The California Supreme Court has accepted yet another California Environmental Quality Act (CEQA) case for review, this one involving the question of whether denial of a conditional use permit extension is subject to CEQA. In an unrelated matter, the court has dismissed a Proposition 218 case regarding assessments for a business improvement district. The CEQA case concerns Sacramento County's denial of a conditional use permit renewal for a general aviation airport near Elk Grove. The county has battled for years with the owner of Sunset Skyranch Airport over permits. Four years ago, the Board of Supervisors decided not to renew the conditional use permit because of the airport's proximity to new homes and a proposed school. The county ordered the airport to close within 180 days. A group of local pilots sued, arguing that the county could not deny the permit renewal without conducting an environmental study. They argued – and the Third District Court of Appeal agreed – that closure had implications for the Sunset Skyranch facilities, other airports and the pilots that had to be studied under CEQA (see CP&DR Legal Digest , September 2008 ). The county appealed to the state Supreme Court, and six of seven justices voted to accept the case. The questions for the court are these: Is denial of an application to renew a conditional use permit a "project" under CEQA? If the denial is a project, is it exempt from CEQA nonetheless? The case is Sunset Skyranch Pilots Association v. County of Sacramento , No. S165861. During the last few years, the state high court has shown more interest in CEQA than at anytime since the 1970s. Earlier this year, the court upheld the environmental impact report for the Cal-Fed Bay-Delta project, and it upheld the Department of Forestry's analysis of three timber harvest plans in Tuolumne County. In cases decided last year, the court rejected a program EIR for a proposed 20,000-unit housing development in Rancho Cordova because of an inadequate water analysis, and the court exempted from CEQA Solano County's adoption of an airport land use compatibility plan because it only incorporated existing general plan and zoning policies. In September, the court heard oral arguments in Save Tara v. City of West Hollywood , No. S151402 (see CP&DR Legal Digest , April 2007 ). The case concerns exactly when in the development process CEQA is triggered. The Second District Court of Appeal ruled that the city's approval of a conditional agreement with the developer of a proposed housing project should have been subject to environmental review because it committed the city to a definite course of action. The city contends environmental review so early in the process would be premature and possibly lead to repetitive review once the project is fully known. During oral argument, justices asked about the possibility of establishing a "bright line" test to determine when CEQA is triggered. An opinion is due by December 1. Other pending CEQA cases at the state Supreme Court: Communities for a Better Environment v. South Coast Air Quality Management District , No. S161190, which concerns the baseline for an EIR; Citizens for Sensible Planning v. City of Stockton , No. S159690, which involves the statute of limitations for filing a CEQA suit when a project is not properly approved; and Committee for Green Foothills v. Board of Supervisors , No. S163680, which concerns the statute of limitations for a suit when an agency declares a project could not have a significant impact. None of those three cases has been set for oral argument yet. Away from CEQA, the court transferred Dahms v. Downtown Pomona Property and Business Improvement District , No. S143165, back to the Second District Court of Appeal, Division One. The case involves formation of, and assessments for, a business improvement district. In 2006, the Second District rejected a business owner's argument that a required public hearing was conducted at the wrong time and that the assessments are not proportional to the benefits received. The Supreme Court directed the Second District to reconsider its decision in light of the recent decision in Silicon Valley Taxpayer's Assn., Inc. v. Santa Clara County Open Space Authority , 44 Cal. 431. In that case, the court threw out an open space assessment because it was a special tax that should have gone before voters. The district violated Proposition 218 by subjecting the assessments to a vote of only landowners, the court ruled (see CP&DR Legal Digest , August 2008 ).

The San Diego City Council approved a giant infill project on the site of a gravel quarry in Mission Valley during late October. The Quarry Falls project proposes 4,780 housing units in a variety of configurations, about 600,000 square feet of retail space, about 600,000 square feet of offices, 70 acres of parks and open space, and a school on the 230-acre site near the junction of Interstates 8 and 805. The developer, Sudberry Properties, presented the project as an ideal fit within San Diego's "City of Villages" concept because of a pedestrian-friendly design, the inclusion of live-work units and housing above storefronts, close proximity to the trolley and extensive public open space. The only vote against the project came from Councilwoman Donna Frye, who represents Mission Valley. She voiced concerns about traffic the project would generate in the already congested area. A group called San Diegans for Responsible Planning, organized by rival developer H.G. Fenton, has raised similar complaints in opposing the project. But Sudberry representatives said the company will provide improvements to five freeway interchanges as part of the development. Meanwhile, about 110 miles north in Carson, developers of an $850 million project on a closed garbage dump conducted a formal groundbreaking ceremony on October 14. LNR Property and Hopkins Real Estate Group actually began remedial work on the site in April, but the ceremony offered Carson city officials the chance to celebrate the unusually large infill project. Since the Cal Compact landfill closed in 1965, numerous developers and speculators have made a run at developing the 168-acre site along the 405 freeway. In the 1980s, the city approved a 2-million-square-foot shopping mall. It went nowhere. More recently, the National Football League eyed the land for a stadium. City officials, however, chose to work with LNR and Hopkins, ultimately approving a project of 1,300 apartments and condominiums, 1 million square feet of retail space and a 300-room hotel. Originally called Avalon at South Bay, the project is now known as The Boulevards at South Bay and a 2011 opening is planned.

