LAS VEGAS _ Everywhere you go on the planning and development circuit these days, people are talking about mixed use. But does everybody really want to build it? Or lease it? Or live in it? Or finance it? Sometimes I'm not so sure. I figured the ultimate test was here during the 50th annual convention of the International Congress of Shopping Centers, where 50,000 people in the retail business gathered in one of the biggest conventions in America. (It's so big that the convention center has streets with names – 20th Avenue, D Street – and the biggest retailers and developers have special business cards made up with their Convention Center address on them.) As I expected, everybody is talking about mixed use. But the real estate business, like the planning business, is segregated by sector. You know how the New Urbanists are always complaining about a segregation of uses created by the zoning code? Well, that segregation is also institutionalized in the real estate business as well. There are retail developers, single-family developers, condo developers, business park developers. They each tend to do only one thing and they have specialized lenders and financial partners behind them, who also understand only one of these "asset classes," as real estate people call them. Nevertheless, mixed use was a big topic of discussion at ICSC for a variety of reasons, mostly having to do with money. Some shopping centers have excess land in the form of surface parking lots that could be developed or sold off. In urban areas, the mall owners recognize as well that they can generate more revenue by "going up" – developing housing or office space or some other use in a second, third, or fourth floor. One thing you get at ICSC – which we don't always get at planning events – is the private-sector take on things. Jon Peterson of The Peterson Co., a Northern Virginia-based developer, pointed out that while mixed-use can sometimes minimize market risk by diversifying the real estate development you're building, it can also increase the risk if you lay your chips on something that is out of fashion. "If you're trying to put some office space above a retail component and that office market isn't there and this building is a centerpiece of your project, you can't go forward with it," Peterson said at a mixed-use session. "You're not going to build a 100,000 square foot office building in the middle of your project just to get the ground-floor retail." At the same time, if you don't build the building, you may have a critical hole in the middle of your project. Still, there's a sense that the retail real estate folks are beginning to catch on that mixed use is not entirely newfangled. At the same mixed-use session, Tom D'Alesandro of General Growth in Chicago, which has worked on many master-planned communities, said that in developing Reston Town Center – a New Urbanist downtown in a '70s master-planned community in Virginia – "we took the DNA of the large-scale master-planned community, concentrated it, and condensed it into a more vibrant focus point." They also had to make lemonade out of lemons. Squeezed between three large malls, downtown Reston was never going to get a department store, so they used mixed-use as a substitute. Still, there's always a sense at ICSC that somebody else is making a lot of money off of your idea and you're somehow not realizing that value. One veteran retail broker told me that retail doesn't get a big financial pop from mixed-use – but seems to create value for offices and condos, which get big increases in value as a result. And although he cast his viewpoint as a lament, I think it's not so bad. If tunnel-vision retail developers think more broadly about the mixed-use district and towns they're located in, that's all to the good. - Bill Fulton

A proposal to develop what amounts to a 5,000 housing-unit new town in the foothills of Yuba County is advancing, but the project still faces numerous hurdles. In addition to concerns raised by environmentalists and slow-growth advocates, numerous government agencies have questioned both the project's environmental impact report (EIR) and the wisdom of building a new town in a very rural location nearly 15 miles from the nearest services. Proponents of Yuba Highlands counter that the project is consistent with a 1993 community plan for the area and provides a preferable alternative to additional development of Yuba County's farmland and floodplains. In late May, the Yuba County Board of Supervisors began considering whether to put the project on the ballot. But only one week earlier, the supervisors voted 3-2 to deny an appeal of the Planning Commission's certification of the Yuba Highlands EIR. But, because local practice requires a four-fifths vote for statements of overriding consideration — which the EIR contains because of the project's significant, unavoidable impacts — the effect of the 3-2 vote was unclear, and supervisors are scheduled to make a final decision on the EIR in June. Assuming the EIR is in place, the board could also consider an area plan, a development agreement and a general plan amendment in June. The county's approval of the EIR and project would almost guarantee lawsuits. At least six government agencies — the attorney general's office, Caltrans, the Department of Fish and Game (DFG), the Central Valley Regional Water Quality Control Board, the Sacramento Area Council of Governments (SACOG) and the Northern Sierra Air Quality Management District — have called the EIR inadequate, and some surrounding local governments have expressed concern about the project's traffic, air quality and housing impacts. "They really just bulled their way through and didn't address any of the city's concerns," Marysville Community Development Director Gary Price said. "We think the EIR is completely inadequate." "You are not seeing the complete picture," Jeff Finn, a DFG biologist, told the Board of Supervisors during a standing-room-only public hearing for the EIR appeal. Supervisors Hal Stocker and Mary Jane Griego agreed, saying the traffic, water, wildlife and air quality analyses were incomplete. "If this is a good EIR, I'd hate to see a bad one," said Stocker, an outspoken project opponent whom the developer has tried to disqualify from considering the project. "It has more holes than Swiss cheese." Complicating things further is the project's location adjacent to Beale Air Force Base. Although the Air Force is officially neutral on Yuba Highlands, project detractors say the development would unnecessarily encroach on the 22,000-acre base, potentially threatening its future viability. Yuba County has long been one of the poorest in California. Although it has increasingly become a home to Sacramento-area commuters, the county's unemployment rate remains high: It was 9.5% in April, roughly double the state rate, according to the state Employment Development Department. Per capita income is approximately one-third less than the state average. Partly because of the weak local economy, the county has warmly greeted numerous development proposals. Depending on who is counting, at least 15,000 housing units in a county of only 70,000 people are somewhere in the pipeline — and that estimate doesn't include thousands of houses proposed for the tiny City of Wheatland. During the 1980s and 1990s, Yuba County designated new growth areas. One of them is River Highlands, a 21,800-acre area approximately 20 miles east of Marysville, between Beale and the Nevada County line. The River Highlands community plan, adopted as part of the general plan, designated much of the area for five-acre parcels. A core area, however, was designated for two units per acre. In 2001, developer Gary Gallelli proposed the Yuba Highlands project for the core area. The review process ground on for years until October 2006, when the county released a final EIR. At that point, what had been a proposed specific plan became an area plan because the proposal lacks aspects required of a specific plan, such as detailed infrastructure and financing plans. Early this year, a divided Yuba County Planning Commission certified the EIR and recommended project approval. The project proposes 5,100 dwelling units on about 1,900 acres of the 2,900-acre site. Also proposed are 85 acres of commercial development in three locations, a business park, a golf course, an 81-acre park and three schools. Proponents say the site is ideal for growth because it is not in a floodplain (unlike many new Yuba County developments), nor is the mostly treeless grassland valuable farmland or high-quality oak woodlands. But opponents contend the site is simply too remote, and that its proximity to Beale and the 11,000-acre Spenceville State Wildlife Area is a drawback. The project site has no municipal services, infrastructure, schools, shopping or anything else, Supervisor Griego pointed out. "Just because you're not in a flood zone doesn't mean you are in a proper place to develop," Griego said. "We have enough development to supply us for many, many years to come. We have no shortage of houses." Yuba Highlands would be a 15- to 20-mile drive on two-lane country roads to the nearest urban