WASHINGTON _ The Supreme Court's splintered decision on wetlands protection is likely to result in more litigation for federal agencies and new attention to California water boards’ expansive jurisdiction over the state’s waters. In a ruling issued in June, the justices divided three ways in a pair of cases brought by Michigan developers challenging the Army Corps of Engineers’ expansive claims of jurisdiction over wetlands remote from recognized waterways. A bloc of four conservatives led by Justice Antonin Scalia voted to significantly narrow the Corps’ power to regulate filling or clearing of wetlands, while four liberals voted to uphold the Corps’ current approach. Justice Anthony M. Kennedy cast the pivotal vote in an opinion only for himself that rejects the Corps’ existing regulations. Instead, Kennedy said the Corps has jurisdiction over a wetland only if it has “a significant nexus” to a navigable waterway. Under Supreme Court precedents, Kennedy’s opinion in should provide the controlling rule, but experts and advocates on all sides agreed the fractured ruling promises continuing uncertainty and litigation. “The decision introduced a lot more questions than answers,” said M. Reed Hopper, a principal attorney with the Sacramento-based Pacific Legal Foundation, who argued the case for the two developers before the high court. “There has to be more litigation.” Hopper called the ruling “a significant victory” because the upshot of Kennedy’s pivotal vote was to set aside the decision by the federal appeals court for Michigan upholding the Corps’ jurisdiction over the disputed wetlands in the cases. Environmental advocates acknowledged that the ruling leaves the Corps’ authority unsettled. After initial disappointment, however, some saw Kennedy’s opinion as a positive sign for environmental enforcement. “The bad sign is that it’s going to create enormous administrative headaches,” said Tim Searchinger, a senior attorney with Environmental Defense in Washington. “The good side is that Kennedy accepts in theory every argument that we’ve made for why wetlands adjacent to streams need to be protected.” In California, the State Water Resources Control Board sent out word on the day of the high court decision that the state’s all-encompassing Porter-Cologne water act may plug any gaps if federal authority is trimmed. “Our state legal definition of ‘waters of California’ is far more extensive and far more expansive than the federal definition,” said water board spokesman William Rukeyser, citing the act’s operative phrase. Like the federal Clean Water Act, state law requires a permit before filling or dredging wetlands. State and regional boards have essentially followed the Corps of Engineers’ lead on wetland issues, according to Kenneth Bogdan, a lawyer with the land use consulting firm of Jones & Stokes in Sacramento. Rukeyser said water boards may have to “polish up” the state’s procedures if federal jurisdiction changes. A building industry lawyer agreed on the broad reach of California law, but warned of likely new controversies if the state and regional water boards step into the breach left by receding federal jurisdiction. “I would not be surprised if there’s a legal challenge to the state board’s interpretation of their authority to regulate wetlands as expansively as they have articulated it to be,” said Paul Campos, general counsel for the Home Builders Association of Northern California. Regulations issued by the Corps of Engineers dating to 1977 define its jurisdiction to cover any wetlands “bordering, contiguous or neighboring” to a navigable waterway or tributary. The high court’s liberal bloc, led by Justice John Paul Stevens, said the regulation was a permissible interpretation of the Clean Water Act’s provisions. In his opinion, Scalia said the Corps’ definition went “beyond parody” to cover everything from storm drains and ditches to topographical features dry most of the time. As a narrower test, Scalia said a wetland should be covered only if has a “continuous surface connection” to a “relatively permanent, standing, or continuously flowing” body of water. In his opinion, Kennedy faulted Scalia for adding new tests not found in the statute, but chided Stevens for failing to limit the definition of “navigable waters” at all. Kennedy said his “significant nexus” test would be met “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as navigable.” Significantly, Kennedy suggested that the wetlands in both of the Michigan cases might meet his test. In his opinion, Stevens noted the possibility that a wetland could be covered if it met either Kennedy’s or Scalia’s test. Barbara Vlamis, who has worked on California vernal pool issues extensively as executive director of the Butte Environmental Council, called Kennedy’s test “reasonable” while sharply criticizing Scalia’s definition as “narrow and myopic.” Protecting “ephemeral wetlands” is necessary to avoid “severely degraded watersheds and tributaries,” she said. Environmental experts as well as a government lawyer agreed, however, that Kennedy’s “significant nexus” test would mean more work for the Corps of Engineers to justify its jurisdiction on a case-by-case basis. “It’s going to be a mess in a discrete number of cases,” said Malcolm Stewart, an assistant solicitor general who helped write the government’s brief in the case. Bogdan noted that applying either of the tests poses special difficulties in California and other parts of the West, where water channels are often dry for parts of the year. “This is a land that’s filled with different kinds of wetland water resources where the hydrological connection to a traditional waterway is challenging,” he said. In his opinion, Kennedy, a native Californian, noted that the Los Angeles River “often looks more like a dry roadway than a river,” but has periodic releases of “powerful and destructive” volumes of water. For their part, critics of the Corps of Engineers’ approach saw the ruling as a message to the agency to cut back rather than try harder to claim jurisdiction over wetlands with tenuous connections to recognized waterway. “It’s time for the federal government to take a step back and heed the admonishment in the to defer to local and state regulators in their role on land use decisions,” Campos said. Kennedy in his opinion and two other justices in separate opinions urged the Corps to try to write rules defining its jurisdiction more precisely. Chief Justice John G. Roberts Jr., who voted with the conservative bloc, noted that the Corps had opened a rulemaking process following the court’s 2001 decision in , 531 U. S. 159, 168 (see , May 2001, , February 2001). That decision barred the agency’s jurisdiction over “isolated” wetlands. The rulemaking process “went nowhere,” Roberts said. Liberal Justice Stephen G. Breyer delivered a similar message. “Today’s opinions, taken together, call for the Army Corps of Engineers to write new regulations, and speedily so,” he said. The Case: , No. 04-1034, 06 C.D.O.S. 5260, 2006 DJDAR 7661. Filed June 19, 2006. The Lawyers: For Rapanos: M. Reed Hopper, Pacific Legal Foundation, (916) 419-7111. For the U.S.: Paul Clement, solicitor general, (212) 514-2203. Contributing Editor Kenneth Jost, a former editor of the , is Supreme Court editor for .