It seems that the government always has the advantage in its ongoing legal battle with property rights advocates. But recently, property owners scored two big wins – although a government agency was responsible for one of the property owners' victories. In one case, a state court ruled that property owners in Rancho Palos Verdes who have been prevented from building for three decades because of the city's concern about landslides are due compensation for the loss of their property rights. In the other case, a federal court ruled that a Board of Reclamation mandate requiring a Ventura County water district to provide water for an endangered fish was a physical taking of the district's property . (A third case went the other when a Sierra Madre developer may have swung for the fence before the ball left the pitcher's hand.) The Rancho Palos Verdes and Casitas Municipal Water District cases appear to be landmark cases that give hope to property owners who have long chafed under government regulation. The decisions also greatly worry the regulators, who are charged with protecting the public good. Although the cases are unrelated, the decisions were handed down only days apart and they appear to mark a moment in time – a moment when the scales begin to tip in a different direction. The U.S. Supreme Court typically provides these moments every half dozen years or so. But these lower court decisions, should they stand, could prove to be every bit as important to property owners and government regulators as anything the high court has done in recent years. – Paul Shigley

In a decision with enormous potential ramifications for environmental regulation, a federal appellate court has ruled that a Bureau of Reclamation mandate requiring a Ventura County water district ensure adequate river flow for an endangered fish species was a physical appropriation of the water. The court ruled that the Casitas Municipal Water District's claims should be considered under the physical takings doctrine, not under the much narrower regulatory takings standard. The United States Court of Appeals for the Federal Circuit did not specifically rule that a compensable physical taking had occurred. Instead, the court sending that question back to the Court of Federal Claims for consideration. However, the appellate panel's 2-1 majority made clear what it thought. "By its own admission, the government required construction of a fish ladder and compelled the water to be rerouted to the fish ladder in order for the fish ladder to operate. This is no different than the government piping the water to a different location. It is no less a physical appropriation," Judge Kimberly Moore wrote for the majority. In a dissenting opinion, Judge Haldane Robert Mayer said that Casitas does not own the water in question because water sources in California belong to the public. Even if the agency does own the water, he wrote, the Bureau of Reclamation's restriction is "plainly regulatory in nature," and not physical. The ruling is somewhat similar to that in Tulare Lake Basin Water Storage District v. United States , 49 Fed. Cl. 313 (2001), in which the court ruled that appropriation of water for endangered species should be considered a physical taking (see CP&DR Environment Watch , March 2004 ). However, that ruling was roundly criticized at the time and was later disclaimed in light of the Supreme Court's decision in Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency , 535 U.S. 302 (2002), which clearly delineated the differences between a regulatory taking and a physical taking. Still, the Court of Appeals majority in the Casitas case declined to "opine on whether Tulare was rightly decided," and said, " Tahoe-Sierra did not depart from the substantial body of precedent dictating that the government's physical appropriation of a portion of a water right is compensable." The decision worries environmentalists and regulatory agencies, who fear the precedent could hamper the government's ability to reallocate natural resources for environmental purposes. In an advisory, Nossaman attorneys Alfred Smith III and Melissa Poole said the decision "could have dramatic repercussions, particularly in the western United States." Russ Baggerly, a Casitas board member who has opposed the lawsuit from the outset, told the Ventura County Star , "If it stands as good law, there isn't going to be enough money in the treasury to deal with all of the takings claims all across the country." The board has consistently split 3-2 on whether to continue the litigation. Property rights advocates, however, celebrated the decision. "The Federal Circuit reached the right decision in this case," said Nancie Marzulla, one of Casitas's attorneys. "The government's argument that it can take the municipal water district's water for any reason, without paying for the water it takes, is a breathtaking proposition." In 1956, Congress authorized the Ventura River Project, which comprises Casitas Dam, Lake Casitas, the Robles Diversion Dam and the Robles-Casitas Canal. Essentially, the dam creates a reservoir on Coyote Creek, and the canal diverts water from the Ventura River into the reservoir. After project completion in 1959, Casitas Municipal Water District took over operation of the project. A state license grants the district the right to divert up to 107,800 acre-feet of water per year from the Ventura River, and to deliver up to 28,500 acre-feet annually. In 1997, the National Marine Fisheries Service listed the West Coast steelhead trout as an endangered species. In 2003, after negotiations with the Casitas district, the Bureau of Reclamation (BOR) directed the district to construct a fish ladder at the intersection of the Ventura River, the diversion dam and the canal, and to divert adequate water for fish to reach historic spawning and rearing habitat that the water project had blocked. Casitas built the fish ladder under protest and then sued the federal government for breach of contract and an unconstitutional taking. Court of Federal Claims Judge John Wiese ruled for the federal government. The Court of Appeals for the Federal Circuit, based in Washington, D.C., unanimously upheld Wiese on the contract claims, but divided 2-1 on overturning Wiese's ruling that Casitas had presented a regulatory taking claim in which it could not prevail. The appellate panel majority built its decision on three Supreme Court cases: International Paper Co. v. United States , 282 U.S. 399 (1931), United States v. Gerlach Live Stock Co. , 339 U.S. 725 (1950), and Dugan v. Rank , 372 U.S. 609 (1963). International Paper concerned a World War I-era government directive that the Niagara Falls Power Company cut off water to an International Paper plant so that Niagara could boost hydroelectric power production. The Supreme Court determined that the government "directly appropriated what International Paper had a right to use," the appellate panel explained. Gerlach was filed by San Joaquin Valley farmers who claimed the BOR's construction of Friant Dam eliminated their access to overflow irrigation. "The Supreme Court analyzed the government's action as a physical taking," the appellate panel explained. Dugan also involved Friant and the rights of downstream water users. The Supreme Court concluded the government had physically taken the landowners' water rights. Federal government attorneys argued those three cases did not apply to the Casitas controversy because they all involved direct appropriation of water, not a restriction on the use of water. But the appellate panel majority said the situations are the same. " he government did not merely require some water to remain in stream, but instead actively caused the physical diversion of water away from the Robles-Casitas Canal – after the water had left the Ventura River and was in the Robles-Casitas Canal – and towards the fish ladder, thus reducing Casitas' water supply," Judge Moore wrote. "Similar to the petitioner in International Paper , Casitas' right was to use the water, and its water was withdrawn from the Robles-Casitas Canal and turned elsewhere (to the fish ladder) by the government." The court bluntly rejected the government's contention that a regulatory taking analysis should apply to what the government characterized as a restriction on use of a natural resource. " his case involves physical appropriation by the government," Moore responded. "The United States actively caused water to be physically diverted away from Casitas after the water had left the Ventura River and was in the Robles-Casitas Canal." The majority ruling sends the case back to the Court of Federal Claims for a determination of whether a taking occurred and what compensation, if any, Casitas is entitled to. In his dissent, Judge Mayer insisted that the lower court must also consider whether Casitas has a property interest in the water. Mayer made clear how he would rule: "California subjects appropriative water rights licenses to the public trust and reasonable use doctrines, so Casitas likely has no property interest in the water, and therefore no takings claim." Mayer continued, "The government is not appropriating or taking possession of Casitas' property, but rather is prohibiting Casitas from making private use of a certain amount of the river's natural flow under a public program to promote the common good. Labeling such an action as a physical taking blurs the line Tahoe-Sierra carefully draws between physical and regulatory takings." Still, the majority contrasted its holding with Tahoe-Sierra because the latter case "did not involve a claim of physical taking, nor did it involve water rights." The Case: Casitas Municipal Water District v. United States , No. 05-CV-168. Published September 25, 2008. The Lawyers: For Casitas: Roger Marzulla, (202) 822-6760. For the United States: Katherine Barton, Department of Justice, (202) 514-2000.

