"I don't have to talk to you," the developer says to the public official. "I have the right to build whatever I want, wherever I want it." How many developers, exhausted or hamstrung by local government, have longed to say those words? And how can local government respond, when a developer actually does say those words to them — with the full support of federal law? As it turns out, at least one group of developers in California actually can say those words, and back them up: Native American tribes that want to develop gambling casinos Despite those unquestioned powers, Placer County found a way of entering into a dialogue with a local Native American tribe on the ticklish question of casino development, and eventually got the tribe to agree voluntarily to abide by local land-use controls. Both the president of the Placer County Board of Supervisors and an attorney for the tribe praise the pact as a model for future cooperation between Indian tribes and local governments. Like it or not, casino gambling on Indian reservations is a rapidly growing phenomenon in California, where at least 67 Indian tribes are currently seeking to build or expand casinos, according to the Associated Press. Under the Indian Gaming Regulatory Act of 1988, Native American tribes that are recognized by the U.S. government have the right to build casinos without regard to local land-use controls; the language of the statute explicitly states that local government regulations do not apply. Being a pest, or threatening to become one, was the way that a Placer County supervisor brought one tribe to the table. In 1994, Congress granted official recognition to the United Auburn Indian Community, which gave the tribe the right to acquire land anywhere in the county for the purpose of creating a reservation. (The tribe heretofore has been landless.) In 1997, representatives of the tribe approached then-newly elected Supervisor Robert Weygandt and informed him that the tribe intended to build a 200,000-square-foot casino near Penryn, which is located just off heavily traveled Interstate 80 about 30 miles northeast of Sacramento. Although a freshman supervisor, Weygandt had just completed four years on the county's Planning Commission and had a better-than-average sense of land-use law. Shortly after tribal officials presented their plans to Weygandt, he drafted a resolution, which the Placer County Board of Supervisors later approved, that essentially said the tribe should respect county land-use planning. "I was not an opponent of the proliferation of gambling in the state," Weygandt said. "My problem was more the exemption from land-use planning. The supervisor figured he had nothing to lose by asking the Native Americans to comply with the local rules. He also thought it conceivable that the tribe would want to avoid the sort of bad blood that was brewing between members of the Shingle Springs tribe and residents of nearby El Dorado County, where the tribe wanted to build a 100,000-square-foot casino and 325-room hotel just east of Sacramento. Weygandt now acknowledges that the resolution was a bit of a bluff. "We all sort of knew that the only real right the county had was to challenge the project on a NEPA issue." If the tribe chose to build on land that was environmentally sensitive and could trigger the federal law, Weygandt reasoned, the county might obtain the leverage it needed to fight the casino. In his view, the Penryn site may have been sensitive enough. A few months later, Weygandt wrote a letter to the tribal chair to see how receptive the tribe would be to talking. To Weygandt's surprise, tribal officials wrote back and said, in effect, that they were willing to comply with all local land-use standards, including traffic mitigation, design review guidelines and environmental review. Weygandt is still not sure what convinced the tribe to accept the county's conditions. "I gave them the best possible sales routine, that one player that was not playing by the rules could ruin a whole community," the Placer County supervisor recalled. "Somewhere in the process they genuinely embraced the theory. I tell people that (the Native Americans) became born-again land-use planning advocates." Eventually, the Auburn tribe agreed to locate the casino on a 58-acre site within a 9,000-acre industrial park in the City of Rocklin, a few miles west of Penryn. The site was already designed for intense traffic impacts, and the location could serve as a buffer between the casino and residential neighborhoods. Last August, the county and the tribe finalized a memorandum of understanding. The agreement does not require the tribe to submit to either the county building department or CEQA. Instead, the agreement "sets out the standards that are going to apply, as a matter of tribal law, and gives the county certain assurances with which the tribe will meet those standards," said Howard Dickstein, the tribe's attorney. If the county does not agree, it can initiate arbitration procedures. The agreement also establishes a committee to monitor the relations between the county and the tribe, and to propose amendments to their agreement, if and when needed. The committee becomes the forum for doing business and resolving disputes between the county and the tribe. Dickstein sounded even more impressed with the agreement than was Supervisor Weygandt. The agreement between the Auburn tribe and Placer County is "the most comprehensive agreement of its kind, not only in the state but in the nation." The pact, he continued, "reflects a kind of maturity on the part of both governments, and a recognition that they are interdependent." Sovereignty, according to Dickstein, "no longer means drawing a line in the sand." One irony of the situation is that several other Indian tribes have expressed concern that the Auburn-Placer agreement would become a precedent that could have the ultimate effect of eroding the right of Native Americans to develop free of land-use regulation. I admire the Auburn tribe for behaving like neighbors, rather than like an imperious sovereign nation, or, even worse, like a neighboring California city. In the state's present climate, it is refreshing to hear someone say, "I can build whatever I want, but I will talk to you about it anyway, because we are neighbors and our mutual well-being is interconnected." With 67 more casinos in the offing, it would be good to hear those words more than once.