A little more than a year after hurricane Katrina turned New Orleans into a r eal-life Atlantis and focused scrutiny on flood-imperiled cities nationwide, California voters will be asked this fall to spend billions to prevent a Katrina-size disaster in the heart of their own state. But despite widespread agreement that something must be done about the aging system of levees, the $4.09 billion flood bond’s prospects on November 7 seem uncertain at best. For one thing, voters appear to be in a tight-fisted mood. Offered relatively painless opportunities to spend money on two feel-good programs — borrowing to build libraries and taxing rich people to finance pre-school — voters on June 6 rejected both propositions by wide margins. The November general election could be an even more troubling environment for spending proposals. The flood measure is one of five major bonds on the November ballot. The collective price tag is a record-setting $42 billion, a deluge of prospective borrowing big enough to daunt even the most spendthrift voter. The money would finance everything from school and road construction to low-income housing, water projects, and habitat conservation. The flood-protection bond also is carrying some extra political baggage. Levee repairs financed by the bond proceeds would be largely exempted from the rigorous analysis requirements of the California Environmental Quality Act (CEQA). That exemption is contained not in the bond bill, but in separate legislation, AB 1039, by Assembly Speaker Fabian Nunez (D-Los Angeles) and signed by the governor on May 19. That legislation also extends the CEQA exemption to seismic retrofit work conducted with the proceeds of a highway bond also on the November ballot. Water and flood-protection districts have long sought CEQA exemptions for their favorite projects, and appending such a clause to the bond might have posed a thorny dilemma for environmental advocates. Flood projects typically have the potential to disrupt riparian and aquatic ecosystems, some of the most vulnerable and compromised elements of California’s natural heritage. But actively campaigning against the bond measure because of the associated CEQA loophole would put die-hard environmentalists in the position of arguing that fish and trees are more important than farmers and homeowners. Environmental organizations so far have declined to take issue with the CEQA exemption. The bill was tailored to apply only to repairs of existing structures, not their enlargement or relocation, minimizing its effect. The Sierra Club, “concentrated on trying to insure that there would be no CEQA jailbreaks in the bonds, and it appears there were not,” state Legislative Director Bill Allayaud wrote to the group’s members, The flood bond’s more significant potential liability is its conflation of two related but distinctly different threats: possible collapse of the aging network of farm levees in the Sacramento-San Joaquin River Delta, and inadequate protection for urbanizing floodplains in and around Sacramento. The bond measure mashes them together and throws wads of money at the whole mess, leaving the precise allocation among competing ideas and priorities unspecified and subject to future negotiations between the Legislature and the governor. Yet the two problems have very different origins, involve very different sets of public-policy decisions, and have different long-term solutions. The threat in the Delta clearly has statewide significance. Some 1,100 miles of earthen levees form a precarious barrier protecting land that is generally below sea level. The Department of Water Resources (DWR) last year concluded that a moderate earthquake on one of the many seismic faults west of the Delta would cause at least 30 breaks. That would flood 3,000 homes and 85,000 acres of cropland, close the Port of Stockton and two highways, disrupt electricity and natural-gas supplies, and send 300 billion gallons of sea water toward the pumps supplying drinking and irrigation water to two-thirds of California through the Central Valley Project and State Water Project. The other Central Valley flooding issue pertains to urban development in the floodplains of the Sacramento and American rivers. Multiple dams and 1,600 miles of levees protect about 400,000 people in and around Sacramento, which faces the highest risk of flooding of any major American city, according to the Sacramento Area Flood Control Agency (SAFCA). The agency has spent more than $300 million during the past 10 years repairing, strengthening and raising levees, and estimates it needs to spend twice that much again. However, it is hard to make the argument that taxpayers statewide have an obligation to defend floodplain development in the Sacramento region. Supporters of the flood bond may find it difficult to craft a clear campaign pitch for a measure that makes no meaningful distinction between the two types of threats. The fact that development continues unabated in the flood prone Central Valley may not help the campaign, either. According to an analysis of regional development plans conducted in Katrina’s wake by the , at least 115,000 new homes are in the pipeline for land in the valley that is protected by levees and has been flooded repeatedly in the past. The total, according to the newspaper’s analysis, could be as high as 170,000 units, but no one really knows because no single agency keeps track. “Levees are piles of dirt,” Jonas Minton, a former deputy director at DWR now with the Planning and Conservation League, told the . “They have a tendency to fail. If people are living behind levees, many feet below the water surface, it is only a matter of time ’til some of them flood.” The flood bond does contain one unambiguous objective: It would commit the state to developing a formal Central Valley flood plan to replace the mishmash of statutes and structures that have developed over the past century without any real coordination or oversight. According to Alf Brandt, a consultant to the Assembly Committee on Water, Parks and Wildlife, this comprehensive approach is a direct response to the landmark decision in (113 Cal.App.4th 998; see , January 2004). In , the Third District Court of Appeal concluded that the state’s acceptance of substandard levees made it legally and financially responsible for the failure of those structures even if it had nothing to do with building or maintaining them. Contacts: Alf Brandt, Assembly Committee on Water, Parks and Wildlife, (916) 319-2096. Bill Allayaud, Sierra Club, (916) 557-1100. Disaster Preparedness and Flood Prevention Bond Act of 2006: http://leginfo.ca.gov/pub/bill/asm/ab_0101-0150/ab_140_bill_20060519_chaptered.html

A state District Court of Appeal has rejected a property owner’s contention that design review permits for two houses in San Mateo County were “deemed approved” because the county failed to act on his applications within 60 days. The court ruled that the permits could not be deemed approved because neither the county nor the applicant had notified the public that deemed approval was a possibility. The case involved an interpretation of provisions in the Permit Streamlining Act that give an agency 60 days to approve or deny a project that is exempt from environmental review. The question for the court was whether “a statement that the project shall be deemed approved if the permitting agency has not acted within 60 days” must be included in the public notice. A unanimous three-judge panel of the First District, Division Five, answered affirmatively. And because such a statement did not appear in the county’s public notice, the project could not be deemed approved, the court ruled. In early 1999, Thomas Mahon applied to San Mateo County for design review to build two houses on adjacent lots on Second Street in the unincorporated beach town of Montara. County planners determined that the projects were exempt from environmental review under the California Environmental Quality Act and conditionally approved the permits within the 60-day period. However, in October 1999, planners concluded that Mahon’s neighboring property owners did not receive notice of the design review permit applications as required by state law and county policy. The county then mailed notices to property owners within 300 feet of Mahon’s property and posted a notice on the project site. The notices did not state that the permits would be deemed approved if the county failed to act within a certain time period. Soon thereafter, objections came pouring in from neighbors and the Mid-Coast Community Council. Opponents complained that the proposed houses were too large and did not conform to county design standards. One year later — in October 2000 — county planners conditionally approved one of the houses. Neighbors appealed, and the county Planning Commission upheld the appeal. Mahon then appealed to the Board of Supervisors, which in August 2001 sent the application back to the Planning Commission for consideration of a new design. Mahon submitted revised plans, but apparently nothing happened until early 2004, when Mahon hired legal counsel. Mahon’s attorney advised the county that the permits were deemed approved because the county had failed to act within 60 days of the Board of Supervisors’ decision to remand the matter, or within 60 days of Mahon’s submission of revised plans in July 2002. The county rejected the “deemed approved” contention, and the Planning Commission then denied design review permits for both houses. Mahon sued the county, arguing that the permits were deemed approved. San Mateo County Superior Court Judge Robert Foiles ruled for the county, and the First District affirmed the decision. The First District found no published case that addressed the question at hand. “In sum,” Presiding Justice Barbara Jones wrote for the court, “we are confronted with the following: (1) a project cannot be deemed approved without ‘public notice required by law,’ but § 65956 does not define what ‘public notice required by law’ means; (2) the statute specifies an notice must advise that the application will be deemed approved unless acted upon within the statutory time period, but the statute does not specify what is to be included when the agency gives notice.” Mahon argued that because the agency provided the public notice, the notice need not include a warning about deemed approval. Mahon also contended that he did not have to provide public notice because the county’s notice was adequate. The court disagreed, holding, “ e see no reason why ‘public notice required by law’ would mean one thing if notice is provided by the agency and another if provided by the applicant.” Mahon argued that if the county was required to provide notice of the possibility of deemed approval, the county could rig the process — and thus avoid the mandate of the Permit Streamlining Act — by never providing such notice. Again, the court disagreed, noting that the applicant himself had the ability to provide the public notice triggering the deemed approval provision. “If an applicant wishes to avail himself of deemed approval, the statute requires him initially to advise the agency that he intends to do so,” Justice Jones wrote. “The agency may then be spurred to provide the ‘public notice required by law’ itself, relieving the applicant of this chore. But even if it does not, the applicant can provide the public notice and preserve the potential for deemed approval. This process serves the purpose of the Act to avoid protracted delays in processing permit applications while protecting the interests of neighboring landowners.” After concluding that the notice was inadequate under the statute, the court declined to consider whether adjoining landowners have a distinct due process right to notice of the potential for deemed approval. The Case: , No. A110171, 06 C.D.O.S. 4156, 2006 DJDAR 6065. Filed May 18, 2006. The Lawyers; For Mahon: Ron Zumbrun, (916) 486-5900. For the county: Kimberly Marlow, county counsel’s office, (650) 363-4250.