areas, and, according to the EIR, would generate 24,000 automobile trips a day on only one county road to Marysville. Yet Caltrans, SACOG and the City of Marysville question even that high number, as they contend the EIR's traffic analysis is inadequate because it is based on outdated statistics. They also argue that the EIR improperly defers mitigations. Related to the traffic concerns are air quality — and global warming — worries. The attorney general's office urged county supervisors to reject the EIR because it "completely ignores impacts from greenhouse gas emissions." Yuba County received the attorney general's protest letter only a few weeks after the attorney general sued San Bernardino County for not addressing global warming in a general plan update. Meanwhile, downwind Nevada County is concerned about air pollution from the development. Western Nevada County is a "non-attainment" area because of ozone pollution. Emissions blowing in from Yuba Highlands would more than offset every measure that the Northern Sierra Air Quality Management District has planned for western Nevada County to reach attainment, the district's Sam Longmire said. Richard Thomas, a longtime Sierra Club organizer and chair of Friends of Spenceville, said the development would send 7,000 cars a day on a road through the wildlife area, threatening its integrity. Department of Fish and Game representatives have raised similar concerns and contend the EIR does not fully address the impacts of Yuba Highlands and other new developments on the wildlife area. The DFG's Finn said the EIR contains conclusions without scientific support. And then there is Beale. For decades, the Air Force base has been the cornerstone of Yuba and Sutter counties' economy. The base has about 5,000 employees, making it by far the largest employer in the area. Recognizing that land use conflicts have been a factor in some California base closures, the Governor's Office of Planning and Research is managing a Beale joint land use study with the Department of Defense and other interested parties. So far, the process has identified a number of existing and potential conflicts, but a draft plan, originally due in March, has not been released. Two years ago, Beale's commander expressed concerns about Yuba Highlands. Since then, the commander has changed and the Air Force has gone publicly mute. During recent public hearings, project opponents and proponents have argued over whose position better supports Beale. Supervisor Griego said that a housing development adjacent to the base conflicts with Beale's operations and sends the wrong message to the Pentagon. William Kopper, an attorney for labor unions that appealed the EIR, said the environmental document uses the wrong noise standard. Instead of measuring single-instance noise from Air Force planes, the EIR relies on a 24-hour standard that is skewed by long periods of quiet to suggest that homeowners in the proposed development would not be bothered by military aircraft, he said. But Supervisor Dan Logue said that Beale leaders told him they want to see Yuba Highlands go forward because it would provide housing for Beale personnel, an argument also advanced by some community liaisons to Beale and by retired Air Force personnel. Water is also an issue. Developer Gallelli plans to rely on groundwater — supplied by the Yuba County Water Agency and distributed via a community services district — and the EIR says groundwater is plentiful. However, the Regional Water Quality Control Board contends that the groundwater source is "underflow" of the Yuba River and, therefore, is water under the state's jurisdiction. If that is the case, the state would conduct a lengthy process to determine who is entitled to use the water. Supervisors Logue and Don Schrader both said they were comfortable with the EIR's water analysis because the project will stop if the developer can't get access to water. Project opponents, however, note that courts have been reluctant to accept that line of reasoning. But project backers say the time has arrived to stop studying and move ahead. Richard Floch, a planning consultant for the developer, said Yuba County officials adopted the original River Highlands community plan because they could see growth coming. The Yuba Highlands plan is simply the next step, he said. Contracts are in place to provide water and the Wheatland-based school district is prepared to provide new schools. Planners have clustered housing away from areas that get the most noise from Beale, and they have proposed a mix of commercial and industrial uses to reduce vehicle travel — all of which improves on the original plan, he said. If the county rejects Yuba Highlands, Floch asked, then what is the value of long-term planning? To which Logue says: "I wish we could go back to 1993 because I guarantee I wouldn't have supported this project." Yet Logue appears to be a project supporter now, as does Schrader, albeit a wary one. "Why," asked Schrader, "do I have the feeling this is going to end up before a person with a black robe?" Resources: Yuba Highlands area plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/Yuba%20Highlands%20Area%20Plan/default.aspx River Highlands community plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/River%20Highlands%20Community%20Plan/default.aspx Beale joint land use study: http://www.cajlus.com/beale_home.htm Friends of Spenceville: http://www.spenceville.org/

A real estate company's purchase at a tax sale of townhouses owned by the Los Angeles County Housing Authority is not valid, the Second District Court of Appeal has ruled. How could real estate owned by a public agency get sold for nonpayment of taxes? Erroneously. During the 1980s, E.A. Reeves Partnership contracted with the state to build a low-income townhouse project on lots 14, 15 and 16 of the Springdale Tract, along Willowbrook Avenue, in South Central Los Angeles. After the housing was built, Reeves conveyed the property to the state. However, a scrivener's error in the grant deed omitted reference to parcels 15 and 16. When the state sold the project to the county Housing Authority in 1990, the error was perpetuated. The Housing Authority notified the county auditor of ownership by a tax-exempt entity, but failed to tell the county assessor, which continued to send tax bills for lots 15 and 16 to Reeves. The taxes went unpaid, and in 1995 Hector Nevarez acquired the two lots at a tax sale. When Nevarez failed to pay taxes, the assessor conducted another tax sale in 2003, at which L&B Real Estate acquired lots 15 and 16 for $99,000. When L&B learned that the Housing Authority was asserting ownership, L&B filed suit to clear up the title. The Housing Authority filed a counter-complaint contending the tax deed was void. Los Angeles County Superior Court Judge Alice Altoon ruled that the property could not be sold at a tax sale and the Housing Authority was the owner. Ordinarily, public property is exempt from taxation and, therefore, cannot be sold for nonpayment of taxes. On appeal, L&B argued that the usual rule did not apply because the Housing Authority had waived its tax exempt status by not complying with the Revenue and Taxation Code, because state law required L&B's and Nevarez's tax deeds to be presumed valid, and because the Housing Authority's attempted to invalidate the tax deed too late. A unanimous three-judge panel of the Second District, Division Eight, rejected all three arguments. The statutes cited by L&B for the proposition that the Housing Authority waived its tax exempt statues (Revenue and Taxation Code §§ 5082.1 and 4987) are inapplicable, the court ruled. The first section concerns cancellation of tax liens when property is acquired by the government, while the second regards cancellation of wrongly imposed taxes. As for the presumptive validity of the tax deeds, the court said, "Among the jurisdictional prerequisites to a valid tax deed is property legally subject to being taxed." In this instance, there was no tax liability. To L&B's argument that there was a one-year statute of limitations, the court said the time limit does not apply because "the defect in title was jurisdictional. The Authority remained in possession of the property since 1990." Only in a footnote did the court cut to the chase: The townhouse project straddles all three lots, and a large "Community Development Commission, County of Los Angeles" sign sits in front. L&B did not obtain a title report until after the sale, and that report mentioned documents in the chain of title indicating that all three lots were intended to be conveyed originally. "In short, L&B either knew or should have known it was buying property that belonged to the Authority," Justice Laurence Rubin wrote for the court. A lawsuit in Los Angeles County Superior Court in which L&B seeks return of the $99,000 purchase amount is pending. The Case: L&B Real Estate v. Housing Authority of the County of Los Angeles , No. B189740, 07 C.D.O.S. 3981, 2007 DJDAR 5013. Filed April 16, 2007. The Lawyers: For L&B: Michael Ezer, Ezer, Williamson & Brown, (310) 277-7747. For the Housing Authority: Wayne Grajewski, Brown, Winfield & Canzoneri, (213) 687-2100.