In a decision that could have implications for the cleanup of polluted industrial sites, the Second District Court of Appeal has ruled that an oil company's insurer has no responsibility to pay for state-mandated remediation. In a 2-1 ruling, the court held that the insurer's promise to defend a "suit" did not force the insurer to defend an administrative proceeding. Furthermore, the court said, the insurer must pay only court-ordered damages, and not fines coerced by an administrative agency. In a dissent, Justice Richard Aldrich wrote that the majority ruling "frustrates the legislative purpose behind the administrative procedure to effect speedy, efficient response and remediation of our environment." The case arose because of pollution at refineries operated by Powerine Oil Company. During its peak, Powerine operated numerous Southern California facilities, including its original Santa Fe Springs refinery opened during the 1930s. By the mid-1980s, however, a poor petroleum market had forced Powerine into bankruptcy and the only facility still operating was the company's Santa Fe Springs refinery. In 1985, the Los Angeles Regional Water Quality Control Board issued a cleanup and abatement order for the Santa Fe Springs facility because leaking jet fuel, gasoline and other petroleum products had contaminated the soil and groundwater. In later years, the San Diego Regional Water Quality Control Board ordered cleanup of Powerine's former San Diego storage facility, and the Los Angeles board issued another order to clean up pollution. In total, the water boards cracked down on 10 Powerine sites. Also, the federal Environmental Protection Agency named Powerine as a potential responsible party (PRP) for the cleanup of hazardous waste dumps in Santa Fe Springs and Monterey Park, both of which had accepted materials from Powerine. The company, which conceded at least some responsibility for the pollution, turned to its several insurers for help in defending the administrative actions. However, the insurance companies, with one exception, denied coverage. One of the insurers sued to get a declaratory judgement regarding the coverage issue. Powerine counter-sued all of its insurers and won a portion of its suit at the trial court level. On appeal, the insurance companies relied heavily on a decision made last year by the California Supreme Court in Foster-Gardner, Inc. v. National Union Fire Ins. Co., (1998) 18 Cal.4th 857 (mod. at 19 Cal.4th 253). The court ruled in that case — involving an insurer's duty to defend during an environmental compliance administrative process — that the "unambiguous language of the policies obligated the insurers to defend a ‘suit,' not … the ‘substantive equivalent' of a suit." The insurance companies' argument persuaded the majority on the Second District, Division Three bench. The appellate court said that the Foster-Gardner decision was based on a literal interpretation of contract language — not a functional interpretation. Further, the Foster-Gardner decision provided a "bright-line" rule that limits an insurance company's obligations, Justice Walter Croskey wrote in his opinion. Because Powerine chose to comply with the cleanup orders, no court order — for which the insurer would be responsible — existed. Croskey quoted from a similar Illinois case, Zurich Ins. Co. v. Carus Corp., 293, Ill.App.3d 906: "The rule … is clear: an insurer's duty to defend and indemnify is triggered by a suit against the insured, and in the absence of a lawsuit, no such duty exists. Since no suit was brought against , the insurers had no duty to defend or indemnify." But in the dissent, Aldrich said the literal interpretation was improper, and he called the majority decision "shortsighted." He argued that the costs of complying with the government's remediation orders qualified as "damages" that the insurers had a duty to indemnify. The difference had to do with the method the government used to enforce cleanup requirements, and "our Supreme Court has repeatedly rejected a construction in which coverage turns on the form of action taken against the insured," he wrote. The majority's ruling forces a polluter to ignore an agency's cleanup orders and await an adverse court judgement from an agency-initiated lawsuit, Aldrich wrote. In that instance, the government would undertake the cleanup and give the bill to the polluter, which could be ruined by the expense of the cleanup and the penalties for violating cleanup orders. Plus, environmental remediation, the goal of the entire process, would be delayed. At the court's request, a number of parties submitted amicus briefs, including, on behalf of Powerine, the state Attorney General's Office and the Port of Oakland. The Case: Certain Underwriters at Lloyd's London v. Superior Court, No. B129909, 99 C.D.O.S. 8564, 1999 Daily Journal D.A.R. 10929, filed October 25, 1999. The Lawyers: For Lloyd's: Patrick Cathcart, Hancock, Rothert & Bunshoft, (213) 623-7777. For Powerine: David Isola and Aaron Bowers, Isola & Bowers, (209) 367-7055.

From the viewpoint of the timber industry, the state Board of Forestry is working on a package of rules that would significantly reduce timber harvests on private property. From environmentalists' standpoint, the board is laboring over rules that do not go nearly far enough toward protecting water courses and endangered salmon from the effects of logging. The two sides agree on one thing — state forestry regulators do not have adequate data and analysis to make new rules. "Our concern is that they really did not take the time at the beginning, nor have they taken the time since, to dig into what the underlying concerns are," said Mark Rentz, California Forest Association vice president for environmental and legal affairs. Kevin Bundy, of the Environmental Information and Resource Center, sounded a somewhat similar note. "It's unclear to what extent the science that has been developed has been relied upon," he said. State officials disagree and they continue to refine proposed regulations aimed at threatened and impaired watersheds. Driving the new rules is the listing of coho salmon as a federally endangered species, and the pending listing of steelhead. Officials say the rules would protect fish and improve water quality in rivers, primarily by decreasing the amount of sediment that washes into rivers and by keeping streams colder. The Board of Forestry first released the proposal in July, and the board conducted public hearings during September and October before deciding to convene a committee to work on the details. "I like to think we are moving forward," said Dennis Hall, regulations coordinator for the California Department of Forestry and Fire Protection and a board staff advisor. "There is obviously a need to protect watersheds." Exactly what the rules would do is difficult to define because the rules are a work in progress and the board has not chosen from multiple alternatives. Essentially, the package addresses logging near streams and rivers, activity on unstable slopes, road building, and monitoring after a timber harvest. By expanding the definition of a river's "channel zone," the rules could reduce logging near watercourses, Hall said. Currently, the channel zone ends at the first line of permanently established riparian vegetation, and logging generally is prohibited inside the line. One of the proposals would expand the channel zone to encompass a river's alluvial floodplain. Some North Coast rivers, such as the Russian, run through large, nearly flat floodplains. Originally, the rule package called for extensive post-harvest monitoring to determine the effects of logging and accompanying mitigations. However, concerns over gaining access to remote areas, the costs for small landowners and an undefined role for the state has complicated things, Hall said. Still, some additional monitoring requirements are being considered. Maybe the biggest point of contention concerns where the rules would apply. A Scientific Review Panel convened last year by state and federal regulators extensively studied the North Coast and made detailed recommendations for new timber harvest regulations in that area. However, the federal Environmental Protection Agency has expressed concerned about the quality of water in streams throughout the state, Hall noted. Thus, the rules could extend to all state-owned lands and all of California's 7.5 million acres of private timberland. (The U.S. Forest Service regulates logging in national forests.) The National Marine Fisheries Service has pushed for stiffer logging rules because of the strong relationship between forest practices and salmon health, said Joseph Blum, NMFS fisheries administrator in Sacramento. "The rules themselves are simply not adequate to take salmon into account and then do something. The ‘do something' part is deficient," Blum said. "We have continued decline in the overall picture for salmon." But Rentz, of the California Forestry Association, said existing rules