So, the smart growthers have their candidate for governor. No statewide public figure in California has been more closely identified with “smart growth” and “New Urbanism” than Phil Angelides. This affiliation didn’t matter in the Democratic primary. And it probably won’t matter in the general election, either. But it will matter if Angelides is elected. The Democratic nominee’s election is not the current betting in most quarters, of course. Angelides – currently the state treasurer – is the anti-Schwarzenegger, a skinny guy who is a bit awkward on the stump, and it’s hard to imagine him defeating the Governator. But 2006 is shaping up as a Democratic year. Schwarzenegger is still recovering from last year’s political wounds. And the anti-Schwarzenegger approach just might work. After all, California has a long history of electing boring career politicians (Deukmejian, Wilson, Davis) running against the rich and famous (Mike Curb, Dianne Feinstein, Al Checci). So it is worth thinking about what Angelides the governor would be like for planning and development. There is little doubt that Angelides, if elected, would pursue an aggressive smart growth agenda. The big question is whether he could move it successfully. Partly, of course, that will depend on how much political capital he will have if he wins. But it will also depend on factors beyond his control – most importantly, the infrastructure bonds and the economy. If the infrastructure bonds pass, then moving a smart growth agenda will require Angelides to expend a lot political capital on the distribution rules for the bond money. If the economy tanks, as happened to Wilson in 1991, then no one will care what his approach to growth is. But the big challenge will be the California Environmental Quality Act (CEQA), whose needle of reform Angelides will have to thread to succeed. Angelides’ bona fides as a true believer in smart growth and New Urbanism are real. His primary opponent, Controller Steve Westly, depicted Angelides as an anti-environment developer — and his longtime connection to major Sacramento builder Angelo Tsakapoulos (who really does have the record of an anti-environment developer) didn’t help. Although Angelides has been a greenfield developer, however, he has not been a standard suburban sprawl developer. He was the developer of California’s first New Urbanist project – Laguna West in Elk Grove, designed by Calthorpe & Associates during the early 1990s. So immersed was Angelides in New Urbanism that during the 1992 presidential campaign, he arranged to have Bill Clinton speak at the Laguna West Town Center and turned his Clinton introduction into a lecture on the virtues of New Urbanism. Clinton, characteristically, won the crowd over (not too difficult after the droning introduction) by making a joke about New Urbanism. Since his election as treasurer in 1998, Angelides has been a regular on the smart growth speakers circuit – and has learned to use the peculiar powers of the office he holds to promote that agenda. California’s treasurer is powerful because the office was the final political resting place of the brilliant Jess Unruh, who spent much of the 1970s and ’80s setting up little-known but powerful committees controlled by the treasurer’s office. As a board member of the California Public Employment Retirement System, Angelides has promoted not only socially responsible investment but also infill development, and as a result PERS now has considerable investments in infill projects for the first time. As chair of the Low-Income Housing Tax Credit Committee, Angelides has changed the scoring system for projects to include proximity to transit stops and other smart growth ideas. As a result, “tax credit developers” have had to become infill and transit-oriented developers as well. Angelides’ approach has been shaped partly by the powers of his office, which deal with finance. But his approach was also shaped by the policies of the most successful state-level smart growth politician of the last decade, former Gov. Parris Glendening of Maryland. Eschewing a regulatory approach as too politically risky, Glendening instead focused on the state budget, changing spending priorities to encourage infill development and greenfield preservation. If elected, Angelides can be expected to take the same approach – perhaps relying on AB 857, the mostly ignored 2002 law that requires all state actions to promote infill development, compact greenfield development, and protection of agricultural and open space land. If the $37 billion in infrastructure bonds passes, it will give him a huge smart growth club. But it’s not at all clear that he will have enough political capture to wield that club. And even then, he won’t be out of the woods because inevitably he’ll get sucked into the CEQA reform battle. The bonds cut both ways for smart growth. The housing bond has $850 million to support transit-oriented housing, and the parks bond also has some smart growth rhetoric. But the big kahuna on the ballot is the $20 billion transportation bond. That bond is tilted toward roads rather than transit. And historically it’s been impossible for even the strongest politicians to muscle transportation money away from the pork barrel crowd and use it to shape growth. So the transportation bond is just too big to ignore, but Angelides’ chances for meaningful change would be fairly slim – especially if the bonds got more votes than he did, or (as seems likely) growth patterns are not much of an issue in the campaign. But that would be only part of the Angelides dilemma, because if he truly wants to promote infill development, he will have to tackle CEQA. Most experts agree that CEQA is one of the biggest obstacles to infill development. Nearly all infill projects have to go through a CEQA analysis, meaning they lead developers down the familiar path of uncertainty in terms of time and money. And because most infill occurs in congested urban neighborhoods, CEQA highlights infill’s weak spot: traffic. So far, reformers have been able to only nibble around the edges – a little-used exemption here, a juice bill for Jerry Brown in downtown Oakland there. In theory, Angelides could create the perfect Nixon-goes-to-China scenario on CEQA. Only a liberal Democrat with a loyal environmentalist following could take on CEQA and streamline review for infill projects. In seeking to streamline CEQA for infill, however, Angelides would inevitably get pinned down between warring factions. On the one hand are the environmentalists, who view CEQA not only as a tool of environmental protection but also as a tool of citizen empowerment – and who also believe that urban residents are among those citizens who need the most empowering. On the other hand are the homebuilders, who believe that CEQA reform is too important to limit to infill situations, especially because – as Angelides himself would be hard-pressed to refute – most new housing development in the state will still occurs on greenfield sites. More than one American governor has been cut down in the crossfire over state-level regulations on growth – which, in California, is what CEQA amounts to. If Gov. Angelides had only to worry about spending money in a smart growth way, he would make some progress and he could call that a victory. But he needs a win on the CEQA front as well. Unless he can persuade the enviros that an infill exemption is a good thing – and then persuade the builders that it’s better than nothing – he won’t succeed as California’s smart growth governor.

