer from making more of an effort to respect the existing ecology of the site. Why, for example, must half of the development area be covered with asphalt for surface parking? To be sure, the site was not pristine. Still, the area had a number of existing wetlands. Could not the developer have incorporated them into the master plan as open space? The developer's project manager, Peter Brandon, said that restoring wetlands on-site was unfeasible because the surviving sloughs and marshes were filled with chunks of concrete, twisted steel and old tires. Further, these were not sexy tidal marshes, but humdrum wetlands such as fields of pickleweed. Restoring them was too great an undertaking for a commercial project, so the developer opted to fill those wetlands, and perform its wetland-mitigations nearby. At some expense, the developer is removing dirt from Deepwater Island, transporting the soil across the water on barges, and redepositing it along the shore of the project site. The developer is also providing, at the request of public agencies, nearly 13 acres of parks on the shoreline and giving space to a nonprofit educational group, Marine Sciences Institute. That is all very nice, but if I had my druthers, the project would be vertically oriented, not horizontal, to make a smaller footprint on the ground. Brandon said that the developers had the same concern, so they reduced the original number of buildings. The office buildings will be four- and five-stories, higher than the one- and two-story models typical of Silicon Valley. I was also critical of the acres of surface parking; wasn't it possible to put the cars into a parking structure, and open up some more land? Brandon said that the developer is considering enclosing the parking in structures and building residential units above the parking. Now that's an interesting idea. As it stands, however, Pacific Shores Center is a very conventional development on an unconventional site, and that is disappointing. The developer's claim of converging nature and technology still seems misleading. The premise of Pacific Shores Center is not too different from that of the Playa Vista project in Los Angeles, where commercial development is the means — alas, the only means — to achieve some degree of wetlands repair. So why I am being such a pain about Pacific Shores? Maybe I am offended by the exaggerated environmental claims. While I fully believe that the on-site wetlands would have been difficult to restore, it is still disappointing that all the mitigation occurs offsite. At gunpoint, I guess I would say that I support Pacific Shores Center. I just wish the developer had made the choice easier.

In a major victory for developers of Playa Vista, the Ninth Circuit Court of Appeal has reinstated an Army Corps of Engineers permit to fill 16 acres of wetlands. The unanimous three-judge appellate panel overturned a district court ruling that the Corps did not adequately consider environmental impacts of the overall project. The Ninth Circuit held that the Corps did not need to complete an environmental impact statement and that the Corps was correct to review only the wetlands portion of the first phase of the project, not the entire development. Playa Vista is a 1,087-acre proposed development just south of Marina del Rey that has been a source of controversy for nearly two decades. It is one of the last large open spaces in west Los Angeles, but much of its marsh area has been degraded by past development and industrial uses. In 1990, Maguire Thomas Partners (which has since sold the project to Playa Capital Co.) applied to the Army Corps for a permit to fill 16 acres of federally delineated wetlands. In exchange, the developer proposed creating a 26-acre freshwater marsh and 25-acre riparian corridor. The wetlands covered a portion of the area needed for the project's first phase, which was to involve 13,000 homes and 5 million square feet of commercial and office space on 600 acres. (Other, larger wetlands at Playa Vista were not part of this permit.) After a great deal of public outcry and extensive negotiation with various federal agencies, the Corps in 1992 issued the permit under §404 of the Clean Water Act, with special conditions. The Corps also approved an environmental assessment and a Finding of No Significant Impact (FONSI). In 1996, Wetlands Action Network sued the Corps for violating the National Environmental Policy Act and the Clean Water Act. Wetlands Action Network lost the Clean Water Act claim but U.S. District Judge Ronald Lew granted summary judgement for the environmentalists on the NEPA claims. Lew found that the Corps had violated NEPA by limiting the scope of its analysis to impacts of activities covered by the permit, rather than considering the whole project. He further ruled that and EIS was necessary because the efficacy of the freshwater wetlands system was in doubt. The Ninth Circuit said that Lew's findings were correct, but that his legal conclusions were erroneous. Wetlands Action Network argued that the Corps should have studied impacts to the entire 600 acres of Phase I because the wetlands fill was interdependent with the rest of