in nearly all cases are adequate to protect fish and water quality. "A lot of the concerns are questions of implementation," he said. To that end, Rentz noted, Gov. Davis has approved an additional $7 million for review of logging activities. Rentz and others contend the rules package, if adopted, would severely damage the industry. "It takes a significant portion of the remaining private forest land out of production," Rentz said. "On other lands, it would limit the economic feasibility to such a point that you couldn't economically afford to log that land." He pointed to a study, commissioned by the CFA, that estimated a direct loss of 2,000 jobs in the short-term and 4,000 jobs in the long run, and an economy-wide job loss that could reach 8,000. That study, by Professor William McKillop of the University of California, Berkeley's College of Natural Resources, predicted a reduction in private land timber harvest of one-sixth to one-quarter. "As a result of the impact on all private timber harvests, the total economic loss (in 1999 dollars) from adoption of the proposed rules will be approximately $250 million per year in the short-term and $430 million in the longer-term," McKillop concluded. Bundy, of Mendocino County-based EPIC, which gained notoriety during the Headwaters Forest fight, said revised logging rules are overdue, but the package before the Board of Forestry is inadequate. For example, state regulators have not even defined a "no-cut zone" near streams, he said. State officials need to insist on a more rigorous analysis of factors affecting salmon habitat and water quality, he said. As it stands now, most timber harvest plans contain only a boilerplate description of a project's potential impacts, he said. "Until that basic flaw is addressed, tinkering with buffer zones and road building will not allow watersheds and fisheries to recover," he said. Bundy recommended the state impose strict no-cut zones in sensitive areas, prevent activity on unstable hillsides, prohibit some water crossings and order removal of some logging roads. Most importantly, he said, state regulators should insist on a better scientific analysis of all factors impacting salmon and water quality, he said. EPIC has already threatened litigation if the rule package is adopted without significant revisions. The rules would result in a "take" of coho salmon, which the federal government has prohibited since 1997, and for which the state should be held liable, Bundy argued. Both sides urged state regulators to go back to a firmer scientific basis before taking action. But that does not appear likely to happen. The Board of Forestry, which normally does not meet in December, scheduled meetings this month to continue work on the rule package. Blum, of the NMFS, said he is optimistic the board will at least take a necessary step toward reforming timber harvest practices. The board's goal is to complete the regulations by mid-March, said Hall, of the CDF. The regulations would become effective July 1, 2000. Contacts: Dennis Hall, California Department of Forestry and Fire Protection, (916) 653-9418. Joseph Blum, National Marine Fisheries Service, (916) 498-6696. Mark Rentz, California Forestry Association, (916) 444-6592. Kevin Bundy, Environmental Protection and Information Center, (707) 923-2931. Web Site: www.fire.ca.gov/bof/board

The future of the El Toro Marine Corps base in Orange County remains as clouded as ever, with voters likely to decide in March on an initiative that could doom a commercial airport proposed for the site. A 3-2 majority on the Orange County Board of Supervisors continues to push ahead plans for an international airport at El Toro, located in and adjacent to the City of Irvine. But the Safe and Healthy Communities initiative would require two-thirds of voters to approve a new airport. Further increasing tensions is the creation of new cities near El Toro, partially in response to the county's airport plans. Those incorporations result in new political entities that can aid the anti-airport fight. After years of winding down activity, the Marine Corps left El Toro for good in July. Because El Toro appeared on the base closure list in 1993, a great deal of time existed to plan for base reuse. However, Orange County split into pro- and anti-airport factions with the passage of a 1994 initiative that designated the 4,700-acre site for an airport. A 1996 initiative to overturn the previous one failed, further bolstering airport supporters. The plan advanced by the county, which the Department of Defense has designated as the official reuse agency, calls for an airport capable of handling 28 million passengers and 2 million tons of air cargo a year. (See CP&DR, January 1997, July 1996.)That is roughly the number of passengers at Sky Harbor Airport in Phoenix, and about three times the number of passengers who currently use the heavily constrained John Wayne Airport, eight miles west of El Toro. The county is completing an environmental impact report, which supervisors are scheduled to consider next spring. But unincorporated communities south and east of El Toro are unhappy with the county's plans and are joining the fray as new cities. The gated retirement community Leisure World, which lies directly under the El Toro flight path, incorporated as the City of Laguna Woods in March. Voters in the planned community of Rancho Santa Margarita, a few miles east of El Toro, were expected to vote for cityhood on November 2. No major opposition arose to making the community of 31,000 people Orange County's 33rd city. Next up on the cityhood list is Aliso Viejo, a community of about 40,000 people southwest of El Toro which also lies under the flight path. The new Laguna Woods City Council (see CP&DR, May 1999) almost immediately voted to join a coalition of seven other cities, known as the El Toro Reuse Planning Authority, that is fighting the proposed airport. Airport opposition is not the only reason behind the latest two proposed incorporations, but it is a factor, said Dana Smith, Orange County Local Agency Formation Commission executive officer. "Like everything in Orange County, El Toro sits as an undercurrent," Smith said. The city coalition this year plans to spend about $6 million on marketing and planning. The coalition continues to fine tune its Millennium Plan, which calls for a mix of industrial, retail and residential development at El Toro, plus parks and schools. The plan won an award from the California Chapter of the American Planning Association in October but that has not convinced the Board of Supervisors' slim pro-airport majority. "From my standpoint, it's going to be an airport," said Charles Smith, chairman of the Orange County Board of Supervisors. "The economic forces behind it are too great. The only question is when." The Safe and Healthy Communities Initiative could make that question difficult to answer. The initiative would require two-thirds of county voters to approve of a new or expanded airport, a new or expanded jail, or a hazardous waste landfill. Initiative backers provided plenty of signatures to qualify the initiative for the ballot. However, a collection of business groups has sued to block the measure from the ballot. Airport backers argue that only county supervisors, not county voters, can decide the location of major facilities such as airports. Los Angeles County Superior Court Judge Dzintra Janavs has scheduled a hearing for November 19. Passage of the Safe and Health Communities initiative would "sound the death knell for an airport," said Supervisor Tom Wilson, an airport opponent whose district includes both El Toro and John Wayne airport. He supports the initiative. "I don't think the elections that went by (in 1994 and 1996) really tell the whole story," said Wilson. "The public, whether they voted last time or not, today is becoming more and more educated as to reuse of that property. And with that education comes a more sophisticated voter." Wilson contended he and Supervisor Todd Spitzer, the board's other airport opponent, are shut out of airport planning discussions. "Communications are not what we would like them to be. I believe the airport minority is not privy to information given to the majority," Wilson charged. But Board Chairman Smith said he was "not too sympathetic to their concerns." He said staff members have intentionally kept all supervisors out of the loop of daily activity because planning information given to supervisors becomes public and airport opponents immediately seize on it. Such suspicion on either side reflects the current atmosphere in Orange County. "There is just no dialogue," said Tom Edwards, chairman of the El Toro Airport Citizens Advisory Commission. Contacts: Tom Wilson, Orange County supervisor, (714) 834-3550. Charles Smith, Orange County supervisor, (714) 834-3110. Tom Edwards, El Toro Airport Citizens Advisory Committee chairman, (714) 871-1132. Dana Smith, Orange County LAFCO executive officer, (714) 834-2556.