The south Orange County city of Lake Forest is poised to approve a plan that would not only permit 5,400 housing units, but would help tie together what are now two distinct parts of town. The plan could also give the city a large sports park, a new city hall and a true town center. All of this is possible because of a project that did not go forward — a civilian airport at the now-closed El Toro Marine Corps base, which lies just west of Lake Forest. The properties in question all lie under the old El Toro flight path and would have been under an even busier flight path had the base become an airport. Orange County voters, however, vetoed the airport, and the base is now being redeveloped with thousands of housing units and a large park. Existing zoning of the vacant Lake Forest property calls for 9.8 million square feet of industrial and commercial development because industrial uses were considered compatible with the airport noise. The proposed plan rezones most property for residential or retail uses. “It could lend itself well to residential development,” said Gene Spindler, vice president of Shea Properties, which is working with Baker Ranch Properties, owner of 380 acres in the plan area. “The dilemma was that it was under the flight path for El Toro and for OTX if it had ever occurred. The only reason it was ever designated commercial was because of the flight path.” Indeed, the flight path — and a corresponding noise corridor — carved a swath through Lake Forest on either side of the Foothills Transportation Corridor toll road. The area has been quiet since 1999, when the Marine Corps closed the base, but the properties remained designated for industry while the battle over the 4,000-acre military base was waged. When voters formally killed the El Toro airport with passage of Measure W in March 2002 (see , March 2006, April 2002), owners of land underneath the flight path began approaching Lake Forest officials with notions of residential development. The city inherited the industrial and commercial zoning designations from the county when voters in 1991 approved incorporation of the community that had been known as El Toro. (Lake Forest is the name of a large development in the town.) The city has no desire to maintain the industrial and commercial designations because the city already has extensive industrial development, noted Cheryl Kuta, Lake Forest senior planner, and because Lake Forest is adjacent to the gigantic Irvine Spectrum, which offers miles of business parks. The city decided that a comprehensive planning effort was in order, and it invited the owners of all 13 parcels under the flight path to participate. Six owners with 838 acres agreed to work with the city, and their noncontiguous parcels became the subject of the city’s “opportunities study.” About three years ago, the landowners submitted concept plans for a total of 6,600 housing units. The city used those plans as something of a starting point. “This is the rest of the city. Everything else is built out,” explained Kuta. “We wanted to make sure we looked at this comprehensively.” After more than two years of planning, workshops and environmental review, the city earlier this year unveiled the preferred plan. In addition to 5,415 housing units, the plan calls for a 45-acre sports park and city hall/civic center complex, about 150 acres of open space and neighborhood parks, and 650,000 square feet of retail space. What is crucial for the city, said Kuta, is the public benefits component, especially the sport park and civic buildings. The city of 78,000 people now has only one significant sport facility, and city hall is in leased office space. “We really saw this as our opportunity to tie the city together with more like uses, and to provide the community gathering place that our general plan has called for,” Kuta said. Under the plan, developers are required to sign a development agreement committing them to providing the sports park and civic facilities. Developers are also expected to sign a mitigation agreement with the local school district to upgrade existing classrooms and provide for new ones, and to provide extensive road improvements, including the long-sought completion of Alton Parkway. “The city has placed a very aggressive public benefits package as part of the plan,” said Shea Properties’ Spindler. “When you put all of those things together, it’s a very expensive package. One of the things we’re wrestling with is how you finance all of that.” Public input thus far has been mostly positive, although some residents have expressed concerns about traffic congestion, increased runoff and the impact on schools. Kuta said that the school issues “really are not part of this project,” although Spindler and representatives of the Irvine Ranch Water District, which owns 82 acres it seeks to develop, understand that cutting a deal with the Saddleback Valley Unified School District is expected. The city has a detailed traffic mitigation plan that should solve any potential congestion, Kuta said. Spindler agreed, noting that infrastructure in the area was planned to serve industrial development, which generates more traffic than homes. A city study estimated that the proposed development would generate about 47% as much traffic as the earlier planned industrial development, although peak commute traffic levels would be about the same. Noting the planned completion of Alton Parkway through the Baker Ranch property, Spindler said, “I think traffic in Lake Forest will be better than it has been in years.” The city also expects to benefit from a wide variety of new housing units. Shea, whose 380 acres is the largest piece in the opportunities study area, has been allocated 2,815 units under the proposed plan. Spindler said those units would come in the form of a wide variety of attached and detached units, apartments and even some mixed-use buildings. This will be a large community, and Shea wants to appeal to a broad range of the market, he said. The Irvine Ranch Water District is working with development giant Lewis on plans for the district’s land, which it inherited when it consolidated with another district several years ago. The city’s plan allocates 833 residential units to the water district’s property. Development of the property will provide money for the district’s replacement fund, which pays for wastewater and water lines, said Terry Loomis, the district’s treasurer. “We’re happy with the process,” Loomis said. “The city has tried to be careful as it has gone through it. It’s a difficult process, especially when you’re dealing with six landowners.” Spindler characterized the process as “long,” and expressed a bit of frustration because the housing market has tempered greatly since late 2005. The environmental impact report for the opportunities study is scheduled to go to the Lake Forest Planning Commission this month. The City Council should begin considering the entire package — general plan amendment, zoning change, traffic mitigation ordinance, development agreement and EIR — in August or September. Once all of those items are adopted, the city expects the larger landowners to return with more detailed plans, including tract maps, which will likely require subsequent environmental review, Kuta said. Actual development in the opportunities study area could commence as early as next year. Contacts: Cheryl Kuta, City of Lake Forest, (949) 461-3479. Terry Loomis, Irvine Ranch Water District, (949) 453-5340. Gene Spindler, Shea Properties, (949) 389-7116. Opportunities study website: www.ci.lake-forest.ca.us/opportunitiesstudy/