The City of Rancho Palos Verdes' 30-year moratorium on new home construction in an area the city says is prone to landslides is an unconstitutional taking of private property, the Second District Court of Appeal has ruled. The decision marks a rare takings victory for property owners in state court. The decision is also one of two potentially landmark takings rulings issued recently. In the other case, a federal appellate court ruled that the mandatory diversion of water to aid an endangered fish species is a physical appropriation of a water district's property. The Rancho Palos Verdes decision appears to be the first state appellate court ruling based primarily on the U.S. Supreme Court's 16-year-old Lucas decision, in which the high court held that a regulation that prohibits all economic use of a property is taking, except to the extent that principles of nuisance restrict the use ( Lucas v. South Carolina Coastal Council , 505 U.S. 1003). The Second District determined that Rancho Palos Verdes did not prove that building houses on the property in question would constitute a nuisance. The court also ruled that the property owners did not have to exhaust their administrative remedies – namely, file applications for exceptions to the moratorium – because the process would have been futile. Not surprisingly, views of the decision were mixed. The property owners' attorney, Stuart Miller, said the city's moratorium is a classic " Lucas taking." "We've got a city that is so extreme and unreasonable," contended Miller, who said there is no evidence his clients' land will slide. "It's an absolute ban on use, and there's no justification for it." J. David Breemer, a principal attorney with the pro-property rights Pacific Legal Foundation, which did not participate in the litigation, said the case could force cities to reconsider long-term building bans. "I think it vindicates the principle that we argue a lot – that towns and agencies can't rely on speculative concerns of harm as a pretext for a ban on building," Breemer said. "You've got to show that there would be some actual harm," But attorney Edwin Richards, who represents the city, called the ruling a bitter one for Rancho Palos Verdes and all municipalities, which may now face greater scrutiny when they restrict development because of potentially hazardous situations. "We just think that the decision puts this city, and cities in general, in a terrible catch-22 situation. They are being forced to allow development in a known landslide area with all of the hazards inherent in that," Richards said. City officials and current residents fear that additional development will exacerbate the landslide potential, Richards explained. "The lesson is a very distasteful one. Here, the city worked extremely hard to weigh the competing interests of these property owners and its citizens, and made a decision in the city's best interest," he said. "Then the court stepped in and said, ‘Nice try, but you have to pay market value for these properties.'" Dan Selmi, a professor at Loyola Law School, said the case is strikingly similar to Lucas . "It seems to fall into that pattern like Lucas – a relatively rare fact pattern where the city was unwilling to permit housing on safety grounds," Selmi said. Thus, the burden of proof was on the city and, he said, "The court thought there was something wrong with the city's evidence." Located on a peninsula that separates Santa Monica Bay from San Pedro Bay, Rancho Palos Verdes has a history of landslides. In 1957, an ancient landslide commonly known as the Portuguese Bend landslide began to move again. In 1974, a different area known as the Abalone Cove landslide began to shift. Both slides remain active, with annual movement typically measured in inches, but catastrophic slides are possible. In June 1999, the 18th hole at Ocean Trails Golf Course (now Trump National Golf Club) suddenly separated from the rest of the course by about 100 feet. The golf course is in the same area as the historic slides and about one mile south of the properties in question in the litigation. In 1978, the City Council adopted an urgency ordinance prohibiting development in the general vicinity of the slides. The city has updated the ordinance a number of times since, always allowing some exceptions, such as for repairs and renovations to existing structures. The city commissioned several studies over the years and in the mid-1990s divided the area into eight zones for purposes of remediation of residential development. The properties in question here lie in Zone 2, which covers 130 acres largely unaffected by the historic landslides. Zone 2 contains 111 lots, 47 of which are undeveloped. Much of the local controversy centers on the proper "factor of safety," a geotechnical term that describes the stability of a piece of land. A 1.0 factor of safety means that the forces of stability are equal to the forces of instability, and the property is not considered safe for building. A 1.5 factor of safety means that the forces of stability are 50% greater than the forces of instability. Geotechnical professionals consider a 1.5 factor to be the minimum for residential construction, although a lower rating may be appropriate when a great deal is known about an area's geology. In a 2002 report to the city, geologists with Cotton, Shires & Associates (CSA) said there was insufficient information to establish a factor of safety for Zone 2, but they also concluded that "development of the remaining parcels will not be of sufficient impact, in and of itself, to cause instability." In June 2002, the City Council approved the most recent moratorium resolution. It rejected the CSA conclusion that new homes could be built because the conclusion was not based on a factor of safety of at least 1.5. Under the resolution, the city would permit new home construction only if the applicant provided adequate geological data demonstrating a 1.5 factor of safety for all of Zone 2 – even though such a study would likely cost $500,000 to $1 million. The City Council adopted the resolution five months after the owners of 16 parcels in Zone 2 filed a joint application for exclusion from the moratorium. Instead of pursing the application, the property owners sued, arguing that the June 2002 resolution was a taking within the meaning of Article I, § 19 of the California constitution. A Los Angeles County Superior Court judge ruled for the city based on the administrative record. The property owners appealed, and the Second District in an unpublished 2005 ruling