The apportionment of lots in a subdivision is not an "exaction" under the Mitigation Fee Act, a state appellate court has ruled. The ruling stemmed from a Chico City Council decision to alter a subdivision approved by the Planning Commission. The council precluded development on one large parcel and transferred the permissible housing units to an adjacent parcel. The developers argued that this decision amounted to an illegal exaction under the Mitigation Fee Act. But a trial court and the Third District Court of Appeal found that the city's decision fell under the Subdivision Map Act — and that the developer's lawsuit alleging an illegal taking was filed too late to challenge a map act decision. In March 2005, the Chico Planning Commission approved the Oak Valley subdivision of up to 1,300 units on 340 acres in the foothills on the east side of town. The commission authorized 80 to 160 units on "Lot Q." Opponents appealed to the City Council, which in May 2005 affirmed the decision but also approved a motion of intent to limit Lot Q to 80 units. Upon making a final decision on September 20, 2005, the council prohibited residential use of Lot Q and increased permissible development on Lot P by 160 units. The council said Lot Q should remain open space because of its steep slopes, oak woodlands, riparian areas and rare plant species. Developer Tom Fogarty, who has been attempting to sell the project, contended that the City's Council's ultimate decision unconstitutionally reduced the fair market value of Lot Q by $17 million. He filed a lawsuit on December 19, 2005, but did not serve the city with the suit until December 27 — 98 days after the City Council's final decision. Butte County Superior Court Judge Barbara Roberts threw out the lawsuit because the Subdivision Map Act gives plaintiffs 90 days to serve a summons after the date of the public agency's decision. Fogarty appealed, arguing that the Mitigation Fee Act — which gives plaintiffs 180 days — applied. The Mitigation Fee Act (Government Code § 66000 et seq .) permits an attack on fees, dedications, reservations and "other exactions." Fogarty argued that the City Council's decision fell into the "other exactions" category. However, the Third District noted that fees, dedications and reservations all concern either the payment of money or an interest in land — and not land use restrictions. "The interpretation that the plaintiffs champion violates the intrinsic principle of ejusdem generis , under which we should construe general terms following specific terms as embracing only objects similar in nature to the specific term," Justice Rodney Davis wrote for the unanimous three-judge panel. "As the plaintiffs concede, the specific terms in § 66020 all involve divesting a developer of either money or a possessory interest in the subject property. The present land use conditions at issue do not result in either consequence; they are simply a restriction on the manner in which the plaintiffs may use their property." The remedy for a violation of the Mitigation Fee Act is a refund or return of the improper exaction. But in this case, a refund or return would not be possible because nothing was transferred to the city, Davis wrote. Thus, the Mitigation Fee Act — and its 180-day time limit — do not apply, the court concluded. Nothing prevented Fogarty from seeking redress under the Subdivision Map Act (Government Code § 66410 et seq .), the court noted. In May, Fogarty asked the state Supreme Court to review the case. The Case: Fogarty v. City of Chico , No. C052576, 07 C.D.O.S. 2660, 2007 DJDAR 3375. Filed March 12, 2007. The Lawyers: For Fogarty: Douglas Aikins, GCA Law Partners, (650) 428-3900. For the city: James Meeder, Allen, Matkins, Leck, Gamble, Mallory & Natsis, (415) 837-1515.

The City of Poway did not conduct an adequate hearing before issuing tax-exempt bonds for the purchase of a mobile home park, the Fourth District Court of Appeal has ruled. The issuance of tax-free bonds for a housing project requires a public agency to conduct a "TEFRA hearing" (named for the Tax Equity and Fiscal Responsibility Act of 1982), at which the agency accepts public input regarding affordable housing needs. However, there was no evidence Poway officials "brought forth or discussed any information on the provision of low-income housing at the park, a critical element in the maintenance of the tax-free status of the bonds," the court ruled. In addition, the hearing and the city's bond resolution were misleading because they did not explain the precise deal the city was contemplating or the uncertain tax-exempt status of the private entity acquiring the mobile home park, the court ruled. The court rejected arguments from mobile home owners that the city had to abide by earlier oral promises that the city would offer to sell the park to the residents. In 1991, Poway's Redevelopment Agency purchased Royal Poway Mobilehome Park with the intent of preserving affordable housing. Four years later, the Redevelopment Agency transferred ownership to the city, which issued $31.7 million in bonds to pay off the debt remaining on the agency's original purchase. The city and contract employees managed the 399-unit park until 2004, when the city hired Wakeland Housing and Development Corporation for the task. In November 2004, the city announced it intended to sell the park to a 501(c)(3) nonprofit housing corporation using tax-exempt bond financing. Members of the Royal Poway Mobilehome Owners Association protested that city officials said in 1999 that if the city ever sold the park, residents would have a chance to purchase it. The association made an offer in February 2005, but the city rejected it and went forward with its plan to sell the park to Wakeland, even though Wakeland's 501(c)(3) status was pending. The deal was this: The city would issue $32 million in tax-exempt bonds and loan the proceeds, plus another $9.5 million, to the Redevelopment Agency. The agency would then loan all of that money to Wakeland, who would purchase the park for $35.6 million and assume all of the debt payments. At the time, Wakeland did not have a determination from the IRS on 501(c)(3) tax-exempt status. If Wakeland failed to get 501(c)(3) status, the city's backup plan was to have the Redevelopment Agency take ownership of the park. The city filed a validation action to get a court ruling on the legality of the financing plan. Meanwhile, the owners association filed their own lawsuit attempting to block the deal. After the legal actions were combined, San Diego County Superior Court Judge Yuri Hofmann approved the city's request for validation and rejected the owners association's various arguments. The Fourth District overturned part of the decision. The appellate court explained that a local public agency may not issue tax-exempt bonds and loan the proceeds to a private business if the bond proceeds are going to be used for "residential rental property for family units." There is an exception, though, for "qualified" projects in which at least 20% of the units are occupied by individuals whose income is 50% or less of the area's median. These are among the things a city must consider at a TEFRA hearing. Poway noticed a TEFRA hearing on June 14, 2005, at which the city and the Redevelopment Agency approved resolutions approving the bonds and related transactions. The owners association argued in court that there was no evidence at the hearing that Wakeland or its subsidiary, Poway Royal Estates LLP (PRE), was a tax-exempt charitable corporation, and that the city did not satisfy the low-income housing requirements. The city countered that the deal was contingent on Wakeland getting 501(c)(3) status. The city also said it was not required to present evidence regarding affordable housing because the agreement with Wakeland called for 20% of spaces to be available to very-low income residents and for an additional 40% to be available to "lower-income" households. The court was not satisfied. The first step of the city's plan was to loan the bond proceeds to the Redevelopment Agency, which is not a 501(c)(3) charitable corporation, the court noted. "The city explains that to take advantage of favorable interest rates and retire existing debt on the park, it sought to issue tax-exempt bonds before Wakeland or PRE obtained a determination letter from the IRS. For reasons not satisfactorily explained, the city did not refinance the debt itself," Presiding Justice Judith McConnell wrote for the court. "Rather it decided to first loan the proceeds of the bond issuance to the Redevelopment Agency for its interim purchase of the park." " t appears that in a rush to take advantage of favorable interest rates, laudable in and of itself, the city put the cart before the horse," McConnell continued. The hearing did not give the public adequate opportunity to comment on low-income housing, and apparently no such discussion took place, the court found. "We conclude that given the contingent nature of step two of the city's divestiture plan, the uncertain status of Wakeland or PRE at the time of the hearing, and the lack of any information on the low-income aspect of the project, the city's hearing was essentially tantamount to no TEFRA hearing at all," McConnell wrote. As for city officials' oral promises made in 1999 about selling the park to residents, the court concluded that such pronouncements are not enforceable contacts. The Case: Royal Poway Mobilehome Owners Association v. City of Poway , No. D048211, 07 C.D.O.S. 4305, 2007 DJDAR 5486. Filed April 20, 2007. The Lawyers: For the owners association: James C. Mitchell, Mitchell & Gilleon, (619) 702-8623. For the city and Wakeland Housing and Development Corporation: Douglas J. Evertz, Stradling, Yocca, Carlson & Rauth, (949) 725-4000. For the city: Lisa A. Foster, McDougal, Love, Eckis, Smith & Boehmer, (619) 440-4444.