A state appellate court has upheld an exemption from environmental review for a 14-story residential building proposed in San Diego. The court ruled that the city correctly applied an urban infill exemption contained in the 1998 update to the California Environmental Quality Act Guidelines. The case provides the first published interpretation of the urban infill exemption in CEQA Guidelines § 15332 for projects that meet five criteria. The court rejected project opponents’ contention that unusual circumstances should have prevented application of the CEQA exemption. The project that spurred the lawsuit is a 14-story, 14-unit residential tower proposed for a 10,000-square-foot vacant lot at Sixth Avenue and Upas Street, across the street from the northwestern corner of Balboa Park. Developers Mi Arbolito, LLC, and 1700 Investors, LLC, and architect Martinez + Cutri proposed the project in early 2003. Later that year, the city issued a shoring and grading permit, and soon thereafter approved a building permit for pad footings and an underground parking garage. The Banker’s Hill, Hillcrest, Park West Community Preservation Group sued the city, arguing that the city had violated CEQA by not conducting environmental review. After the lawsuit was filed, the Development Services Department issued a notice of exemption from environmental review because the project required only ministerial approval and because it qualified for the urban infill exemption. The preservation group appealed to the City Council, which upheld the exception based solely on the project’s urban infill aspects. The opponents then amended their lawsuit, arguing that the project was not eligible for the urban infill exemption and that the city had impermissibly piecemealed review of the project by approving some permits before making an environmental determination. San Diego County Superior Court Judge Ronald Prager ruled for the city, and a three-judge panel of the Fourth District, Division One, upheld the lower court. The Fourth District dealt at length with the standard that should have governed the city’s decision, and the court’s review of that decision. The court ended up with a split: It decided the city’s determination regarding the urban infill exemption was governed by the substantial evidence standard, which favored the city because the existence of conflicting evidence would not necessarily matter. But the court decided that the question of whether unusual circumstances called for an exception to the exemption was guided by the fair argument standard, which favored the opponents because conflicting evidence could be enough to force additional review. After deciding the standards, the court considered whether the project qualified for the urban infill exemption. The exemption is available to projects that are consistent with general plan and zoning designations, are on sites of 5 acres or less that are “substantially surrounded by urban uses,” are on sites containing no rare species habitat, “would not result in any significant effects relating to traffic, noise, air quality or water quality,” and can be adequately served by utilities and public services. The preservation group argued that the San Diego project did not qualify because it was not surrounded by urban uses, was inconsistent with the general plan and would impact traffic. The court rejected all of the arguments, including the contention that Balboa Park was not an “urban use.” “Balboa Park,” Justice Joan Irion wrote for the court, “is a quintessential urban park, heavily landscaped, surrounded by a densely populated area, and containing urban amenities such as museums, theaters and restaurants.” As for general plan and zoning consistency, the opponents said the project’s setbacks were substandard and the project would block views of the park protected by a 1989 community plan. The court, however, found that the project would have greater setbacks than required by the zoning, and site lines from the street to the park would not change much. Traffic was a trickier question, partly because the adjacent intersection is offset. Opponents said the project would make the offset intersection more hazardous. But the court concluded, “ lthough the testimony of the local residents arguably provides some evidence of the dangerous nature of the intersection, the record contains no factual foundation for the claim that the project would that condition for pedestrians and drivers.” The court also ruled that the loss of three on-street parking spaces for an alley to serve the project “cannot be described as ‘significant.’” The court then turned to the question of whether “unusual circumstances” would provide an exception to the CEQA exemption. Here, the opponents needed only to present a fair argument. They contended that the project’s proximity to Balboa Park, historic houses, an existing condominium tower and an offset intersection created unusual circumstances. The court rejected the arguments because the preservation group did not provide enough evidence to pass even the fair argument standard. The court noted that community character and view impacts had already been established by a condominium tower next door to the project site. As for piecemealing, the court declined to consider the preservation group’s arguments because the group had not presented them to the city and, thus, failed to exhaust administrative remedies. The Case: , No. D046360, 06 C.D.O.S. 3823, 2006 DJDAR 5657. Filed May 8, 2006. The Lawyers: For the preservation group: Kevin K. Johnson, Johnson & Hanson, (619) 696-6211. For the city: Joe Cordileone, city attorney’s office, (619) 533-5854. For the developers: Monty McIntyre, Seltzer, Caplan, McMahon & Vitek, (619) 685-3003.

An important case involving the delivery of water to farmers and fish appears to have sputtered to an end with the Ninth U.S. Circuit Court of Appeals’ short-order rejection of the farmers’ claims. Two San Joaquin Valley farmers and two water agencies sued the Bureau of Reclamation over the bureau’s plan for operating New Melones Reservoir. Under that plan, the bureau releases water for fishery habitat purposes during the spring and fall. The farmers argued that the plan violated the 1992 Central Valley Project Improvement Act (CVPIA) because a study had forecast that the New Melones releases for fish would cause the bureau to violate a state salinity standard for water pumped from the Delta to the San Joaquin Valley. The farmers claimed they were due damages for future harm to their crops. In a 2002 decision that concerned environmentalists, the Ninth Circuit ruled that the farmers and water agencies had legal standing to pursue their claims in court ( , 306 F.3d 938 ( ); see , January 2003). The Ninth Circuit returned the case to District Court, where Judge Oliver Wanger rejected the claims. On appeal, a different three-judge panel upheld the lower court because the Bureau had not violated the CVPIA since 1994, and because the farmers and water agencies had not shown that future violations were more than hypothetical. “As an initial matter, the Delta parties argue that they need not show an actual violation of the CVPIA because our prior decision in is the ‘law of the case,’” Judge Stephen Trott wrote. “There is no such law of the case, however, because our decision on standing does not obviate the need to address the merits of the litigation. … The Delta parties cannot stand on our prior decision to avoid the need to demonstrate an imminent statutory violation.” The Case: , No. 04-16632, 06 C.D.O.S. 4191, 2006 DJDAR 6160. Filed May 22, 2006. The Lawyers: For Central Delta Water Agency: Daniel McDaniel, Nomellini, Grilli & McDaniel, (209) 465-5883. For the bureau: David Shilton, Department of Justice, (202) 514-2000.