concluded two things. First, the court ruled the administrative record was not adequate to resolve the takings claim, so the property owners should be able to submit evidence at trial. Second, the court ruled that even though the property owners stopped pursuing their application, the takings claim was ripe for adjudication because the conclusion of the administrative process was foregone – the property owners could not prove a 1.5 safety factor for Zone 2. The case returned to Superior Court for trial, at which both sides presented expert witnesses to testify about the area's geology. Ultimately, Judge Cary Nishimoto rejected the takings claim because the land's stability was uncertain and because the city's regulation was not unreasonable. During the trial, the city agreed to pay property owners $4 million to drop their claim that the moratorium was a temporary taking. At trial and on the second trip to the appellate level, the issue of "ripeness" returned. Judge Nishimoto determined that the city's regulation was not a taking partly because Rancho Palos Verdes had an administrative process for property owners to gain an exception. Again, the Second District panel rejected the lower court's reasoning. "The City Council had already decided that Zone 2 had a safety factor less than 1.5 and was not going to be persuaded otherwise," Presiding Justice Robert Mallano wrote for the court. "We stated that plaintiffs should not be required to pay between $500,000 and $1 million to conduct a study in an attempt to prove what the city would not believe. Thus, the use of the administrative process was pointless." As in Lucas , the question was whether the regulation was justified by principles of nuisance law, Mallano wrote. And as in Lucas , the government must prove that the moratorium was justified. This the city failed to do, the court concluded. The court said that there was "nothing inherently harmful" in building a house on land zoned and subdivided for residential purposes, that uncertainty regarding land stability was "not a sufficient basis for depriving a property owner of a home," that the city's own expert testified that likely structural damage would occur in areas away from the plaintiff's properties and could be repaired anyway, and that the risk of personal injury was very low. Moreover, the court noted, the city has approved a number of moratorium exceptions for remodel or expansion of existing houses. "The risk of property damage and personal injury, as we have said, is not sufficient in any practical sense to justify applying the moratorium to plaintiff's lots," Mallano wrote. " iven the differing, and sometimes conflicting, views of numerous written reports and several witnesses, the trial court could not make a definitive finding on the safety factor, ultimately deciding that the stability of Zone 2 was uncertain. That finding is simply not adequate to satisfy the city's burden of proof under Lucas and state nuisance law." The city will ask the state Supreme Court to overturn the Second District, Edwards said. "This is a Lucas case, I agree with that. Where I disagree with the court is in how it applied Lucas ," he said. The property owners have not been deprived of their right to develop. They simply must follow the city's requirements, he urged. The larger issue, though, is the public policy for weighing competing interests, Edwards said. Both Selmi, of Loyola Law School, and the Pacific Legal Foundations' Breemer said the state Supreme Court just might accept the case. "It would not be an inappropriate case for the court to review because the city says it is a public safety concern," Selmi commented. But if the decision stands, added Beemer, it could work in combination with a federal court ruling last year that the City of Half Moon Bay's wetlands regulation amounted to a taking (see CP&DR In Brief , May 2008 , January 2008 ) "to signal that localities can't get too confident that they can go out and ban homes or rig the system so you can't build anything." If the state high court does not take the case, the parties will return to trial court for a determination of fair market value without the city's moratorium. Considering that the 16 parcels in question are large lots with ocean views in a wealthy community, the land is probably worth millions of dollars. The city's choice will be to buy the property or lift the restrictions, said Miller, the property owners' attorney. The Case: Monks v. City of Rancho Palos Verdes , No. B201280, 08 C.D.O.S. 12855, 2008 DJDAR 15265. Filed October 1, 2008. Modified October 22, 2008, at 2008 DJDAR 16091. The Lawyers: For Monks: Stuart Miller, Wellman & Warren, (949) 580-3737. For the city: Edwin Richards, Kutak Rock, (949) 417-0999.

State lawmakers need to decide what to do with the Bay Delta, "and soon," the Legislative Analyst's Office urges in a new report. The lengthy document released in late-October is mostly an overview of the state's water system, but the report concludes with several potentially controversial recommendations. The LAO recommends changing the state constitution to eliminate the policies of "first in time, first in right," and "use it or lose." According to the LAO, "The combination of these longstanding policies can lead to inefficient uses of water." The LAO goes on to recommend realigning the water rights system "to better reflect modern needs and circumstances." In addition, the LAO recommends that lawmakers "establish a state-administered water rights system for groundwater," as well as a water quality permitting system that mirrors the existing surface water system. These new programs would eliminate the need for court adjudication of groundwater rights and lead to cleanup of degraded groundwater, according to the LAO, which says that groundwater users and polluters could pay for the bulk of the new program costs. Finally, the LAO notes that all significant water system improvements "hinge on addressing current problems with conveyance of water through the Delta." The report lists three options: (1) build a peripheral canal from the Sacramento River to the State Water Project south of the Delta, (2) construct a "dual conveyance" facility that uses both a peripheral canal and conveyance of freshwater through the Delta, or (3) end water exports from the Delta to the south. "To this end, we recommend that it be a priority for the state to select an alternative to the business-as-usual conveyance approach," the report concludes. The report, "California's Water: An LAO Primer," is available on the office's website .