The state attorney general cannot recover fees under the Code of Civil Procedure's "private attorney general" provision, the Third District Court of Appeal has ruled in a Tehama County case involving the Subdivision Map Act and the Williamson Act. The attorney general's office sued the county over a lot-line adjustment that the state argued should have been subject to map act restrictions and Williamson Act findings. The attorney general (AG) won the case and a trial court awarded the AG $173,000 in fees. However, the Third District, citing California Licensed Foresters Assn. v. State Bd. of Forestry , (1994) 30 Cal.App.4th 562, 570, ruled, " n award of attorney fees under Code of Civil Procedure § 1021.5 has always served ‘as a "bounty" for pursuing public interest litigation, not a reward for litigants motivated by their own interests who coincidentally serve the public.'" "The attorney general," Justice Ronald Robie wrote for the court, "needs no encouragement to pursue litigation that is in the general interest of the state's population because, put simply, that is his or her job." The case involved Tehama County Planning Director George Robson's approval in 1999 of a lot line adjustment for the 3,300-acre Burr Valley Estates west of Red Bluff. The property owned by KAKE, LLP, is under a Williamson Act contract, which provides property owners a tax break for not developing their land. Robson approved KAKE's lot line application after determining it would not create more parcels than already existed. In recent years, the state Department of Conservation has expressed concern over Tehama County practices regarding the division of land covered by the Williamson Act. Generally, the Williamson Act bars land divisions unless the resulting parcels would still be of sufficient size to sustain agricultural uses. Tehama County has approved such divisions as long as resulting parcels are at least 40 acres in size. In May 2001, the AG, the Resources Agency and the Department of Conservation sued over the KAKE project, arguing that the lot-line adjustment violated the Subdivision Map Act and the Williamson Act. Retired Lassen County Superior Court Judge Joseph Harvey ruled for the state and eventually awarded the AG attorney fees. The county and KAKE appealed both the ruling and award of fees. In a lengthy, unpublished portion of the decision, the Third District ruled that the county had in fact violated the Subdivision Map Act because the lot line adjustment resulted in 29 parcels, which was at least two more than existed prior to the lot line adjustment. Lot line adjustments may not increase the number of parcels. The court reached its conclusion after a detailed examination of early 20th Century land transactions. KAKE had argued there were 37 or 40 pre-existing parcels, while the state argued there were 21 or 24. KAKE argued that the state's figure was based on the forced merger of lots, which Code of Civil Procedure § 1093 prohibits. But the court concluded KAKE read the law too broadly. After concluding the state was correct and the lot-line adjustment was subject the Subdivision Map Act, the court turned to the issue of attorney fees. The discussion of attorney fees was the only portion of the decision the Third District published, meaning it is the only part of the case that may be cited as precedent. Judge Harvey had awarded the $173,000 based on the "obdurate behavior" of a previous county attorney. The state conceded this was not a proper basis for the fee award and instead argued that the case was an extreme situation and that the AG's costs of conducting the litigation were out of proportion to the any pecuniary interest of the state. But the Third District ruled that under the financial burden criterion of § 1021.5, the attorney general does not qualify for fees. " he pertinent question is whether the public entity deserves a reward for pursuing litigation that was in the interest of a greater spectrum of the public than its own constituents," Robie wrote, citing cases involving lawsuits filed by one local government against another. " pplying the traditional financial burden criterion to public entity litigants will not always preclude a fee award under Code of Civil Procedure § 1021.5, except then the public entity litigant is the state itself, acting through the attorney general. Such a case will always be self-serving, in that the People will always be pursuing their own interests through their chief attorney, whose very raison d' etre is to enforce the laws of the state and serve the public interests of the state's population as a whole," Robie wrote. "To reward the attorney general with attorney fees for pursuing litigation it is his or her duty to pursue would stand the private attorney general doctrine on its head," the court concluded. The decision pleased not only Tehama County but city and county organizations that were concerned about costs and the possibility that the AG's office might make decisions based on the likelihood of winning fees. The Case: People ex rel. Brown v. Tehama County Board of Supervisors , No. C049048, 07 C.D.O.S. 2872, 2007 DJDAR 3650. Filed March 16, 2007. Modified April 11, 2007 at 2007 DJDAR 4803. The Lawyers: For People: Richard Thalhammer, attorney general's office, (916) 445-9555. For the county: Arthur Wylene, county counsel's office, (530) 527-9252. For KAKE, LLP: James Wagstaffe, Kerr & Wagstaffe, (415) 371-8500. Corrections . A case involving enforcement of the Williamson Act in Tehama County and the payment of attorney fees to the state has in fact been published in full. A story in the June edition erroneously reported that only a portion of the case was certified for publication. The case is People ex rel. Brown v. Tehama County Board of Supervisors.

A California Environmental Quality Act lawsuit over the City of Fresno's move to metered water rates has been dismissed because attorneys missed a deadline. Attorneys for the San Joaquin Valley Taxpayers Association did not file a request for a hearing on the lawsuit until 91 days after they filed the suit. Under the California Environmental Quality Act (CEQA), a plaintiff has 90 days to request a hearing. The court ruled that dismissal of the case was mandatory and that the attorneys' error was not "excusable neglect." In 2005, Fresno approved an updated contract with the Bureau of Reclamation for continued delivery of 60,000 acre-feet of water from the Central Valley Project. A condition of the contract requires the city to begin charging for water based on usage, rather than continuing the city's practice of charging a flat rate based on the connection. The taxpayers association, which complained the plan would raise water bills, filed a lawsuit contending that the city's environmental review of the contract extension was inadequate. The group filed its lawsuit on August 19, 2005. But not until November 18, 2005, did the group file with the Superior Court a request for a hearing. Three days later, the city requested dismissal of the lawsuit because the taxpayers association missed the 90-day deadline for requesting a hearing contained in Public Resources Code § 21167.4, subdivision (a). The taxpayers association responded that it had filed the request late because the deadline had been inadvertently "miscalendared" and no one realized it until late on the afternoon of November 17. At that point, no one could get the hearing request to the courthouse in time, the association said. Fresno County Superior Court Judge Rosendo Peña ruled the association had failed to show excusable neglect and dismissed the case. The taxpayers association appealed, but the Fifth District Court of Appeal upheld the decision. On appeal, the taxpayers association argued that the city's request to dismiss the case was moot because the association had filed its request for a hearing. The basis for the city's dismissal request "no longer existed when the dismissal motion was filed and served," the group argued. The Fifth District called this argument "wrong on the facts." The court ruled: " violation of the 90-day deadline existed at the time the motion to dismiss was filed and the violation still exists today. The late-filed request for hearing did not cure the violation." The taxpayers association argued that the missed deadline can be cured if a request for hearing is filed before the motion to dismiss, as occurred in this case. But the court rejected that argument, too. The statute "means what it plainly says — the request for a hearing must be filed within 90 days from the date the petition was filed," the court ruled. In an unpublished portion of the opinion, the court determined that the missed deadline was not excusable error because, upon realizing the impending deadline with time to act, the association could have filed the request for hearing by fax or delivered the request to a court drop box before 5 p.m. on deadline day. The Case: Fiorentino v. City of Fresno , No. F050578, 07 C.D.O.S. 4994, 2007 DJDAR 6340. Filed April 5, 2007. Modified and ordered partially published May 4, 2007. The Lawyers: For Fiorentino (San Joaquin Valley Taxpayers Association): Raymond Carlson, Griswold, LaSalle, Cobb, Dowd & Gin, (559) 584-6656. For the city: Lisabeth Rothman, Hatch & Parent, (310) 440-9996.