An extraordinarily complicated takings case stemming from the City of Capitola’s mobile home rent control ordinance has received new life, even though the city has won numerous rounds in federal and state court. In the most recent decision, the Sixth District Court of Appeal ruled that the mobile home park owner who is fighting the city should have the opportunity to amend a lawsuit because the trial court judge applied an incorrect test for determining if an unconstitutional taking had occurred. The problem, the Sixth District ruled, “is the reliance by the parties and the court on the concept that the ordinance either did or did not ‘substantially advance a legitimate government interest.’ The United States Supreme Court has held that the ‘substantially advances’ formula is not a valid method of identifying regulatory takings for which the Fifth Amendment requires compensation.” The Sixth District cited the Supreme Court decision in , 544 U.S. 528 (2005), which reversed a 25-year-old precedent from , 447 U.S. 225 (1980). The court held that a government regulation that does not substantially advance legitimate state interests could amount to a regulatory taking. But in , the court ruled that such a regulation posed a due process question, not a takings question (see , July 2005). The decision was widely seen as a victory for cities with rent control, because property owners had started successfully using the “substantially advances” test to challenge rent control ordinances. But in the Capitola case, the decision — which was issued after the trial court had ruled — appears to have worked against the city. “The error of applying a due process test in determining a takings claim requires reversal,” Justice Eugene Premo wrote for the Sixth District. “Furthermore, since the error permeates the case from pleadings to final determination, and because park owner was not allowed to amend its as-applied takings, equal protection and due process claims when they were ripe, park owner should be allowed to amend its complaint.” The case involves a long-simmering conflict and a great deal of ill feeling. In 1987, Los Altos El Granada Investors purchased Castle Mobile Estates, a 108-space mobile home park in Capitola a short distance from the Santa Cruz beach. The park is governed by the city’s rent control ordinance first adopted in 1979. Almost immediately, the new park owner began pressuring tenants to sign long-term leases that remove the tenants’ spaces from rent control protections. At least as early as 1994, the park owner began both demanding large rent increases and offering to sell the park to residents for millions more than the $1.7 million the owners paid in 1987. The park owner apparently got few leases and no interest in a park sale to tenants, so the owner began trying to close the park once space at a time. Litigation eventually halted that scheme, but residents claim the intimidation has continued. In March 2000, the park owner filed with the city a request for a $300 a month rent increase — equal to a rise of about 150%. Several months later, the owner renewed an offer to sell the park to the tenants for somewhere between $6 million and $10 million. After extensive bickering over methodologies and experts’ abilities, the city in April 2001 approved a rent increase of $5.68 on top of a small inflationary increase, plus $9.69 per month for the city’s expert witness costs. The property owner eventually filed four lawsuits in federal court alleging that the city had taken property without just compensation. The city successfully defended three suits, but one case ( , U.S. District Court No. C-03-3859-JF) remains pending after the district court determined that the park owner’s takings claims were ripe for adjudication. However, the case is on hold pending the outcome of the state court litigation. The park owner’s state court lawsuit, filed in 2002, did not get far at the trial court level. The court found that the property owner’s claims were facial challenges to the ordinance itself, and, because the ordinance has been around for years, the claims were barred by the statute of limitations. The court also determined that prior federal court rulings on the same claims prohibited the state court from considering the claims. Finally, the court determined that the city’s approval of the April 2001 rent increase was supported by substantial evidence. On appeal, the park owner continued to press its takings claims. The Sixth District upheld portions of Santa Cruz County Superior Court Judge Robert Atack’s decision, including his ruling regarding the base year from which the city should calculate rent increases — a victory for the city. The Sixth District also upheld Judge Atack’s refusal to grant the park owner an “ reservation,” in which the park owner attempted to notify the court that it would pursue only its state law claims in state court while reserving federal claims for federal court. (Federal courts have declined to consider takings claims adjudicated by state courts.) The Sixth District found that an reservation was not applicable here. Still, the heart of the Sixth District decision was the reversal based on the lower court’s incorrect application of the “substantially advances” test. The litigation now heads back to Superior Court for further proceedings. The Case: , No. H027860, 06 C.D.O.S. 4062, 2006 DJDAR 5902. Filed May 17, 2006. Modified June 16, 2006, at 2006 DJDAR 7614. The Lawyers: For Los Altos El Granada Investors: Robert Coldren, Hart, King & Coldren, (714) 432-8700. For the city: John Barisone Jr., Atchison, Barisone, Condotti & Kovacevich, (831) 423-8383.

After suffering two generations worth of economic decline and malaise, the East Bay city of Pittsburg is trying to reinvent its downtown as a residential, office and retail district. Although the city has been working at redevelopment since the late 1970s with mixed results at best, the downtown project appears to be taking off. Developers A.F. Evans and the Olson Company are building mixed-use projects, while the city’s redevelopment agency is investing more than $50 million in infrastructure improvements and real estate development. The agency also has begun implementing a master plan for the marina, a plan that intends to connect downtown to the Delta waterfront via a wide pedestrian promenade. Few cities in the Bay Area are in more obvious need of revitalization than Pittsburg, a city of 63,000 people on Highway 4, just over the hills from the wealthier Contra Costa County cities of Walnut Creek, Concord and Pleasant Hill. However, for the better part of a century, Pittsburg was the economic hub. The city grew up around the railroad line that connected the Black Diamond coal mine on Mount Diablo to Pittsburg’s docks, where the coal was loaded onto barges. Later, the fishing industry rose to prominence. From 1942 to 1954, Pittsburg was the home to Camp Stoneman, the principal jumping off point and welcoming home center for U.S. Army soldiers headed to and from World War II’s Pacific Theater and the Korean War. But by the mid-1950s, the coal, the fishermen and the soldiers were gone from Pittsburg. Ever since, the city’s primary regional role has been to provide affordable housing for the East Bay’s blue collar workers and commuters. In the last couple of years, though, city officials have adopted new plans for downtown (or “Old Town” as it has become known) and signed agreements with downtown-savvy developers. Construction is under way on numerous projects at once, with more to come. Although there is no single keystone project, the largest so far is Vidrio, also known as the Black Diamond project — a five-story mixed use development along Railroad Avenue, downtown’s main drag. The project is planned to contain 196 condominiums above nearly 40,000 square feet of ground floor retail space, plus two public plazas, according to a city newsletter. The Pittsburg Redevelopment Agency is providing a $4 million subsidy to ensure that 30 of the units are available to moderate-income buyers. A.F. Evans began work on the project in June. The first block of the three-block project is scheduled for completion during 2007, with full completion likely to take three years. "It's three contiguous blocks in a downtown that has incredible water access," Muhammad Nadhiri, A.F. Evans project manager, said of the site. "It's a fairly central location for East Contra Costa County. It's just an area that is screaming for people to come to it." To make room for Vidrio, the city had to take via eminent domain the landmark Scampini building, a boxy white structure that many people in town considered an historic landmark. City officials, however, shed few tears. “For as long as I’ve been here, I’ve heard we need to revive downtown,” then-Councilman and now-Mayor Michael Kee told the . “I would like to see us save the building, but I think it needs to be sacrificed to create the image and memories of what people remember as a vibrant downtown.” The city owns much of the land on which Vidrio is rising, and officials chose A.F. Evans to develop the site over Hometown Group and Olson. The city picked A.F. Evans partly because the Oakland-based company proposed the most parking spaces. Although some people questioned the wisdom of providing more than 2 parking spaces per residential unit in a supposedly walkable district, parking is major a public concern and city officials ended up requiring more parking yet. Still, the environmentalists at Greenbelt Alliance endorsed the project “because it will revitalize Pittsburg’s downtown and create new homes without building on farmland and hillsides outside the city.” The project that Olson is working on is called Mariner Walk, a 123-unit, single-family home development that also includes a public park. That project, in which the redevelopment agency is investing $1 million, is expected to be complete in about a year. At the entrance to downtown on Railroad Avenue is the Gateway project by Domus Development. Gateway is planned to have 28 apartments for low- to moderate-income renters, offices for the city and about 4,000 square feet of space for retail shops or a restaurant. The redevelopment agency is investing $8 million in the Gateway project. Gateway is under construction right across the street from the location of what would be downtown’s first elementary school since the 1960s. The new Pittsburg Unified School District campus is planned for the site of a closed school and other parcels that the redevelopment agency has helped assemble. The redevelopment agency intends to put several million into the school project so that the general public may have access to the school’s parking. Construction also is under way on $15 million in improvements to the marina area, including dredging, a 25-foot-wide promenade reaching to downtown, new docks and more parking. Plans also call for the marina to offer a restaurant and an eight-unit bed-and-breakfast inn, with the redevelopment agency again providing funding. Elsewhere in downtown, the redevelopment agency is investing upwards of $20 million on more mundane items, such as new utility lines, storm drainage and sidewalks. The city is able to put so much capital into downtown because its redevelopment agency is among the richest in the Bay Area. More than half of the city lies within the city’s Los Medanos project area, which generated $35 million of tax increment for the city during the 2004-05 fiscal year, according to the state controller’s office. There is more downtown development on the way. Between Vidrio and the marina lies the site of the proposed New Mecca Square, where local developer Albert Seeno III has proposed 40 townhouses above retail spaces. Several blocks east lie 20 acres of former industrial property that has been rezoned for as many as 400 housing units. Cleanup of toxic materials is necessary before development occurs there. And in a true sign of revitalization, Mechanics Bank is expected to open a downtown branch shortly, providing the district’s first full-service bank since the 1980s.