A landowner may sue the City of Huntington Beach for a temporary taking because of city delays in adopting a Local Coastal Plan and zoning for the property, the Fourth District Court of Appeals has ruled. The city argued that the takings claim of the Mills Land & Water Company was not ripe because Mills never sought a final determination regarding the permissible type and intensity of development. But the appellate court ruled that " he city had an obligation to get its LCP in place within a reasonable time so that Mills could ascertain what potential permitted uses the city would allow." The city took nearly 20 years to complete an LCP acceptable to the California Coastal Commission. The unanimous, three-judge appellate panel overturned the decision of Orange County Superior Court Gary Ryan — who had sustained three demurrers filed by the city — and remanded the case for trial. "Whether Mills's conduct in not taking further steps to force the zoning issues to a final conclusion with the City was reasonable is a factual issue which cannot be resolved on demurrer," wrote Orange County Superior Court Judge Tully Seymour, sitting by assignment to the appellate bench. "Similarly, determining whether the city's delay in processing and adopting its LCP was justified requires an evidentiary record." The case is significant because it appears to open the door to lawsuits from thousands of other landowners in areas that still do not have LCPs, said Mark Rutter, the city's lawyer. About 30% of coastal sections do not have LCPs, even though the Coastal Act required their submission in 1981. The city and Attorney General Bill Lockyer have asked for a rehearing before the full appellate court panel. In the early 1900s, Mills Land & Water purchased 51 undeveloped acres. The land, which lies in a coastal zone, is on the inland side of the Pacific Coast Highway, across from Huntington Beach State Park. In 1965, the state acquired 28 acres from Mills for a freeway. But when the state abandoned its freeway plans, it granted Mills an option to reacquire the property. In 1978, Mills applied to the city for a general plan amendment to allow residential and commercial development. More than a year later, the city denied Mills's application, citing the need to complete a Land Use Plan for the city's coastal section. In following years, the city and Coastal Commission argued over proper use of the Mills land, with the Coastal Commission citing a Department of Fish & Game recommendation that the site be restored as wetlands. By November of 1982, the commission had certified the LUP with the exception of the 51 acres, which became known as the "White Hole." The city then waited until 1986 to adopt a revised LUP that included the White Hole. The plan designated seven acres of the Caltrans parcel for visitor-serving commercial uses, and the other 44 acres for conservation. The Coastal Commission approved this plan in October 1986. But then the city had to change its zoning for the White Hole to reflect the LUP. It was not until April 1990 that the city sent its proposed zoning changes for the While Hole to the Coastal Commission for certification. In the meantime, Mills applied for approval of a light-industrial office project on its 23 acres in July of 1989. The city, however, refused to process the application, saying Mills needed to obtain an amendment to the LUP, which designated the site for conservation. In May of 1992, the Coastal Commission approved the city's zoning change but added a "conservation overlay." The upshot was to designate seven acres of the Caltrans parcel for visitor-commercial development in exchange for protecting the other 44 acres. However, that zoning never became effective because the city did not act on the Coastal Commission's suggested modification within the six-month statutory deadline. Instead, the city waited two years to adopt the zoning proposed by the Commission and to seek the commission's certification. Mills filed its first lawsuit challenging the zoning in December of 1994, while the Coastal Commission was considering the latest submittal from the city. By April of 1996, the city adopted zoning consistent with the Coastal Commission's modifications, ending the long conflict between the city and the commission. The enactment of the zoning mooted Mills's challenge to the validity of the earlier zoning, according to the appellate court. The only issue left was whether Mills was entitled to damages for an unreasonable delay in establishing the zoning — a temporary taking. The city argued that no taking occurred because the city never gave a final rejection to Mills's development plans. But the appellate court said that that argument "is irrelevant given the nature of Mills's claim that the failure of the City to adopt zoning regulations within a reasonable time under which it could submit a meaningful development application constituted a taking." A similar issue arose in Healing v. California Coastal Commission, (194) 22 Cal.App.4th 1158, in which a landowner who wanted to build a house was stuck while Los Angeles County slowly completed a Local Coastal Plan acceptable to the Coastal Commission. "As in Healing, here the City cannot rely on its failure to adopt its LIP (Local Implementation Plan) and attendant zoning to claim Mills's claim is not ripe," wrote Seymour, a former Newport Beach city attorney. The court also suggested that Mills qualified for the "futility exception" to the ripeness doctrine. That narrowly construed exception relieves developers from submitting multiple applications when it is clear the government will approve none of them. The court cited Milagra Ridge Partners, Ltd., v. City of Pacifica (1998) 62 Cal.App.4th, 108. Mills alleged that city planners in 1988 said it would be futile for the landowner to try to change the conservation designation or to apply for permits to develop that portion of the property. The Case: Mills Land & Water Company v. City of Huntington Beach, No. G020490, 99 C.D.O.S. 8005, 1999 Daily Journal D.A.R. 10151, filed September 27, 1999. The Lawyers: For Mills: Arthur Cook and Dean Dennis, Hill, Farrar & Burrill, (213) 620-0460. For Huntington Beach: Mark Rutter, Moore, Rutter & Evans (562) 435-4499.