A Riverside County property owner needed to get a county grading permit to repair a seasonal stream's spillway, even though the state Department of Fish and Game had apparently approved the project and the Federal Emergency Management Agency had funded it. So ruled the Fourth District Court of Appeal, Division Two, in 2 1/2-year-old litigation over a $500 fine. In May 2005, a stream across John Martin's property near Temecula washed out a spillway that provided road access to a mobile home on a portion of the property. The Federal Emergency Management Agency ((FEMA) provided Martin $5,200 to repair the damage, and he commenced work. In early 2006, the Riverside County Code Enforcement Division issued citations and assessed Martin a $500 fine for grading without a permit. Martin contested the citations and fine; a code enforcement hearing officer upheld the county's action. Acting as his own lawyer, Martin sued the county, but a Riverside County Superior Court judge ruled against him. Martin appealed to the Fourth District, but the court determined it did not have jurisdiction and transferred the case to the Superior Court's appellate division. When that court also decided it did not have jurisdiction, the Fourth District took the case back. Armed with an attorney, Martin made four primary arguments to the appellate court: the Fish and Game Code pre-empts local grading legislation; the Department of Fish and Game (DFG) authorized the work in 1993 so no county permit was required; the spillway is a private road subject to an exception from the county grading ordinance; and the project qualified for an exception for moving less than 50 cubic yards of material. The unanimous three-judge panel rejected all of the arguments. "The county's grading ordinance is not a local regulation but originates in state housing law, including the Uniform Building Code," Justice Barton Gaut wrote for the court. The state law requires cities and counties to adopt building standards, including standards for grading and excavating, Gaut wrote. Both the Fish and Game Code and FEMA acknowledge the need for local permits, Gaut continued, also rejecting the contention that the grading was eligible for an emergency exemption. Martin did not repair the spillway for seven months and secondary access was available to the mobile home anyway, so there was no emergency, the court determined. The secondary access also eliminated the argument that the work was eligible for an exception as repair to a private road. As for the small project exception to the county ordinance, the court cited the Superior Court's conclusion that 221 cubic yards of material was the "more plausible" amount involved. Besides, Gaut wrote, the exception is for excavation, while Martin's project involved placing fill in a streambed. The Case: Martin v. Riverside County Department of Code Enforcement , No. E046276, 08 C.D.O.S. 12428. Filed September 19, 2008. The Lawyers: For Martin: Stephen Lindsley, Ackerman, Cowles & Lindsley, (951) 296-1698. For the county: Bruce Fordon, county counsel's office, (951) 955-6300.

Supporters and opponents alike are touting SB 375 as the most significant land use reform bill in recent California history. When he signed it in September, Gov. Schwarzenegger called it the biggest bill since passage of the California Environmental Quality Act 38 years ago. Meanwhile, the hilariously over-the-top Orange County Register has called the bill "one of the most authoritarian, far-reaching and elitist bills that has ever made it to the governor's desk." In fact, it is neither. Senate Bill 375 is not a revolution. Rather, it is a step – admittedly a very big step – in California's gradual transformation from suburban planning to urban and metropolitan planning. This transformation does not begin with SB 375 – nor will it end with SB 375. At bottom, this highly publicized bill – pushed through the Legislature for two years by the Senate's now-leader, Darrell Steinberg (D-Sacramento) – is an air-pollution bill. The goal is to promote growth patterns that will help to reduce greenhouse gas emissions (mostly carbon dioxide) by reducing driving. It's also a regionally based bill, not one that places all the power in Sacramento. The California Air Resources Board will set targets for greenhouse gas reduction via land use in each region. Then each region's Metropolitan Planning Organization (MPO) – such as the San Diego and Sacramento associations of governments – must create a "sustainable communities strategy" as part of the Regional Transportation Plan that will meet the target. The bill is incentive-based, not regulatory. Transportation projects that go through the MPOs must conform to the sustainable communities strategy – but those judgments are made by the MPOs themselves. There are CEQA exemptions and breaks for projects that conform to the sustainable communities strategy – but nothing mandatory. And, at the behest of local government lobbyists, the law specifically states that local land use authority is not usurped or overridden by SB 375. All this is not really revolutionary land use reform – especially compared with the pathbreaking growth management bills passed in Oregon during the 1970s, Florida during the 1980s, and Washington during the 1990s. In Oregon, the most top-down system in the country, the state required the creation of urban growth boundaries around each metropolitan area and established a state department to oversee implementation of the law. In Washington, there was more power-sharing with the locals and the system is more incentive-based, but the locals must meet state growth goals and local decisions may be appealed to regional land use boards. In Florida, all local plans must be approved by the state government, and all plans within the same county must be submitted for state review at the same time. All three of these laws had two things that California still does not have: a strong and direct role for the state government and an overt focus on the actual use of land. Senate Bill 375 is clearly intended to alter land use patterns, but most of the language that overtly tied the bill to things like urban growth boundaries and protection of resource lands got removed or heavily watered down. In other words, SB 375 is by no means a comprehensive growth management or land use reform law. It's a law designed to alter land use patterns as a means of achieving a small part of a much bigger goal – reducing greenhouse gas emissions. As such, however, it is a pretty big step in the very gradual shift in California planning policy from a suburban orientation to an urban orientation. This shift is reflective of changes in the state as a whole. When I first started writing Guide to California Planning in 1989, it quickly became clear to me that California had a land use system that was focused around an organizing concept that even then seemed a bit outdated – "the suburban growth model." The assumption embedded in both general plan law and the California Environmental Quality Act – both of which have not been comprehensively reformed since the early 1970s – is that the context of planning in California is the building out of individual suburban communities. This is part of the reason the general plan law does not require city and