Phase I development. The Ninth Circuit, however, demanded a stronger connection. "The linkage that the district court found between the permitted activity and the specific project planned is the type of ‘interdependence' that is found in any situation where a developer seeks to fill a wetland as part of a larger development project," Judge Melvin Brunetti wrote for the court. "If this type of connection alone were sufficient to require a finding that an entire project falls within the purview of the Corps' jurisdiction, the Corps would have jurisdiction over all such projects, including those which the Corps' regulations cite as examples of situations in which the Corps would not have jurisdiction over the whole project." The interdependence in this case was so weak that Phase I construction could begin, and, in fact has begun, without the §404 permit, the court noted. The Ninth Circuit also rejected Wetlands Action Network's argument that the Corps improperly segmented the project by considering Phase I alone and not reviewing the cumulative impacts of the three-phase development. Instead, the court, citing Morongo Band of Mission Indians v. FAA, 161 F3d 569 (9th Cir. 1998), imposed the "independent utility" test. The court then found that the utility of Phase I "does not depend upon the completion of later phases of the project." Therefore, the Corps need not review all three phases at once. As for the environmental assessment, the Ninth Circuit ruled that Judge Lew's decision "appeals to be largely based on a mischaracterization of the evidence found in the administrative record." Lew pointed to letters from the Environmental Protection Agency and the U.S. Fish & Wildlife Service that raised questions about the proposed freshwater marsh, especially its ability to handle runoff and treated wastewater. Other commentators also questioned the marsh's design. But, the Ninth Circuit held that the Corps considered these issues in the EA, so a more extensive EIS was unnecessary. Brunetti wrote: "The fact that the record also contains evidence supporting a different scientific opinion does not render the agency's decision arbitrary and capricious," as Lew had ruled. The Ninth Circuit also held that it was acceptable for the Corps to issue the §404 permit and the FONSI even though all details of the mitigation plan had not been finalized. Special conditions in the permit were extremely detailed, and filling of wetlands could not commence before the Corps finalized the mitigations, the court ruled. Finally, the court held that controversy in the form of opposition to a development is not adequate to force preparation of the EIS. The Cases: Wetlands Action Network v. U.S. Army Corps of Engineers, Nos. 98-56242, 98-56474, 98-56672, 00 C.D.O.S. 6965, 2000 Daily Journal D.A.R. 9287, filed August 21, 2000. The Lawyers: For Wetlands Action Network: David Williams, Public Interest Lawyers Group, (510) 841-0707 For the Corps: John M. Gleason, U.S. Army Corps of Engineers, (213) 452-3946. For Playa Capital Co.: Charles Treat, Latham & Watkins, (213) 485-1234.

Demand for industrial space in Los Angeles County remains high, but development is not keeping pace. Instead, large-scale industrial projects are going to the Inland Empire, where empty land is plentiful and most local governments have open arms. The trend is distressing to the Los Angeles Economic Development Corporation and some other business boosters, who note that Los Angeles County manufacturing employment has declined in recent years. The manufacturing segment now accounts for only about 13% of jobs in the Los Angeles County, down from 19.5% only 10 years ago, according to the state Employment Development Department. Those figures reflect the loss of about 200,000 manufacturing jobs, mostly in the electronics and aircraft industries. While worldwide economic forces helped alter the composition of L.A. County jobs, several local factors are influencing land development. First, the urbanized portion of Los Angeles County has few vacant sites remaining. Second, redevelopment or reuse of old industrial sites by new industry has proceeded slowly. And, third, local government has encouraged retail development on former industrial sites. Last year, the LAEDC issued a report that said the county as a whole needed to develop up to 21 million square feet a year of new space to accommodate manufacturing and technology jobs. Yet the county was seeing only about half that amount of space developed. Since then, the situation has not changed and vacancy rates have only gotten lower, said Jack Kyser, chief economist for the LAEDC. "The overall industrial vacancy rate in Los Angeles County is down to about 4.7%, which is extremely low," Kyser said. The vacancy rate is even lower in central Los Angeles, Long Beach and the San Gabriel Valley, he said. "There's just not much developable land," said Steve Bloom, a Los Angeles commercial real estate analyst. "That's why the Inland Empire is doing so well." This lack of greenfield sites has caused the LAEDC to focus on "recycling" of older industrial lands. The organization is working on a prototype because environmental cleanup