Delays in constructing roads and utilities funded by Mello-Roos bonds do not absolve property owners of paying Mello-Roos assessments, the Fourth District Court of Appeals ruled in a recently published opinion. In a case from Riverside County, the unanimous three-judge panel found that property owners have an obligation to bondholders that is independent of any dispute over how bond proceeds are used. The County created Community Facilities District 88-8 under the Mello-Roos Community Facilities Act of 1982 (Gov. Code §53311 et seq.). The CFD covered a slice of land along the west side of Interstate 215 north of Perris. More than two-thirds of landowners within the CFD voted to authorize the county's proposed sale of Mello-Roos bonds to fund roads and utilities to encourage industrial development. Improvements were scheduled to be finished by April 1992, but various problems delayed completion until mid-1996. John and Barbara Harvill, owners of 12 parcels within the CFD, defaulted on payment of special taxes related to the Mello-Roos bonds for the 1994-95 tax year. The CFD then foreclosed on behalf of bondholders. The Harvills did not dispute the unpaid taxes. Instead, they contended that the special election authorizing the bond sale created a contractual relationship between them and the CFD, and that the CFD failed to live up to that contract. San Diego Superior Court Judge Herbert Hoffman issued summary judgement for the CFD, and the appellate court affirmed the decision. "Harvills' claim CDF failed to perform contractual obligations, thereby excusing nonpayment of special taxes, is not a defense to this type of action," wrote San Diego Superior Court Judge E. Mac Amos, sitting on assignment to the Fourth District, Division One. The CFD brought the foreclosure action on behalf of bondholders, and the Harvills provided "no evidence bondholders had any obligation to them related to construction of the improvements by CFD or County," Amos wrote. Even if a contract exists between the Harvills and the CFD, bondholders are not party to it. "We further note that as a matter of public policy, a municipal bondholder's right to repayment cannot be frustrated by disputes between the issuing entity and the property owners regarding the use of bond proceeds," Amos continued. The court rejected the Harvills' argument that special taxes are invalid because of alleged construction irregularities. "Where, as here, it is undisputed Harvills' special taxes remain unpaid, the court cannot prevent or enjoin the collection of those taxes," Amos wrote. The appellate court also upheld the trial court's award of attorneys' fees to the county, and ordered the Harvills to pay attorneys' costs on the appeal. The Case: Community Facilities District No. 88-8 v. John Harvill, Nos. D029328, D029926, 99 C.D.O.S. 7309, 1999 Daily Journal D.A.R. 9303, filed August 6, 1999, modified and ordered published September 2, 1999. The Lawyers: For CFD 88-8: Susan Feller, Sherman & Feller, (510) 452-3222. For Harvill: Henry Heater, Endeman, Lincoln, Turek & Heater (619) 544-0123

Two lawsuits Attorney General Bill Lockyer filed against Tulare County regarding approval of giant dairies have been settled. The county agreed to add an animal waste management element to its general plan and to complete a program EIR by the end of the year. Under terms of a settlement reached in August, the Airosa Diary agreed to suspend its 3,600-cow expansion of a dairy near Pixley until the county completes the EIR and reviews the expansion. An October settlement of a second lawsuit places the same conditions on the Jongsma family, which received county approval for a 3,200-cow dairy near Earlimart earlier this year. Lockyer filed the lawsuits because he contended Tulare County was not performing adequate environmental review of dairy proposals, which the county was approving based on mitigated negative declarations. (See CP&DR Local Watch, July 1999.) Tulare County is the number one dairy county in the nation, with more than 300,000 cows and about 20 applications for new or expanded facilities. "This settlement is a good blueprint for addressing environmental review of diary projects," Lockyer said in a written statement. Lockyer, environmentalists and anti-poverty advocates fear that runoff from the giant dairies can pollute surface water and groundwater.