counties to acknowledge the plans being created by their neighbors. And it is the biggest reason why CEQA works so much better when applied to an individual greenfield development project than to a small infill project. By the time Paul Shigley and I finished the Third Edition of the Guide in 2005, the disconnect between the suburban growth model assumed in the laws and the built-out communities that represented California's reality was more obvious than ever. And for almost 20 years – dating back to the real estate boom of the late '80s – planners and environmentalists had been clamoring for comprehensive reform that would bring California into the infill age. In the meantime, however, California had taken a number of steps – some strong, some weak – to change the old system. For the most part, these steps did not take on general plans and CEQA directly. But the reforms did gradually change both the reality of the system and its underlying assumptions. For example: • The MPOs now have far more power than ever before to make transportation spending decisions in their regions, while the state has less. As a result, in both the Bay Area and Los Angeles, most transportation capital spending goes to transit, not highways. • Partly encouraged by a series of state grants, these same regional planning agencies have already devised regional strategies – often called "blueprints" – designed to accomplish more or less the same goal as the "sustainable communities strategy" in SB 375. Implementation is spotty, but everybody has gotten used to the idea of regional agencies doing this kind of planning during the last few years. • The state has become more aggressive in doling out money to support more urban models of development. Only a few months ago, the Department of Housing & Community Development gave away a half-billion dollars in Proposition 1C money for transit-oriented and infill projects (see CP&DR Insight , August 2008 ). This is a long way from Maryland's practice of directing most state money to support a particular development pattern, but in a real estate downturn, California's grants will have a significant impact. • The state has taken sweeping policy steps to embed a more urban development model in the state's own practices – if any governor cared to make use of those policies. Most important is AB 857, the 2002 law that requires that all state actions support infill development, protection of open land, and compact greenfield development. The law has never really been implemented, but it does at least theoretically provide a strong policy foundation for a more urban development pattern. Senate Bill 375 should not be viewed in isolation. It has to be seen in the context of all these other steps. California has not yet completed the revolution in land use policy that SB 375 seems to promise, and the suburban growth model will clearly die hard. But all these steps put together would seem to suggest that California's land use policy landscape really is headed down a more urban path.

A property owner's challenge of a Sierra Madre City Council resolution directing a committee to consider stricter regulation of hillside development has been thrown out by the Second District Court of Appeal. The unanimous three-judge appellate panel upheld a trial court judge who had ruled that the situation was not "ripe" for judicial review. Although the resolution might lead to less potential development, the resolution itself had no binding implications for the property owner's land, the Second District determined. "Courts may not render advisory opinions on disputes which the parties anticipate might arise but which do not presently exist," Justice Madeleine Flier wrote for the court. Sierra Madre is a small city on the edge of the San Gabriel Valley. Development in the foothills of the San Gabriel Mountains within the city has long been controversial. In August 2005, the City Council adopted an urgency ordinance, extended the following month, that essentially requires developers within a moratorium area to comply with provisions of the city's hillside management zone (HMZ). Among other things, it bases minimum lot sizes on the severity of the slope. In November 2005, the City Council adopted a resolution appointing an HMZ advisory committee to study and provide recommendations on potential revisions to the HMZ regulations. The resolution urged consideration of minimum lot sizes as large as 1 acre. In January 2006, Stonehouse Homes submitted an application for a vesting tract map for 25 acres owned by the company, and an application for a conditional use permit to develop under the HMZ provisions. The city returned the applications because they were incomplete. Stonehouse filed updated applications on April 17, 2006. The next day, the City Council voted 3-2 to approve a new moratorium resolution directing the Planning Commission and the HMZ advisory committee to prepare final recommendations for specific conditions and new subdivision lot dimensions for the HMZ. Thirty days later, the city again returned Stonehouse's applications as incomplete. Stonehouse appealed the staff's conclusion to the Planning Commission but lost. While an appeal of the applications' completeness to the City Council was pending, Stonehouse filed a lawsuit. It alleged that the resolution adopted in April violated the property owner's due process and equal protection rights and was, therefore, invalid on its face. Los Angeles County Superior Court Judge Ronald Sohigian ruled for the city, concluding the developer had not proven its case and was seeking an advisory decision that courts do not issue. Continuing to maintain the resolution was invalid on its face, Stonehouse on appeal argued that the case was ripe for court review because the company had no administrative remedy available. Stonehouse argued that the resolution required the Planning Commission to prepare specific zoning, so the resolution was essentially legislation. But the court found the resolution "does no such thing." "The adoption of the resolution alone implicated no rights of Stonehouse. The resolution was not an ordinance that amended the HMZ provisions. Nor did it require the Planning Commission to recommend adoption of such an ordinance. The moratorium resolution simply requested preparation of final recommendations regarding potential amendments to the HMZ provisions and provided notice to the public about the changes under consideration," Flier wrote. Stonehouse contended a court ruling was needed because the company sought to use the "safe harbor" provision of the Subdivision Map Act to prevent the city from imposing new conditions on the already-filed applications. "The problem with Stonehouse's contention," Justice Flier wrote, "is that any alleged entitlement to a safe harbor is purely conjectural absent a final application, a newly adopted HMZ ordinance and application of such an ordinance to Stonehouse." Thus, the court concluded, there is no "justiciable controversy" for it to decide. The Case: Stonehouse Homes v. City of Sierra Madre , No. B195552, 08 C.D.O.S. 13133. Filed October 10, 2008. The Lawyers: For Stonehouse: Garrett Hanken, Greenberg, Glusker, Fields, Claman & Machtinger, (310) 553-3610. For the city: Sandra Levin, Colantuono & Levin, (213) 533-4155.