The City of Alameda's approval of a development and disposition agreement (DDA) with a developer for restoration of an historic theater and construction of a new theater and parking structure was a "project" under the California Environmental Quality Act, the First District Court of Appeal has ruled. The ruling was a loss for historic preservation advocates who did not challenge the City of Alameda's environmental review of the DDA when the city approved the study. Opponents of the Alameda project argued that the city should have conducted new environmental reviews when it approved the project design and use permits after signing the DDA. The opponents argued that a fair argument could be made that those subsequent actions may have a significant impact on the environment. But the court ruled that, because the mitigated negative declaration for the DDA was in place and unchallenged, the fair argument standard did not apply. Rather, the opponents had to show that the project or circumstances had changed, or that new information had become available. The opponents failed that test, the court ruled. The historic Alameda Theatre, a 1932 art deco structure designed by the firm Miller & Pflueger, is what has stirred preservationists. The theater is on the National Register of Historic Places and is important for Alameda's Park Street historic district. However, the building has sat mostly vacant since 1979. In 2000, the city began exploring options for rehabilitating the theater. After finding no interest in reopening the building as a single-screen cinema, the city pursued a larger project that involved restoration of the historic theater, and construction of a multi-screen cineplex and 350-space, six-story parking structure next to the existing theater. After a series of public meetings, the City Council, also acting as the Community Improvement Commission (Alameda's redevelopment agency board), approved a DDA with Alameda Entertainment Associates in early May 2005. Under the DDA, the city would acquire, assemble and prepare all of the necessary real estate, renovate the theater, build the parking garage and provide grants and loans totaling $2.9 million to the developer, which would build and run the new cineplex. In June, the Alameda Planning Board approved the designs of the cineplex and parking structure, and a use permit for the parking structure. Preservationists, calling themselves Citizens for a Megaplex-Free Alameda, appealed the decision to the City Council and urged preparation of an environmental impact report. On August 16, 2005, the City Council upheld the Planning Board and declined to do additional environmental review. On September 29, 2005, the Planning Board approved a use permit for the cineplex. Again, preservationists appealed and, again, the City Council on November 1, 2005, upheld the Planning Board and found no reason for further study. On October 3, 2005, the citizens group sued the city for allegedly violating the California Environmental Quality Act (CEQA). They argued that, under the fair argument standard, the mitigated negative declaration was inadequate. They also argued that, under the substantial evidence standard, the city had failed to address new information made available at the time of subsequent decisions. Alameda County Superior Court Judge Bonnie Sabraw ruled that the lawsuit was filed too late to challenge the mitigated negative declaration. Sabraw found that the group could challenge the subsequent August and November decisions — but not under the fair argument standard. The judge found that the substantial evidence standard applied, and ruled that substantial evidence supported the city's decision that the project had not changed and no new information warranting further study was available. A unanimous three-judge panel of the First District, Division Five, upheld Sabraw. On appeal, the citizens group argued that approval of the DDA did not amount to approval of a project under CEQA because other land use approvals were necessary. Thus, they argued, they should be allowed to challenge the mitigated negative declaration on which the subsequent decisions relied. The court disagreed. "Citizens' argument misapprehends the definition of ‘project,'" wrote San Francisco Superior Court Judge Maria Miller, sitting by assignment to the First District. "Under CEQA, ‘project' refers to the underlying activity which may be subject to approval by one or more governmental agencies; it does not refer to the each of the several approvals sequentially issued by different agencies. Here, the underlying activity is quite plainly the work agreed to by the parties to the DDA — the restoration of the Alameda Theatre and the construction of the cineplex and parking structure. This constitutes the ‘project' within the meaning of CEQA." Under the CEQA Guidelines, "approval" occurs upon the earliest commitment for funding or land use approvals, Miller continued. The DDA committed the city to acquire and assemble parcels, grant and loan specific amounts of money, perform demolition, grading and remediation work, renovate the theater and build the parking structure. "Our examination of these provisions leaves us with no doubt that the city's execution of the DDA constituted an ‘approval' as that term is defined in the Guidelines," the court ruled. Thus, preservationists had 30 days from the May 3 DDA approval to contest the mitigated negative declaration — a deadline the group missed by four months. Challenges to subsequent determinations by the city are subject to the more stringent substantial evidence standard. The citizens group argued that a report it commissioned by a local historian and testimony at an August historical advisory board hearing amounted to new information that should trigger preparation of an EIR. The court, however, determined that this information could have been known when the city adopted the mitigated negative and, therefore, did not require preparation of a new environmental document. The Case: Citizens for a Megaplex-Free Alameda v. City of Alameda , No. A114941, 07 C.D.O.S. 3376, 2007 DJDAR 4231. Filed March 29, 2007. Modified April 24, 2007 at 2007 DJDAR 5688. The Lawyer: For Citizens: Susan Brandt-Hawley, (707) 938-3908. For the city: Ellen Garber, Shute, Mihaly & Weinberger, (415) 552-7272. For Alameda Entertainment Associates: Donald Black, (707) 576-7850.

The City of Fresno's policy of not requiring mitigations for developments' impact on state highways is illegal, according to the Fifth District Court of Appeal. In an expansive ruling, the court stepped into the middle of the long-running feud between Fresno and Caltrans over mitigation fees. Fresno has refused to impose fees on new development to pay for highway improvements, because city officials said Caltrans could not justify the fees. "The policy is illegal because CEQA does not allow agencies to approve projects after refusing to require feasible mitigation measures for significant impacts," Justice Rebecca Wiseman wrote for the court. The unanimous three-judge panel also rejected the city's baseline for studying the project that brought about the litigation. The project is mix of offices, a shopping center and apartments on nearly 40 acres. In the environmental impact report, the city compared the impact of this project with impacts expected under full build-out of existing zoning for an office park, rather than comparing the project with the site's existing condition as vacant land. The court determined that the EIR was misleading. In December 2004, the Fresno City Council amended the general plan and the Woodward Park community plan, rezoned property and approved Zinkin Development Company's proposal for a 39-acre site at North Friant Road and North Fresno Street, one block off Highway 41. The project called for 274,000 square feet of offices, a 203,000-square-foot shopping center and, tentatively, 20 apartments. The city certified an EIR for the project and adopted a statement of overriding considerations because a variety of significant impacts could not be mitigated. The Woodward Park Homeowners Association and Valley Advocates sued, arguing that the city failed to require feasible mitigation for significant cumulative traffic impacts, performed an inadequate analysis of cumulative air quality impacts and project alternatives, rendered the general plan internally inconsistent and inconsistent with the community plan, and used an improper procedure to adopt the statement of overriding considerations. Fresno County Superior Court Judge Wayne Ellison rejected all of the project opponents' claims. The groups appealed a portion of the ruling, but the Fifth District actually expanded the issues. The court started with the environmental baseline. The city and developer argued that the EIR was adequate because it evaluated the project's impacts in relation to the vacant land and a hypothetical large office park permissible under existing zoning. That approach would have been acceptable, the court ruled, but it wasn't what happened. Instead, the EIR used the comparison with hypothetical development to obscure the project's true impacts, the court found. " he EIR never presented a clear or complete description of the project's impacts compared with the effects of leaving the land in its existing state," the court ruled. "Readers who have been told that the air pollution impact is slight and that the traffic generated will be less than the given benchmark should not have to stop and puzzle it out that these conclusions are based on a comparison with a large office park that is not, in fact, there. Those who did puzzle it out were still left wondering whether the impacts would be slight or major in relation to vacant land." The court found the EIR's required "no project" alternative invalid for similar reasons: The no project alternative was based on full build-out under existing zoning, not on leaving the site undeveloped. The court continued the theme into its consideration of the statement of