Architects and planners like to think they are building "for the ages." Recent experience, however, suggests the very opposite. The culture, the economy and fashions in urban design all appear to be in a rapid state of change. Perhaps the Internet and advances in telecommunications are shortening the half-life of cultural events. Perhaps we're just getting older and the world seems to be getting faster. Notwithstanding, buildings that exemplified urban life only 20 years ago are rapidly becoming obsolete. The ability, therefore, to recycle these buildings becomes important indeed if downtown areas are not to become elephants' graveyards. That's why the Paseo Pasadena project, a make-over of the old Plaza Pasadena shopping center in downtown Pasadena, may have importance far beyond the city boundaries. Built in 1980, this three-block shopping center was one of many across the country that promised to bring retail trade back downtown. Plaza Pasadena tried to be a good urban citizen, and the mall had some forward-looking features for a project of its time. The shopping center more or less conformed to the existing street grid, even if the two-story, 700,000-square-foot mall was a three-block-long pancake. Plaza Pasadena made a gesture toward pedestrians by providing a grand entrance off Colorado Boulevard, the city's most important commercial street (even though most shoppers quietly entered and exited at the rear of the property, in their cars.) Those gestures aside, Plaza Pasadena was a dog. Beyond a weak tenant mix and mediocre sales, the mall was architecturally boring, lining Colorado Boulevard with acres of blank walls of tan-colored brick. Surrounded by Pasadena's extraordinary collection of Classical-style buildings, mostly dating from the era of the City Beautiful movement, the vacuity of Plaza Pasadena was an enduring insult — the bore at the party who would not stop talking amid a crowd of brilliant guests. Retail did, in fact, return to downtown Pasadena in the form of Old Pasadena, a redevelopment project that created retail venues and movie theaters out of neglected older buildings on Colorado Boulevard, a few blocks from Plaza Pasadena. Few cities have provided a more dramatic example of the latent power of pedestrian-oriented retail districts. Old Pasadena apparently answered some unmet demand for pedestrian-oriented nightlife; the district has been jammed for the 10 years since it opened, while Plaza Pasadena lay like a beached whale, slowly dying of some mysterious toxin. The initiative to reinvent Plaza Pasadena came from its owner, TrizecHahn Corporation, a descendant of The Hahn Company, which built the mall. As one of the nation's largest developers of retail malls, TrizecHahn knew something was not working. Unlike most mall developers, which stick religiously to tried-and-true formulas, TrizecHahn has shown itself willing to take on non-traditional projects in urban settings. The Hollywood & Highland project — an unusual Hollywood retail and entertainment project with a Metro stop — is a case in point. (See CP&DR Places, July 1998.) Remarkably, this main-line mall developer came up with the idea of rejiggering the moribund Plaza Pasadena into an entertainment center, with retail, office and — in the tour-de-force of the project — 400 loft-style apartments above the retail space. The regional mall was to become an urban village. The commitment to housing is more than skin deep: in a total building program of just over 1 million square feet, 369,000 square feet are devoted to the apartments, while 478,826 square feet are given to the new multiplex and retail construction. The existing Macy's is 159,000 square feet. Making this mixed-use program work in the envelope of the retail pancake called for some bold strokes. Essentially, the strategy was almost to turn the mall inside out: nearly all mall merchants would have their own streetfronts. Instead of the internalized megastructure of the traditional mall, the Paseo project removed major parts of the mall to form three, freestanding buildings, which look like eight separate buildings. Of equal importance was the creation of pedestrian space in and around the mall. The new mall does not restore the grid to its pre-1980 form; the project still covers three city blocks. Yet the project does restore at least one of the goals of Pasadena's City Beautiful plan of 1915, prepared by architect Robert Bennett. By opening up a 70-foot-wide pedestrian walkway at Garfield Avenue, the architects at Ehrenkrantz, Eckstut & Kuhn Associates restored the view of the Pasadena City Auditorium from City Hall, three blocks north. This simple gesture goes miles in integrating the project part into the larger civic whole. An obvious difficulty with opening up the mall is what happens in the center of the block; here the architects have created a new pedestrian allee with a fountain court that the architects believe will echo a similar fountain courtyard at Pasadena City Hall. While the architecture and planning of the project are well out of the ordinary, the commercial decisions about the Paseo are equally non-formulaic. In its negotiations with the developers during the entitlement process, Pasadena city officials stressed that they did not want the new project to cannibalize merchants from the city's two other established commercial centers, Old Pasadena and Lake Street. The tenant mix, therefore, is not the usual shortlist of mall chain stores. With the exception of a Macy's outlet store (Macy's refused a buyout of its lease) the majority of tenants in Paseo Pasadena are local merchants, and the uses tend toward the neighborhood-serving variety of retail: a hardware store, an upscale grocery store, restaurants, and the like. At first glance, a preference for local merchants seems counter-intuitive for a multi-billion-dollar developer like TrizecHahn. Yet TrizecHahn claims to have pre-leased nearly 70% of the Paseo before construction has begun; lenders typically ask for 50% pre-leasing to finance mall construction. The happiest part of the project, in urban design terms, is that the Paseo Pasadena may achieve what Plaza Pasadena tried, and failed, to achieve for years: To create a link to the intense pedestrian activity at Old Pasadena. Thus, a missing piece of the puzzle of downtown Pasadena has been restored, and the city that was envisioned in 1915 may finally start coming into focus. Beyond Pasadena, the experience of turning a mall inside-out may be an important piece of research-and-development for TrizecHahn, which could conceivably create a new profit center in converting 1970's malls that don't work into urban villages that do. What remains remarkable to me is that a major mall developer was willing to undertake this project. Such a radical departure from standard practice needed a big developer with TrizecHahn's depth and credibility. If a community-based nonprofit organization had attempted the same project, Paseo may not have been taken seriously. Just as it took a conservative president like Nixon to re-establish diplomatic relations with Communist China, it may have taken a shopping-mall stalwart like TrizecHahn to find a new rapprochement between the retail industry and Main Street. Who knows? Maybe it will last longer than 20 years.

The Fourth District Court of Appeal has sided with the County of Los Angeles in its tug of war with the City of Long Beach over the setting of base year property values in a redevelopment area. The court concluded that the tax assessment role in place when Long Beach approved the redevelopment plan contained the base year property values. The court rejected Long Beach's argument that the base year values should reflect the lowering of some property values by the county's own Assessment Appeals Board. At issue in this case was how to assign base year property values. The city wanted property values to be as low as possible so that future increases would return to the city's redevelopment agency as "tax increment." The county wanted base-year values to be as high as possible to protect its revenue stream. The city — pursuant to special state legislation in the wake of the 1992 Los Angeles riots — created a redevelopment area for parts of Long Beach and Signal Hill on September 21, 1993. After adopting the redevelopment plan, the city asked the county to reduce base-year values for certain properties to reflect resolved assessment appeals. A number of property owners had convinced the county to reduce their original 1993-94 tax year assessments. The county refused, so the city sued. San Bernardino County Superior Court Judge Stanley Hodge sided with the city and ordered the county to lower its base year tax rolls to reflect decisions of the Assessment Appeals Board. But the Fourth District, Division Two, reversed Hodge's decision. "The crux of the problem here is the determination of the assessment roll ‘last equalized' before the redevelopment plan was adopted," Justice James Ward wrote for the unanimous three-judge panel. No previous published cases were on point, but Ward cited a 1971 Attorney General's opinion, 56 Ops. Cal.Atty.Gen. 184 (1973), interpreting Revenue and Taxation Code §2050 et seq. The code requires the assessor to submit the last equalized roll on August 20 of each year. The attorney general concluded that "the roll in existence on the August date is the last equalized roll and continues as such … ." Long Beach argued that the tax roll issued in August of 1993 was not the final equalized roll because the county later made changes. The city essentially argued that the August 1993 roll was only a temporary roll, not a final one. But the appellate court rejected this notion. The court said the city was adding the term "final," which does not appear in the statutes. Furthermore, if the city did insist that the August 1993 roll was "temporary," then the city should accept as "final" the 1992-93 assessment roll, the court said. The city did not make that argument, though. "To apply the 1992-93 ‘final' roll would be contrary to the Attorney General's opinion, which did address the question of whether the previous year's final roll or the current year's August roll should be used," Justice Ward wrote. Furthermore, the "final" adjusted roll for 1993-94 did not come into existence until long after the city approved the redevelopment plan, the court said. "Had the City of Long Beach wished the tax increment allocation to be based upon a final ‘last equalized assessment roll,' it could have adopted the redevelopment plan ordinance at such a time as it became effective at least three days after the assessment appeals board adjourned for the year, so as to incorporate the final assessment values for that year into the allocation formula," Ward wrote. The Case: Redevelopment Agency of the City of Long Beach v. County of Los Angeles, No. E021721, 99 C.D.O.S. 7900, 1999 Daily Journal D.A.R. 9987, filed September 22, 1999. The Lawyers: For Long Beach: Robert Shannon, city attorney, (562) 570-2205. For Los Angeles County: Thomas Tyrrell, principal deputy county counsel, (213) 974-1880.