The presence of ammonium perchlorate—an ingredient used in rocket fuel, military munitions and other applications—in underground aquifers is contaminating drinking water supplies in several high-growth areas around the state. Water providers in the Santa Clarita Valley, the Inland Empire, the Santa Clara Valley, Rancho Cordova and elsewhere are faced with closing wells, charging customers for treatment, and blending their supplies. Some cities could soon face limitations on additional development or be forced to consider charging developers for the additional cost burden. Ongoing litigation, prolonged negotiations, and regulatory uncertainty over legal limits of perchlorate allowed in drinking water complicate things further. Although perchlorate is not widely believed to be cancerous at concentrations found in California’s drinking water, contaminated water can result in hypothyroidism in adults and developmental deficiencies in unborn babies. Decades of unregulated disposal by the military and defense contractors prior to the creation of laws governing the handling of the hazardous material is primarily to blame. In 1997, technological advances enabled widespread testing that revealed hundreds of contaminated wells in California and throughout the West. By 2000, many dischargers had been identified and either engaged in settlement agreements or litigation aimed at recovering costs for cleanup and treatment. Many cases remain unresolved. In March 2004, the California Environmental Protection Agency set a public health goal (PHG) of 6 parts per billion (ppb), a level at which perchlorate in drinking water is not believed to cause harm. The PHG is merely a regulatory guideline, however, and is not strictly enforceable. The California State Department of Health Services is working on setting maximum contaminant levels (MCLs) for perchlorate in drinking water — the level at which water retailers could be found liable for delivering a harmful product. The MCL is not required to be the same as the PHG. The Federal Environmental Protection Agency has also set standards for perchlorate contamination, but they are more lenient. In the Santa Clarita Valley, six wells have been closed—one permanently—as a result of perchlorate contamination. Local water suppliers and the valley's largest polluter, Whittaker-Bermite, along with current property holders, have been embroiled in litigation since 2000. According to Fred Fudacz, legal counsel for Castaic Lake Water Agency (CLWA), the local water wholesaler and the lead plaintiff in the suit, a good portion of the roughly $80 million needed for long-term cleanup—perhaps $44 million—is available, but no money has changed hands yet. In the meantime, conservation groups including Santa Clarita Organization for Planning the Environment (SCOPE) and the Sierra Club have challenged two recent development proposals, one for an industrial park, the other for 1,089 residential units. Environmentalists argue the developments count on water that CLWA hasn't demonstrated it can provide. The environmental impact reports (EIRs) for these projects, known respectively as the Gate-King Industrial Park and Riverpark, rely on CLWA's assertion that contaminated well water is readily available because a settlement for perchlorate pollution is virtually in hand. They also rely on a transfer of 41,000 acre-feet per year transfer from the State Water Project. Yet, the decision in , 133 Cal.App.4th 1219 ( , December 2005) cast doubt over the use of the contaminated water, and EIRs for the water transfer have not been certified. Without these sources on the books, the region is short the water necessary to approve the projects, said Lynne Plambeck, SCOPE president. The city has not a final decision on either Gate-King or Riverpark. The rapidly growing Inland Empire cities of Rialto, Colton, and Fontana, whose water is now heavily contaminated by perchlorate discharge from a former World War II munitions base in northern Rialto, are also without a solution. The City of Rialto has filed a suit targeting 42 parties, including the Defense Department, military contractors and fireworks operations, seeking hundreds of millions of dollars for treatment and cleanup for a site that presents a problem for local water providers. Roughly 40% of Rialto's wells are contaminated, said Bill Hunt, the interim director of the city's public works department. “We don't receive any state water,” said Hunt, “and about 95% of our municipal water supply comes from groundwater.” Two of Rialto's seven contaminated wells are now being treated, with another coming on line soon, he said. But without any real compensation, the city — whose City Council has adopted a zero-tolerance policy on perchlorate — has been forced to pass the cost along to its customers for now. Some communities have considered blending water from contaminated wells with clean water from other wells, said Kurt Berchtold, assistant executive officer of the Santa Ana Regional Water Quality Control Board. But with MCL levels hanging in the balance, it’s hard for a provider to know how to approach this, he said. An MCL of 8 to 10 ppb would allow most water providers to blend quite easily, said Berchtold, while an MCL of 2 to 4 ppb might force a reliance on treatment. The Santa Ana board has issued a cleanup order to Black & Decker and forced negotiations with Goodrich, both defense contractors who once occupied Rialto’s World War II site. Some federal and state appropriations have been provided, said Berchtold, but the money has arrived in a slow trickle. One of the biggest questions facing retailers is how to cover treatment cost. A city like Rialto could pass the costs along to developers provided that it is a developer’s project that necessitates the cleanup, said Fred Curry, chief of the California Public Utilities Commission's (PUC’s) Water Board, “It’s often argued that cost-causers should pay the cost,” said Curry. Hunt, however, said this is not an option that Rialto has seriously considered because much of the city’s growth is to the north, a portion of the city supplied by other retailers. Passing the cost on to the developers is not an option that the Fontana Water Company — which supplies Fontana and portions of north Rialto — is likely to embrace, said General Manager Mike McGraw. “Hopefully, we wouldn't get to that point,” said McGraw, “but if we did, we'd probably opt to spend some of our own money on treatment, or pursue a rate increase spread amongst all water users.” “Putting this all on private developers may not sit well with the community and the PUC may not look favorably upon it either,” said McGraw, adding that Fontana would do what it could to clean up the water supply and avoid holding up regional economic development. Contacts: Kurt Berchtold, Santa Ana Regional Water Quality Control Board, (951) 782-4130. Fred Curry, California Public Utilities Commission, (415) 703-1739. Fred Fudacz, Nossaman, Guthner, Knox & Elliott, (213) 612-7823. Bill Hunt, City of Rialto, (909) 820-2608. Mike McGraw, Fontana Water Company, (909) 822 2201. Lynne Plambeck, Santa Clarita Organization for Planning The Environment (661) 255-6899.