If you can tolerate a little smugness and edginess, college towns are often the best towns of all � and college downtowns are often the best downtowns, especially in small cities. College towns bring together smart and creative people, and those of us who like to associate with smart and creative people. The best college towns threaten to explode at any moment with youthful energy. In a true college town, the institution of higher education is the predominate feature. The school's events and even the physical campus commingle with the rest of town to create one large entity. And because students are less likely to drive, college town downtowns are often wonderfully vibrant and pedestrian-oriented. East of the Mississippi River, you'll find a four-year college in seemingly every Podunk of 20,000 people. Important large universities are often located in fairly small towns. Indiana University, University of Virginia, Penn State and University of Vermont are a few examples. Not surprisingly, Bloomington, Charlottesville, State College and Burlington are great college towns. California is different. Many large public universities � such as UCLA, UC San Diego and San Jose State � are simply one part of a big city. Schools in the California State University system are often "commuter schools" in suburban areas. The same is true of private schools. Even in college-oriented towns, there's a big contrast between East and West. Take the difference between Cambridge, Massachusetts, and Palo Alto, for example. Cambridge, of course, is home to Harvard and is located amidst a collection of schools that includes Boston University, MIT and University of Massachusetts. When you're walking around Cambridge, you can scarcely tell whether you're on a city street or the Harvard campus. It all runs together in a glorious mix of classrooms, labs, offices, studios, housing, libraries, gathering spaces, churches and athletic facilities. Some of it is Harvard, some of it is public, and much of it is a quasi-public mix of Harvard, private enterprise and municipal. Academically, Stanford may be the Harvard of the West. But Palo Alto is no Cambridge. Stanford lies on a campus so gigantic it is known as The Farm (and it's not within the city limits). The campus is gorgeous, but there's a reason that Stanford's campus contains many parking lots: The town of Palo Alto is distant. Downtown Palo Alto is a fairly lively place that's full of extremely well-educated people, but students and teachers can't simply walk over for lunch or a latte or a draught during a free period. Nor is there a big college nightclub or arts scene in Palo Alto. The offices and labs of all the brilliant Stanford grads? Try Cupertino or Mountain View. Still, California does have a smattering of true college towns, each with its own unique flavor. The best are remarkable places. � 1. Davis. Without the University of California, Davis would be just another valley town amid the tomato fields. But it's impossible to imagine Davis without the university because it defines the town. Downtown Davis, located an easy bike ride from campus, is a lively place full of the usual college town coffee houses, nightclubs, bookshops and late-night pizza stops. But downtown Davis even has some offices where college students and grads might work. Neighborhoods near campus provide a nice variety of student housing. The open and inviting campus offers plenty for non-students, including recreation, and cultural and sporting events. Plus, practically everyone gets around via bicycle or foot. Davis is the prototypical college town. 2. Chico. In 1987, Playboy magazine ranked CSU Chico the biggest party school in the country. No one who attended Chico State during that era, or lived anywhere in the region, could argue against the ranking. But the days of 5,000-student, open-air keggers and the weeklong drunken orgy of Pioneer Week have ended.� That's probably for the best. Still, Chico is very much a college town. One of the reasons we raved about downtown Chico one year ago in our list of the best mid-sized city downtowns is the downtown's proximity to campus and student housing, and the energy that students bring to downtown. In fact, students and upstart businesses run by former students are all over town � including the giant Sierra Nevada Brewing Company. 3. Berkeley. Forty years ago, Berkeley was the most famous � or infamous, depending upon your point of view � college town in the country. Birthplace of the free speech movement and home to daily anti-war protests, Berkeley truly did bubble over with youthful exuberance. Righteously liberal politics still dominate the city, and so does the UC campus. It seems like everyone in town has some connection to the school. Some portions of downtown and the University Avenue corridor have struggled over the years, but downtown Berkeley continues to evolve into one of the Bay Area's great urban places. And Berkeley is similar to many East Coast college towns in that campus activities spill into town, and sometimes it seems as if there are as many non-students as students on campus. 4. San Luis Obispo. There is no question that SLO is one of the best small downtowns in California. And there's no question that a lot of that has to do with the fact that it's a college town. The college kids create a local market for downtown businesses � and the college kids want to stick around after school, so they are often underemployed in downtown retail businesses or launch their own startups so they don't have to move. But the downtown and the college aren't seamlessly integrated, like they are in Davis, Chico, and Berkeley. Cal Poly is a pretty typical '60s California campus � suburban, with mostly undistinguished architecture. And it's separated from the downtown by an auto-oriented commercial strip. Honorable Mentions � Isla Vista. Although the school is called UC Santa Barbara, the campus is located in the unincorporated area known as Isla Vista, (simply "IV" to locals). It's an extremely bike-friendly community that exists in its present state solely because of the college. Unfortunately, because Santa Barbara is 10 miles away, IV is something of a student ghetto. And downtown Santa Barbara, although fabulous in many ways, is a little short of the youthful energy that UC students could provide. � Arcata. An interesting mix of students, yuppies, artists, loggers and fishermen make up the home of Humboldt State. The tension inherent in that demographic mix helps create the feel of a college town circa 1972. But the town is welcoming and has a marvelous can-do, independent streak to it � much like the most remote of the CSU schools. � Santa Cruz. Set amidst the misty redwood forest, the UC Santa Cruz campus provides a delightful academic setting. And located just up from one the state's great beaches, downtown Santa Cruz is a funky, spunky beach town that has only gotten better since rebuilding after the 1989 earthquake. Unfortunately, the campus and the beach town are about three traffic-choked miles apart. The campus's isolation causes the college energy to peter out before it reaches most of town, which seems to be just fine with some locals. � Claremont. Although Southern California has no true college town, the home to The Claremont Colleges on the far eastern edge of Los Angeles County is a fair approximation. The downtown, called Claremont Village, is a fairly thriving area right across College Avenue from campus. No hordes of college kids on bicycles here, but you'll still find some of the usual college town offerings in an inviting, walkable district. - The CP&DR Staff