Although it may not receive as much attention as high-tech powerhouses such as San Jose, Santa Clara and Mountain View, Fremont has attracted numerous small and medium-sized technology companies in recent years. Now, Fremont — in southern Alameda County about 12 miles north of downtown San Jose — is poised to become an even bigger player. Catellus Development Corporation has received nearly all the government approvals necessary for 8.25 million square feet of commercial development in a 325-acre technology-based business park. Catellus's Pacific Commons — between Interstate 880 and San Francisco Bay — is among the largest of its type in the Bay Area. Fremont city officials, who have supported the latest versions of the project, believe 20,000 to 30,000 people could work at Pacific Commons businesses at full build-out, depending upon who locates in the park. "This is where the action will be over the next 20 years," said Dan Marks, Fremont planning manager. "No one else (in the Bay Area) has this amount of land available." That may be an exaggeration, especially as Cisco Systems considers a 400-acre campus in South San Jose's Coyote Valley. Still, Pacific Commons is important to the East Bay and Silicon Valley. The project means that Fremont (population 204,000) likely will add jobs at an even faster rate than projected by the Association of Bay Area Governments. Fremont employment already was expected to grow from 71,500 jobs in 1995 to 84,600 in 2000, then to 118,000 in 2020, according to ABAG. Development plans for the 840-acre site have been around since the 1970s. Earlier proposals called for residential development, which proved controversial because the area is in the city's "industrial heartland," according to Marks. In 1996, the city approved a development agreement and site plans that called for 8.25 million square feet of industrial space, big-box retail development, and homes. However, in the process of receiving a wetlands permit from the U.S. Army Corps of Engineers, Catellus lost nearly half of its planned development footprint to wetlands and habitat mitigation. The latest version of the project contains only the industrial development, Marks said. Catellus still must receive city approval for a revised development agreement and new site plans. The city has yet to determine what level of review is necessary under the California Environmental Quality Act, Marks said. The earlier version of the project was subjected to an EIR. Because of wetlands restrictions, buildings will assume a more vertical nature, with structures up to eight stories tall, said Don Little, a Catellus senior vice president. But Marks indicated taller buildings could be just fine. The city has encouraged a design that incorporates a major transit spine, and bus- and pedestrian-friendly features. Shuttles will connect with area BART stations. A commuter train runs along the western edge of the site, and the city might pursue a train station, Marks said. Buses would take workers from the train station to their offices. "We're trying to design something that is different from campus business parks of the past, which were designed as a number of isolated projects," he said. The city, which has a joint marketing agreement with Catellus, wants Pacific Commons to have a sense of place, said Rosie Rios, the city's economic development manager. This is especially important because the site is across the freeway from the other, more established, part of town. Sidewalks and trails will link three "activity centers" that offer workers retail shopping and parks. The city has encouraged the Pacific Commons project because city leaders want a bigger slice of the silicon pie. Fremont has seen some campus-style development and the opening of new headquarters, but it wants more. "R and D development is encouraged by any city that I know of because of the level of jobs involved," Rios said. Semiconductor, telecommunications and biotechnology and the three strongest segments of the high-tech world in Fremont, Rios said. According to the city's Economic Profile, Lam Research Corporation, Seagate Magnetics, and HMT Technology Corporation employ more than 2,000 workers apiece, making them the second, third and fourth largest private employers in town. The New United Motors Manufacturing plant, with 5,500 workers, remains Fremont's biggest employer, but the economy of Fremont and other East Bay cities is changing. A report by San Francisco business consultant McKinsey & Co. said the economy of cities in Alameda and Contra Costa counties has shifted from one based on heavy manufacturing, defense-related work and finance to one based on information and services. Little expects telecommunications, software and networking companies to become Pacific Commons tenants. "That's the tenant community that needs and wants the space," he said. "There is such an acute scarcity of land available in that marketplace." Warehousing and heavy manufacturing are not planned, he added. Although they have not provided financial incentives, Fremont leaders did make the city a co-applicant with Catellus for a Clean Water Act §404 permit from the Army Corps of Engineers. The Corps finalized that permit in early September, removing the last major hurdle in the governmental process. The federal Environmental Protection Agency has said it will not challenge the project. The Corps permit allows Catellus to fill 47 acres of wetlands along the edge of San Francisco Bay and to encase about a mile and a half of a flood control canal. In exchange, Catellus must set aside 390 acres for a nature preserve, which will provide habitat for the tiger salamander, vernal pool tadpole shrimp and the Contra Costa goldfields, a flower. The state lists the salamander as an endangered species, while the shrimp and goldfields enjoy federally protected status. Additionally, Catellus must create 77 acres of on-site and off-site wetlands. Catellus also must avoid 59 acres of existing wetlands. Doug Makitton, a corps spokesman, said the agency has permitted very few projects of this magnitude in San Francisco Bay. "This one has gone through a number of changes in the last three or four years to get to this point. Anything in and around the Bay takes careful planning and a lot of negotiations," he said. "The key point is that it is a net gain (of wetlands)." Marks, the city's planner, said Catellus has cooperated a great deal to expedite the 404 process. The three-year review was brief considering the project's scope, he said. Catellus would like to begin infrastructure construction in summer of 2000. Marks is not ready to commit to a time frame but said the city will complete its reviews as quickly as possible. The development agreement runs through 2014, although Little thinks Pacific Commons could build out a few years before that date. Besides getting a major new job site, the city also will get an expensive extension of Cushing Parkway. Cushing is an arterial that will link Pacific Commons with other industrial areas. The extension is expensive because portions must be raised above sensitive habitat. Contacts: Don Little, Catellus senior vice president for Northwest development, (415) 974-4500. Dan Marks, Fremont planning manager, (510) 494-4515. Rosie Rios, Fremont economic development manager, (510) 494-4804. Doug Makitton, Army Corps of Engineers public affairs officer, (415) 977-8658.