A city is not required to provide credit against park and recreation fees when it requires a developer to dedicate private open space, the Sixth District Court of Appeal has ruled. In an opinion interpreting the Quimby Act, the unanimous three-judge appellate panel reversed a lower court’s decision ordering the City of Santa Cruz to provide credit for the dedication of private open space in a small subdivision. “ ocal legislatures retain the flexibility to implement a private open space credit as they determine reasonable under local conditions,” the Sixth District ruled. In 1999, Branciforte Heights, LLC, applied for a conceptual planned development permit to demolish four houses on Branciforte Avenue and replace them with 10 new single-family units. The City Council approved the application but cut the number of new houses to nine. The council also required that the subdivision be reconfigured so that there would be a common area in the front yards that would be maintained by the homeowners association. One year later, the council approved a tentative map, design permit and demolition authorization. Approval again came with the condition of a common area. In July 2003, the council approved the final map. Shortly thereafter, Branciforte Heights notified the city that the developer would not be paying park and recreation in lieu fees because it was dedicating usable open space for parks and recreation to serve the subdivision. The city insisted that the usual fee still applied. Under the city’s municipal code, a planned development permit allows a developer to deviate from the underlying zoning if the project provides more amenities than usual. In this case, Branciforte was able to build at least two additional houses, but one of the required amenities was the common open space. As it began pulling building permits in December 2003, the builder paid the fees, eventually paying a total of $39,966. The developer then sued the city, demanding $118,000 in credit for the 4,000 square feet of open space and improvements. Last year, Santa Cruz County Superior Court Judge Robert Yonts ordered the city to “to allow a credit against the park fees for the value, at the time the fee was imposed, of that portion of the private open space in the development that is suitable for active recreational use.” The city appealed, and the Sixth District ruled that Judge Yonts read the statute incorrectly. At issue was an interpretation of the Quimby Act (Government Code § 66477). Subdivision (e) of § 66477 says that common interest developments “shall be eligible to receive a credit, as determined by the legislative body, against the amount of land required to be dedicated, or the amount of the fee imposed, pursuant to this section, for the value of private open space within the development which is usable for active recreational uses.” The developer argued this language commanded the city to provide a credit. The city contended the phrase “as determined by the legislative body” gave the city an option. Citing extensively from the legislative history, the court sided with the city. The language in question was inserted into the Quimby Act in 1982 at the same time that the state Legislature mandated that a developer’s dedication of public park and recreational improvements “shall be a credit” against park and recreation fees. The Legislature did not go that far with regard to the dedication of private open space. “ he Legislature did not go so far as to dictate the precise parameters of any private open space credit or to define the meaning of ‘usable for active recreational uses.’ Instead it left it up to local legislative bodies to determine the exact criteria and procedures for granting a credit,” Presiding Justice Franklin Elia wrote for the court. Santa Cruz has no ordinance that provides for a credit for private open space, the court noted. Without such an ordinance, the city has no duty to provide Branciforte Heights with a specific amount of credit, and the developer has no right to a credit, the court concluded. The Case: , No. H028864, 06 C.D.O.S. 3217. Filed April 19, 2006. The Lawyers: For Branciforte Heights: John Barisone, Atchison, Barisone, Condotti & Kovacevich, (831) 423-8383. For the city: Edward Chun, Bosso Williams, (831) 426-8484.

A billboard company has won the latest round in a drawn-out conflict with the City of Riverside. The Ninth U.S. Circuit Court of Appeals has ruled that Valley Outdoor Inc. may challenge the city’s handling of a permit application but may not contest the city’s sign ordinance. With its ruling, the Ninth Circuit sent the case back to federal district court for additional proceedings. In January 2000, Valley Outdoor began pouring foundations for five billboards next to the 91 Freeway in Riverside without permits. Two days after pouring foundations, Valley Outdoor sued the city, arguing that the city’s sign ordinance violated the company’s First Amendment rights. A few days after that, a state appellate court in an unpublished opinion struck down sections of the city’s ordinance, specifically a ban on billboards located within 750 feet of a freeway and a content-based exception to that ban ( , No. E022351). Valley Outdoor President J. Keith Stephens then attempted to file a permit application, but he was told the city still would not permit billboards within 750 feet of a freeway and he was turned away. In late February 2000, after the company had completed construction of all five billboards, Valley Outdoor again tried to apply for a permit. This time the city accepted the application. While it was pending, the city adopted a revised ordinance that restored the 750-foot freeway exclusion zone and prohibited offsite signage. In a letter dated one day before the effective date of the new ordinance, the city notified the billboard company that the city was rejecting the permit application because Valley Outdoor had not precisely identified the color and materials used for the sign uprights, and because the company failed to provide specific street addresses for two sign locations. Shortly thereafter, the city ordered Valley Outdoor to remove the billboards. Valley Outdoor amended its lawsuit, and in 2002 the district court ruled that the five billboards were governed only by those sections of the original sign ordinance left standing after the decision. In 2003, District Court Judge Dickran Tevrizian ruled that because Valley Outdoor had violated the city’s permit provisions by starting construction without applying for a permit, the company had no standing to challenge the billboard ordinance. Judge Tevrizian then granted the city’s motion for judgment as a matter of law. On appeal, the Ninth Circuit dealt only with the issue of whether Valley Outdoor has standing to bring the lawsuit. The court ruled that the company could not challenge the city’s regulations themselves. The original billboard ordinance “is irrelevant because its substantive restrictions were invalidated by ,” Judge Diarmuid O’Scannlain wrote for the court. And the amended ordinance does not apply because Valley Outdoor installed its billboards before the law’s effective date. However, the Ninth Circuit ruled that the billboard company could contest its treatment by the city. The court noted “that the city’s billboard ordinance contains a detailed procedure by which the city will process an application filed after the beginning of construction, i.e. a ‘latefiled’ permit application.” “Valley’s commencing construction before applying for the required permits does not constitute disqualifying ‘selfhelp,’ as the district court concluded, but actually gives rise to this very case or controversy,” O’Scannlain wrote. “Thus the district court erred in ruling that Valley lacked standing to assert constitutional claims related to the city’s conduct in refusing to process the latefiled permit applications.” The Ninth Circuit further ruled that the district court should have considered evidence regarding the city’s actions. “A jury could find that any differential treatment of Valley’s latefiled application may have been irrational and wholly arbitrary, in violation of equal protection principles,” the Ninth Circuit ruled. In a concurring opinion, Federal Circuit Court Senior Judge Daniel Friedman, sitting by designation, wrote that he disagreed with “some of the court’s statements” but that he agreed with the result. “I hope that evidence would be developed addressing these items: (1) Valley’s reasons, if any, for not seeking a permit before beginning construction of the billboards (other than its claim that such application would have been futile); and (2) the city’s reasons for apparently not considering the merits of Valley’s retroactive request for a permit or for denying that request (other than the city’s apparent position that it has absolute discretion to grant or deny a permit without stating a reason),” Friedman wrote. The Case: , No. 04-55029, 06 C.D.O.S. 3485, 2006 DJDAR 5036. Filed April 27, 2006. The Lawyers: For Valley Outdoor: Eliot Disner, Van Etten, Suzumoto & Becket, (310) 315-8200. For the city: Timothy Coates, Greines, Martin, Stein & Richland, (310) 859-7811.