regulations and permitting procedures related to reuse of industrial sites remain ponderous and because local opposition to these projects is common, Kyser said. The LAEDC is especially looking at the Alameda Corridor, a 20-mile-long strip of industry that runs north from the Los Angeles and Long Beach harbors. Extensive rail and truck routes are being constructed to streamline transportation, so heavy and light industry are perfect fits. A number of underused industrial properties lie along the Alameda Corridor, but there has been little talk of recycling them, Kyser said. Bloom said some older sites are difficult to reuse because of obsolete building or parcel configurations. Also, older builders oftentimes are too small for new industries, which want gigantic boxes, he said. And in some instances, transportation corridors have moved away from old industrial districts, he added. The LAEDC also blames cities' focus on sales tax revenue as a hindrance to industrial development. Kyser and other economists argue that a healthy local economy needs a broad range of jobs. Much of the retail development that cities chase results in low-wage jobs. Manufacturing jobs typically pay more, so they bring more money to town, Kyser explained. "This sort of fits into the ongoing debate about job quality in California," Kyser said. A closed General Motors plant in Van Nuys presents something of a case in point. While some of the site was redeveloped for light manufacturing, much of it was converted into "The Plant," a large retail center. Some analysts see a former NASA site in Downey as another lost opportunity. NASA built much of the Space Shuttle and the Apollo equipment in Downey. Now, the city is negotiating with a developer to build retail space, high-tech office space, film industry facilities, schools and a park. David Rodriguez, the city's project manager, said none of the six developers who made proposals mentioned heavy industry for the site, and the city did not pursue it. But he said Downey should get credit for not pursing warehouse and distribution centers, which would have been quickly absorbed but would not have offered the skilled jobs that the proposed project will provide. All of this is not to say that industrial development has ceased in Los Angeles County. A 3.1 million-square-foot project is moving forward in the Dominguez Technology Center in Carson, and the 265-acre Golden Springs Business Park is under construction in Sante Fe Springs. But a good portion of the action is in eastern L.A. County, which is linked to the Inland Empire. A recent report on the San Gabriel Valley by Colliers Seeley, a commercial real estate broker, found that industrial demand was greatest in the Chino submarket, which includes slices of eastern Los Angeles and western San Bernardino counties. That same vicinity contains one of the region's largest industrial projects, called Industry East. Majestic Realty plans to develop 31 buildings ranging from 3,500 to nearly 900,000 square feet apiece during the next 10 years. Still, Kyser, the guru of the Southern California economy, remains concerned. While Riverside and San Bernardino counties snap up industrial growth, the more volatile retail and service sectors expand in Los Angeles County. "He who lives by the retail development dies by the retail development," Kyser warned. Contacts: Jack Kyser, Los Angeles Economic Development Corporation, (213) 236-4820. Steve Bloom, Real Estate News Television, (310) 414-0404. David Rodriguez, consultant to the City of Downey, (626) 304-7891. California Employment Development Department website: www.calmis.cahwnet.gov

A major industrial project in the City of Los Angeles has received approval from the city's new Central Area Planning Commission. However, opponents of the "Cornfield" development next to Chinatown have vowed to continue fighting with a variety of legal and political tools. (See CP&DR Economic Development, January 2000) The commission voted 4-2 in late July to approve Majestic Reality's plans for a 950,000-square-foot industrial and warehouse development on 32 acres of the 47-acre Cornfield. The commission also said a mitigated negative declaration was adequate environmental review. Mayor Richard Riordan supported the project because of its potential to bring 1,000 jobs to an economically depressed district. The site is zoned for industrial uses and it lies within enterprise and empowerment zones. But a coalition of environmentalists, civic activists and environmental justice advocates have vowed to fight city and federal subsidies that would clean up the site, which is a former rail yard. And opponents have strongly suggested they will file lawsuits because the city approved the project based on a mitigated negative declaration, and did not consider the project's impact on people of color. The group would like to see a park, a school and mixed-used development on the Cornfield. The neighborhood currently has no park and no middle- or high school. They also note that an archeological dig on the site in April found remnants of the Zanja Madre (mother ditch), which first carried water to the city from the Los Angeles River in 1781.