Valery Pilmer, a former San Bernardino County land use services director, pleaded no contest to a misdemeanor charge of stealing a public document. Under the plea agreement with the county district attorney's office, Pilmer was sentenced to 300 hours of community service and retired from county employment effective October 15. Pilmer was indicted earlier this year on four felony counts relating to hiding, altering or destroying public records and lying about it in a sworn statement. The charges stem from the district attorney's long-running investigation of Rail-Cycle, a proposed Mojave Desert landfill. (See CP&DR, March 1999, December 1997, October 1997) Pilmer's attorney, Dennis Kottmeier, told the San Bernardino Sun that Pilmer did nothing wrong and that she accepted the plea agreement simply to get the matter behind her. Pilmer had been on administrative leave since the indictment. Meanwhile, the Rail-Cycle case — which allegedly involved fraud, wiretapping, burglary and other illegalities in an attempt to win approval for and open the landfill — appears to have bogged down. Some or all charges have been dismissed against four employees of project proponent Waste Management and a contract county worker. Also, a Superior Court judge ruled that prosecutors allowed their key witness to lie to a grand jury.

A six-year dispute between Shasta County and the new City of Shasta Lake regarding tax revenue has been decided in favor of the city. The Third District Court of Appeals upheld nearly all aspects of a ruling issued during binding arbitration by retired Siskiyou County Superior Court Judge James Kleaver. The appellate court said the city, which incorporated on July 2, 1993, has the right to receive Proposition 172 sales tax revenue and that the Proposition 172 revenue should offset the amount the county charges for providing law enforcement services. The appellate court — in an unpublished part of the opinion — overturned Kleaver only on the matter of whether the city owed the county interest on a portion of payments in dispute. The decision means the county must pay the poor city of 9,300 residents about $1 million. The appellate court decision, penned by Acting Presiding Justice Coleman Blease, came on a 2-1 vote. Justice George Nicholson said the court should dismiss the appeal because the court did not have jurisdiction to review a decision made in binding arbitration. Prior to incorporation, the Shasta County Local Agency Formation Commission performed a fiscal analysis that determined the proposed incorporation would result in a net gain for the county general fund of about $200,000 annually. Still, the county pressed LAFCO to reconsider the conditions of incorporation. The result was a mitigation agreement between the county and the city's predecessor, the Shasta Dam Area Public Utilities District. Almost immediately, the county and city began disputing the terms and conditions of the mitigation agreement. They stipulated to binding arbitration before retired Judge Kleaver. He ruled that revenues from Proposition 172 — a half-cent sales tax approved after the state had shifted property taxes from counties and cities to schools — should be treated as property tax revenue under terms of the agreement and they should offset a portion of the county's cost of providing sheriff's services to the new city. On appeal, the county argued that the mitigation agreement referred only to actual property taxes, not to property taxes plus replacement revenues, such as Proposition 172 sales taxes. But the court said money is money. "The court must determine whether the measure of the payment is the amount of property taxes which the County retains, as the County contends, or the amount of property tax benefit which the County receives, i.e., the property tax retained by the County plus replacement revenue given in lieu of property tax diverted by the state," Justice Blease wrote. "Since the declared purpose of the payment is to mitigate the so-called negative effect occasioned by property tax losses resulting from the incorporation, the City's candidate is the more reasonable. There is no incremental negative fiscal effect on the County attributable to the diversion of property tax revenue by the State to the extent that it receives either property taxes or replacement revenues." As for payment for law enforcement services, the court interpreted a law enforcement services agreement (LEA) between the city and county. The county argued that the agreement allowed the county to charge the city for the "entire cost" of sheriff's services within the city limits for the 1993-94 fiscal year, the city's first year of existence. The city contended it should be credited for revenues generated from inside the city limits but retained by the county, including Proposition 172 funds. The court determined that under the LEA the county could charge the entire cost of services only if the city had requested that the county discontinue the service. The city did not make that request, the court said. The court also ruled that the phrase "entire cost" in the LEA means the same thing as "net cost" under Govt. Code §57384, which addresses the subject of county services to a new city, the court said. The court also interpreted that section to say that the city should receive credit for Proposition 172 funds. "Such revenues were ‘generated' in the formerly unincorporated territory, even though the allocation of Proposition 172 revenues is not situs-based," Justice Blease wrote. "Proposition 172 revenues are allocated to cities according to the amount of property tax revenue diverted to ERAF. (§30054.) This is a calculable amount, and is an amount ‘generated' by the City." The Case: City of Shasta Lake v. County Shasta, No. C029036, 99 C.D.O.S. 7859, 1999 Daily Journal D.A.R. 9954, filed September 12, 1999. The Lawyers: For Shasta Lake: John Kenny, Moss & Enochian, (530) 225-8990. For Shasta County: Michael F. Dean, Kronick, Moskovitz, Tiedemann & Girard, (916) 321-4500.