overriding considerations. The court found that the EIR presented project alternatives as substantially more intensive than the proposed project, yet the statement of overriding considerations dismissed the alternatives as smaller and less economically beneficial. This misled the public, the court determined. The real difference between the project and alternatives was the inclusion of a shopping center in the Zinkin plan. "If the statement of overriding considerations had said accurately that the alternatives proposed ‘no shopping center or a smaller shopping center' instead of inaccurately ‘no development or development to a lesser degree,' it would have made a far different impression on the public. We do not have to look far to find a reason why the city might not have wanted to use the accurate language since many project opponents, especially neighbors, concentrated their fire on the shopping center component of the project," Justice Wiseman wrote for the court. Moreover, the city did not make the statement of overriding considerations available to the public prior to the public hearing at which the City Council approved the project. At that hearing, a city planner "misrepresented the contents of the statement" to a skeptical councilman, the court found. After identifying all of these legal inadequacies, the court considered the issue of highway mitigation. The city and Caltrans had argued about the number of peak hour trips the project would generate and the assessment of fees to fund offsetting Highway 41 improvements. Ultimately, Caltrans insisted on $306,000 to fund the project's fair-share of an $11 million southbound auxiliary lane. City staff members, however, advised the Planning Commission and the City Council that Caltrans had not provided adequate proof of a nexus between the project and the mitigation fee — and that charging such a fee would therefore be illegal. The city imposed no impact fee. In fact, the city has refused similar Caltrans' fee requests since at least 1998. "Simply stated: The city's practice is illegal," the court ruled. "There is no foundation for the idea that the city can refuse to require mitigation of an impact solely because another agency did not provide information. The seed of the city's confusion, as evidenced in the city staff report to the Planning Commission and City Council, is its belief that the city needs to require mitigation of this category of impacts only if Caltrans proposes a mitigation measure and then proves to the city's satisfaction that the measure is legal. This is not how CEQA works." "Here is another way of putting the point. The city may view this matter as a conflict between it and Caltrans. In referring to Caltrans in the context of this issue at oral argument, counsel for the city said it was ‘their issue' and argued that this court should not reach it because Caltrans had not appeared as a party. In reality, the conflict between the city and Caltrans is irrelevant to the city's obligation to require mitigation of impacts. The city's failure to resolve this conflict and require mitigation of these acknowledged impacts only punishes the public. CEQA does not permit this to happen," the court concluded. Although it rejected the EIR, the court did not find the project in conflict with the general and community plans. The Case: Woodward Park Homeowners Association, Inc. v. City of Fresno , No. F049481, 07 C.D.O.S. 3914, 2007 DJDAR 4948. Filed April 13, 2007. The Lawyers: For the homeowners association: Richard Harriman, (559) 226-1818. For the city: Geralyn Skapik, Burke, Williams & Sorensen, (951) 788-0100. For Zinkin Development: James McKelvey, Motschiedler, Michaelides & Wishon, (559) 439-4000.

The Sacramento County Water Agency and the East Bay Municipal Utility District (MUD) broke ground on an historic water project in May. The Freeport Regional Water Project will provide water for growth in South Sacramento County, including the cities of Elk Grove and Rancho Cordova, while East Bay MUD will be able to pump up to 133,000 acre-feet of water during drought years to supplement the district's reservoirs. For three decades, East Bay MUD fought Sacramento interests over the district's attempt to take water from the lower American River. In 2000, the district reached an agreement with the Sacramento County agency, the City of Sacramento and the Bureau of Reclamation, an agreement that led to the Freeport project (see CP&DR Environment Watch , December 2001). Water agencies in the San Joaquin Valley and Southern California, which feared the project would threaten their supplies, sued over the project but lost. Rather than pumping directly from the American River, East Bay MUD and the Sacramento County agency will divert water from the Sacramento River at Freeport, about 10 miles below the Sacramento River's confluence with the American. A pipeline will tie in with East Bay MUD's existing Mokelumne Aqueduct. The project will also provide water to the Cosumnes River during times of low flow in hopes of re-establishing a salmon fishery. Among the areas that will be served by the Sacramento agency is the 20,000-unit Sunrise-Douglas community plan area in Rancho Cordova. Earlier this year, the state Supreme Court rejected a water analysis for the project because it did not adequately describe long-term water sources and the impacts of using those sources (see CP&DR , March 2007). Although the ruling was a victory for environmentalists and a blow against the development, the Sacramento County Water Agency expects to start delivering water from the Freeport project to the community plan area within three years. Flood safety improvements in Sacramento took two steps forward recently. In mail balloting, 81% of Sacramento-area landowners approved a property tax increase of about $35 for a typical house. The tax is expected to provide about $326 million over 30 years as a local match for state and federal flood control spending. In addition, the Bureau of Reclamation and the Army Corps of Engineers in May filed a record of decision approving improvements to Folsom Dam. The $1.3 billion-project includes construction of a new spillway that is intended to improve flood safety. The project also makes a future 3-foot height increase of the dam possible. Sacramento has the worst flood protection of any major American city, but planned projects such as the Folsom Dam improvements and levee upgrades would give Sacramento 200-year flood protection. The Los Angeles City Council has approved a master plan for revitalizing the Los Angeles River. The plan calls for making a 32-mile stretch of the river into an environmental, recreational and aesthetic asset, rather than simply a concrete-lined flood control channel (see CP&DR Places , April 2007). However, plan implementation will cost an estimated $2 billion and the city has identified few solid funding sources. Fresno County Supervisor Bob Waterston resigned from the Fresno County Local Agency Formation Commission two days after the Fresno Bee ran a story raising conflict of interest questions. Waterston voted for six City of Sanger annexations to accommodate subdivisions proposed by RZR Enterprises, even though his pool-building business was doing work for the Orange County-based developer. Pools by Waterston built a pool and other amenities for model homes in one RZR subdivision on which the supervisor did not vote, according to the Bee . Waterston's company also built six pools in two other subdivisions for which he did cast votes in favor of annexation, and the company was listed as the exclusive pool builder for the subdivisions. A county supervisor since 2001, Waterston was appointed to LAFCO in 2003 and was chairman when he quit. In a letter of resignation, he denied that his business interests influenced his vote, but he apologized "for my lapse in judgment creating the perception of a breach of trust." A federal judge has ruled that the U.S. Department of Energy failed to address radioactive and toxic waste at the closed Santa Susana Field Laboratory in the hills between Simi Valley and the San Fernando Valley, an area considered for residential development. U.S. District Court Senior Judge Samuel Conti ruled that the federal government's review of the site was inadequate under the National Environmental Policy Act (NEPA) and he barred a transfer of ownership until the government satisfies NEPA. From the 1950s until 1996, the site was a center of nuclear research and test facilities. A 1959 partial meltdown of one of the reactors is considered the biggest nuclear accident in U.S. history, and there is believed to be widespread radioactive and chemical pollution on the 290-acre site. The site is encompassed in a 2,400-acre site now owned by Rocketdyne Propulsion, which built and tested engines there. The Department of Energy remains responsible for all environmental cleanup, however. The case is NRDC v. Department of Energy , No. 04-04448. Four water agencies in the Santa Clarita Valley have reached an agreement regarding the cleanup of groundwater contaminated by perchlorate, a chemical used in making rocket fuel and explosives. Whittaker-Bermite and Remediation Financial, Inc., will pay $100 million for replacement wells and pipelines and for a treatment plant to remove perchlorate from groundwater. Perchlorate contamination has become a public health and water planning issue in the Santa Clarita Valley since the contaminant was first detected in wells seven years ago. Environmentalists have successfully sued over environmental impact reports and water plans that did not adequately account for the contamination (see CP&DR Environment Watch , June 2006; CP&DR Legal Digest , December 2005) and have a pending Los Angeles Superior Court lawsuit against the Castaic Lake Water Agency over the agency's plans for addressing perchlorate. The 1,000-acre Whittaker-Bermite site was used for the manufacture of munitions, flares and other explosive devices for at least 50 years until it closed in 1999.