The other shoe has dropped on the SB 375 front, as the California Air Resources Board has more than doubled the target for greenhouse gas emissions reductions to be obtained through regional planning. This new target -- 5 million metric tons of carbon dioxide equivalent per year – was released on October 15 as part of CARB's "Proposed Scoping Plan" for AB 32. That's up from 2 million tons in the Draft Scoping Plan released in June. This target will put a lot more pressure on regional planning agencies to create compact land use plans that reduce greenhouse gas emissions by reducing vehicle miles traveled. But it may also put more pressure on local governments to reduce emissions from their operations and other sources. The draft plan in June apparently combined land use and local government operations within the 2 million tons. The recently released proposed plan separates them out – requiring 5 million tons out of land use and a 15% reduction from local government operations. Under SB 375 , CARB must take the 5-million-ton target and dole it out to the regions by 2010. Then each regional planning agency must devise a "sustainable communities strategy" that lays out a growth scenario that will meet the target. Transportation projects must conform to this strategy. Local plans don't have to conform to this strategy, but individual projects that do conform might qualify for streamlining or even exemption under the California Environmental Quality Act. -- Bill Fulton

SB 375 has left a lot of public commentary in its wake, but none more hilarious than a hostile editorial in the reliably libertarian Orange County Register , which refuses to believe that anyone in the homebuying marketplace would ever want to purchase anything other than a single-family house on a large lot. The editorial -- titled "Want to live in a condo by the train tracks?" – provides a few chuckles in the way it characterizes SB 375's impetus (calling smart growth a "highly controversial and authoritarian concept") and outright guffaws in the way it mischaracterizes what the law actually does. The editorial claims: "SB375 will transfer decisions about local developments from property owners and local cities to state environmental officials." (In fact, the law specifically states that local land-use authority is not being usurped.) Indeed, the Register makes Tom McClintock's remarks on the same topic seem measured in comparison. Most amusing of all, however, is the way the Register conflates the free-market idea of what people want with the socially conservative idea of what people should want. Simply put: Despite its supposedly free-market orientation, the Register can't imagine a world in which some people might answer their derisive question –"Want to live in a condo by the tracks?" – by saying yes. The Register 's underlying assumption is that everybody wants to live in a single-family house on the largest possible lot. Left to its own devices, the market would produce only single-family subdivisions and nothing else. Therefore, the construction of anything other than single-family houses must, ipso facto , be the result of government coercion rather than market choice. In fact, the opposite is true – especially in a crowded and expensive place like Orange County. Left to its own devices, the market would probably produce more high-density housing, because a significant portion of the market either does not want or cannot afford a traditional suburban lifestyle. Meanwhile, local government regulation – zoning -- often interferes with the market by ensuring low-density development in many areas where higher-density housing would succeed in the marketplace. This is especially true in affluent conservative suburbs, where homeowners use regulation ferociously to protect their turf. In recent years, two Orange County cities -- Mission Viejo and San Juan Capistrano -- have blocked higher-density housing proposals because of public opposition. This is part of the reason SB 375 is necessary. But this is an inconvenient truth for the Register and the rest of the libertarian-leaning anti-anti-sprawl crowd. It seems to me that these folks – including such pundits as Randall O'Toole and sometimes even Sam Staley , who I've worked with and like – are so tied to conservative social values that they can't tell the difference between what people want and what they should want. In fact, however, conservative social values and the free market sometimes part. It may be that social conservatives believes that everyone should live in a traditional family setting, and to them this may well mean everybody should live in a traditional single-family suburban neighborhood. But that is not the same as saying that this is what the market actually demands . Even in Orange County, the homebuying (and renting) public is more diverse than ever before. There are singles and childless couples (some same-sex) and empty-nesters, many of whom prefer and can afford a more suburban lifestyle. There are vast numbers of families with modest incomes who might aspire to a suburban lifestyle but will never be able to afford it. There are even a growing number of working-class and middle-class families who are unwilling to endure the long commutes required to have a traditional suburban lifestyle in Southern California. All these different groups put together represent a large portion of the home market – maybe not a majority, but probably 30-40% at least. And even if all these folks wanted single-family homes in Orange County, the market couldn't accommodate them. Land there is so expensive now that most developers would choose to build higher-density projects; maintaining a single-family landscape would require enormously heavy-handed government regulation. And even if all new housing in Orange County consisted of detached single-family homes, those houses built would cost millions of dollars each. (Even in the recent real estate crash, the median price of a single-family home in August was $959,000.) That's far beyond the reach of most of "the market". It would be one thing for the Register to argue, Peter Gordon - style , that government has no business regulating land use, so zoning should be abolished and let the chips fall where they may. That's an intellectually honest libertarian position and I can respect that. But it is unfair to smart growth advocates – and to the idea of libertarianism – to suggest that the free market should be unshackled only for those who agree with the Register 's social values – and not for anybody else. -- Bill Fulton