Local governments in the Central Valley are starting to adopt policies that require developers to mitigate the conversion of farmland to urban uses, primarily by acquiring agricultural easements or paying in-lieu fees. San Joaquin County has become a hotbed for the new policies, and farmland advocates are hoping to export those policies to other places. The City of Stockton — which has plans to expand into more than 5,000 acres of outlying cropland and pastureland — adopted one of the most aggressive mitigation ordinances in the state in February. The new ordinance requires developers of projects of at least 40 acres (which is nearly all projects in Stockton) to offset their impacts by acquiring agricultural easements elsewhere in San Joaquin County. Developers must purchase one acre of easement for every acre of farmland they develop, and the protected land must have comparable soil quality to the land being developed. Developers of smaller projects may pay a mitigation fee of $9,600 per acre. For the program's first year, developers of larger projects may also pay the fee; after that, they must locate and buy easements themselves. Stockton adopted its agricultural land mitigation program only three months after San Joaquin County adopted a similar one. Other cities in the county — including Tracy, Lathrop and Manteca — recently started charging mitigation fees for development of farmland. "It's undisputed in my mind that farmland protection policy has picked up serious profile," said Bill Martin, executive director of the Central Valley Farmland Trust, which is administering Stockton's new program. For differing reasons, local government officials, farm advocates and developers are closely studying the new city and county policies in San Joaquin County. The policy discussion definitely has reached beyond San Joaquin County: • Stanislaus County planners are working on an update of the general plan's agricultural element, and they see the San Joaquin County program as sort of a model, said Ron Freitas, Stanislaus County planning director. • In Fresno County, the Fresno Council of Governments has received a $200,000 grant from the California Partnership for the San Joaquin Valley to create and implement a model farmland conservation program. • In Merced County, the local farm bureau and others are pressing for inclusion of agricultural mitigation policies in a general plan update. • Gov. Schwarzenegger's proposed budget contains $10 million from Proposition 84 for the creation and implementation of mitigation programs, according to the Department of Conservation. Under an agricultural conservation easement, which can last anywhere from 20 years to perpetuity, a landowner essentially sells his right to develop, typically for one-third to two-thirds of the existing value of the land. For years, environmental impact reports have specified the loss of farmland as a significant impact of a development or plan. However, unlike mitigation for impacts to animal and plant habitat, mitigation for agricultural impacts has been ad-hoc at best. A few jurisdictions have required developers to buy agricultural easements or set aside farmland, but most mitigation is not based on any definitive policy. A 2003 court ruling threw into doubt whether the California Environmental Quality Act (CEQA) can be used to require mitigation. In Friends of the Kangaroo Rat v. California Dept. of Corrections , No. F040956, the Fifth District Court of Appeal ruled that it was not possible to mitigate the conversion of farmland with an agricultural easement (see CP&DR Legal Digest , January 2004). The state Supreme Court depublished the decision so it did not establish a precedent, but the ruling still stands. However, other legal activity is at the root of the policy shift in San Joaquin County. The local chapter of the Sierra Club filed and settled three lawsuits — one over Lathrop's approval of the 11,000-unit River Islands project in Lathrop, one over the South San Joaquin Irrigation District's extension of new water service to Tracy, Lathrop and Manteca, and one over Stockton's adoption of a larger sphere of influence. "The ball really started rolling on farmland mitigation when the Sierra Club started suing local governments in the San Joaquin Valley," observed Ed Thompson, California director of the American Farmland Trust. The Sierra Club settled the River Islands lawsuit during late 2003 when developer Cambay Group agreed to provide $200,000 to help establish a farmland trust and pay $2,200 an acre (adjusted for inflation) for every acre it develops in the 4,800-acre project. That deal provided the template for the environmental group's settlement with the irrigation district in which the three cities involved agreed to establish a farmland mitigation program and charge $2,000-per-acre development fees. In 2005, the club dropped its suit against Stockton when the city agreed to adopt a mitigation program. Erik Parfrey, a leader of the Sierra Club's Mother Lode chapter who helped spearhead the lawsuits, gives a great deal of credit to Cambay Group and the local governments for agreeing to fund and implement "real programs." Stockton originally agreed to a mitigation fee of only $3,200 an acre, Parfrey said. However, a study prepared last year by Economic & Planning Systems and ESA Associates found that a fee of $9,000 an acre was needed to acquire easements. Although developers and the local chapter of the Building Industry Association protested, the City Council accepted the study and eventually voted 6-0 to charge a $9,600-per-acre fee. "The legal authority is there, it just takes the political will of these city councils and boards of supervisors to do the right thing," Parfrey said. None of these ideas is new. Since 1995, the City of Davis has had a farmland preservation policy. In 2001, Davis strengthened the policy and now requires developers to preserve in perpetuity two acres of farmland for every acre developed. In addition, the preserved land must be adjacent to the development site. Since 1995, Davis has secured agricultural conservation easements on more than 2,000 acres surrounding the town. But Davis's anti-growth politics are the antithesis of attitudes in most of the Central Valley, where property rights have stood supreme. Attitudes may be changing at least a bit, partly because some well-known property rights defenders — including local farm bureaus — have become advocates for farmland mitigation and partly because recent trends in farmland conversion have people worried about the future of the Valley's $25 billion-a-year agricultural industry. Merced County may have more acreage (nearly 10,000 acres) covered by agricultural easements than any county in the state because of the establishment of a farmland trust in 1991. The trust has since merged with others into the professionally staffed Central Valley Farmland Trust. Local politics in Merced County, however, have been staunchly pro-growth, and the county did not sign up for the Williamson Act (see sidebar) until 2000, said Diana Westmoreland Pedrozo, executive director of the Merced County Farm Bureau. The farm bureau regularly requests four-to-one mitigation of urban development, she said. Most development has been approved with no mitigation at all for the loss of farmland, although the county did require one-to-one mitigation for the new University of California campus and a few other projects. "Mitigation is a way to keep track of our land," Westmoreland Pedrozo said. "It's really hard for the people in ag to compete with the speculative development. What we've become here in the north San Joaquin Valley is the housing market for the Bay Area." Indeed, development — much of it low-density housing tracts — has been swallowing up about 20,000 to 25,000 acres of Central Valley farmland every year since at least 1990. The rate at which landowners are canceling Williamson Act contracts, a precursor to development, has never been higher, according to Brian Leahy, head of the Department of Conservation's Division of Land Resource Protection. And at the current rate and density of development, the Valley will lose about one-seventh of its irrigated farmland by 2040. Organizations such as the Great Valley Center have been shouting about these conversion numbers for years, and it appears that people are starting to listen. During recent public workshops for the San Joaquin Valley Blueprint Process (see CP&DR Insight , May 2007), preservation of farmland often emerged as the top priority. "There is an undercurrent," said Stanislaus County's Freitas, "that we have a finite resource here, and we have a strong agricultural base." Whether the policies being adopted are adequate is a question still being debated. One-to-one mitigation still means that 50% of the farmland is lost to development, Westmoreland Pedrozo pointed out. Martin, of the Central Valley Farmland Trust, called the $2,000-an-acre fee imposed by some cities "woefully low" because agricultural easements often run $5,000 to $10,000 an acre. Thompson, of the American Farmland Trust, argues that mitigation should reflect the use of the converted land. Low-density development, especially the 1.5- to 20-acre ranchettes that sprawl across the Valley, waste land and should provide substantially more mitigation acre-per-acre than a dense subdivision, he said. Parfrey, of the Sierra Club, raised the issue of CEQA and suggested the law be amended to specify that acquisition of an agricultural easement is acceptable mitigation for the conversion of farmland. Those questions aside, the nature of the conversation appears to be changing as farmland mitigation policies start to take root. Contacts: Bill Martin, Central Valley Farmland Trust, (916) 687-3178. Ed Thompson, American Farmland Trust, (530) 753-1073. Ron Freitas, Stanislaus County, (209) 525-6330. Diana Westmoreland Pedrozo, Merced County Farm Bureau, (209) 723-3001. City of Stockton agricultural land mitigation program: www.ci.stockton.ca.us/CD/PlanningDivision.cfm Department of Conservation Williamson Act status report 2006: www.consrv.ca.gov/DLRP/lca/stats_reports/2006%20Williamson%20Act%20Status%20Report.htm Agricultural Land Protection Grows Although some local governments are adopting policies intended to protect farmland, Gov. Schwarzenegger's revised budget proposal released in May eliminates state funding for the Williamson Act, the state's largest farmland preservation program. Under the Williamson Act, landowners who agree not to develop their property for 10 years receive property tax reductions of 20% to 75%. About 16.6 million acres of farmland and ranchland — roughly one-third of all privately owned land in California — are protected by the Williamson Act, according to a Department of Conservation's status report released in May. About 820,000 acres were enrolled in the Farmland Security Zone (or "Super Williamson Act"), which provides even greater tax breaks for 20 years of protection from development. The state backfills property tax revenue lost by counties because of the Williamson Act. However, Gov. Schwarzenegger has proposed eliminating the subvention, saving the state about $39 million during the 2007-08 fiscal year. Gray Davis proposed a similar cut when he introduced the 2002-03 and 2003-04 budgets, but both times he added the money back. Schwarzenegger waited for the "May revise" to cut the Williamson Act subvention. Because Schwarzenegger proposed the cut later in the process, many people are taking it very seriously. During a news conference, the governor said of the cut: "We thought we can use that money for better use." The Sacramento Bee , which opposes the cut, blamed Susan Kennedy, who was Davis's cabinet secretary and is now Schwarzenegger's chief of staff. Others noted that the governor's office released the May revise shortly after Assembly Minority Leader Mike Villines (R-Clovis) had called Schwarzenegger a RINO — Republican in name only. Villines represents Fresno County, which is the largest recipient of Williamson Act subventions. Assemblyman Tom Berryhill (R-Modesto), whose district includes all or portions of six Central Valley and Sierra counties, announced he is "adamantly opposed to his attempt to balance a budget on the backs of rural counties I represent." Local government officials say they may drop out of the Williamson Act program without the subventions. The California Association of Counties, the Regional Council of Rural Counties, the League of California Cities and the California Chapter of the American Planning Association have submitted a joint letter opposing the governor's proposal. "Eliminating the subvention payments is the first step towards a total unraveling of the broadest based agricultural program in the state," the letter states. Top 5 recipients of Williamson Act subventions in 2005: • Fresno County, $5.6 million • Kern County, $4.8 million • Tulare County, $3.5 million • Kings County, $2.7 million • San Joaquin County, $1.9 million

A few weeks ago, I attended an Urban Land Institute event dedicated to hyping Los Angeles's newfound urbanity. It was a panel discussion on the windy roof of an old office building at 3801 Wilshire Boulevard, just across Western Avenue from the historic Wiltern Theater and catty-corner to the Red Line stop at Wilshire and Western. The 23-story building, a modernist building designed by architect Claude Beelman during the early 1960s as the headquarters for Getty Oil Co., has recently been renovated by Forest City Enterprises as condominiums. You can walk across the street to the Wiltern or a block or two to Koreatown stores and restaurants. The Red Line gives you immediate access to Universal City, Hollywood, and downtown. The Urban Land Institute event trumpeted "The Mercury," as Forest City has dubbed the building, as the epitome of car-free urban living. If you can afford it. Forest City is selling the condominiums for about $700 per square foot. That means a nice two-bedroom condomium – featuring windows on two sides and great views – runs about $1 million. A few evenings later, I found myself in the cramped living room of a single-family home in Ventura – one of about 180 moderate-income, affordable units developed a decade or so ago by local developer Lynn Jacobs, now the director of the California Department of Housing and Community Development. Because of the affordability requirements, the homeowners bought their houses at a discount and can sell them only at a restricted sales price of between $300,000 and $400,000. Recently, these homeowners said, the nature of their neighborhood had changed. New homeowners had more people – especially more adults – living in their houses. Four, five, six people were on the mortgage titles in order to qualify for financing. Seven, eight, nine cars were parked on the street in front of these houses. The Southern California real estate market is increasingly driven these days by affluent people who want to live an urban lifestyle and poor people who want to live a suburban lifestyle. No one could have predicted this peculiar trend as recently as a decade ago. Rich people moving to a high-rise condo and riding public transit was simply unthinkable. But this situation is a fact of life today all across Los Angeles. This is the opposite of what planners plan for. Planners generally assume that affluent folks want to live in large houses – mini-mansions – on large lots. They also tend to assume that starter homes will house nuclear families of one or two adults and a few kids who will bring with them maybe a couple of cars. They assume that rich people have lots of cars and poor people have none. But this is where the striking change in the Southern California economy over the last 20 years comes into play. The simple fact of the matter is that metropolitan Los Angeles is no longer a middle-class place. It is a place where some people have a lot of money and most people have relatively little money – the "working poor," as they have come to be known. The affluent folks drive the market. They tend to bid up the price of everything, especially housing that they like or that is trendy. In a place like central Los Angeles, the cost of developing or redeveloping anything is so extraordinarily high – construction costs alone run close to $200 per square foot – that developers have little choice but to target the high end of the market. That's how a condominium in an office building that's been empty for a decade can cost $1 million. Meanwhile, the less affluent folks struggle to keep up. Short-term trends aside, the cost of housing has consistently gone up over the last decade in Southern California while average wages have gone down. The median home price is 10 times the median household income – the historic rule of thumb for a balanced market was 3 – and, in many areas, home prices are more like 15 times the median income income. So the working poor are doubling, tripling, and quadrupling up – not to rent but to buy. And it's not hard to see why. If a $500,000 house requires $100,000 of income to qualify for a mortgage, then it only makes sense that multiple wage-earners making $20,000 to $30,000 each would join together to buy the house – and live in it. They're living in overcrowded conditions, to be sure, but at least the occupants own and control those overcrowded conditions. That's much better,and probably cheaper, than renting a small apartment that they don't control. And even among the working poor, most adults have their own cars, especially if they live in suburban areas, which puts a strain on driveways, lawns, sidewalks, and streets. The garage is usually out of the question, because it's used for living space. This overcrowding trend among the working poor is coming on strong, of course, at the same time that cities and counties are under tremendous pressure to make new housing more affordable to this very same population by cutting parking ratios dramatically. Clearly, one of the many consequences of the current trend is a parking crisis in suburban neighborhoods all over Southern California. But that's only an indicator. Underneath will be considerable social and cultural stress as suburban neighborhoods change. Over the next few years, home prices will level off and incomes – though they've been generally declining – might go up a little. This will relieve some pressure, but there's not much else on the horizon to indicate that this problem will get better. Overall, incomes will remain low and housing prices will remain high. Not very many rich people will want to relocate to large lots on the urban fringe. And the working poor are not going to live in overcrowded apartments – without cars – if they can possibly avoid it. Once again, cultural change is running up against postwar planning assumptions in California. So California's planners will have to rethink once again what good planning means and what a good city – or suburb – is.