When a public agency acquires a property via eminent domain, only a trial court judge -- and not a jury -- can decide whether a business should receive compensation for loss of goodwill, a state appellate court has ruled. The ruling came in a case involving the Emeryville Redevelopment Agency. The First District Court of Appeal ruled that the trial court got a number of things wrong -- including allowing improper evidence -- but that the lower court was right to prevent the jury from hearing arguments about the loss of goodwill. In the end, the appellate court threw out a $12.5 million award to the landowner and sent the case back to the trial court. "This is a significant victory for condemning agencies in that it will send a strong message to trial courts that they should not defer issues other than valuation to a jury," Emeryville attorney Tom Douvan, of McDonough, Holland & Allen, told the Los Angeles Daily Journal. Even before this lawsuit was initiated, the 13-acre site in question had a long history. American Indians had created a huge mound of sea shells reaching at least 40 feet in height. During the late 1800s, the land was used for an amusement park known as Shellmound Park. During the 1920s, the mound was leveled and an industrial development was built. In 1987, the city included the site in a 270-acre redevelopment project. In 1998, the redevelopment agency filed an eminent domain lawsuit against Harcros Pigments Inc. (later Elementis Pigments Inc.) to acquire the 13 acres. The city wanted the property to accommodate a mixed-use commercial development. The city offered $6 million, but a jury eventually ordered the city to pay $12.5 million, minus costs for cleaning up contaminated soil. Both the city and Elementis filed appeals of different parts of the decision. Elementis argued that Alameda County Superior Court Judge Ronald Sabraw improperly withheld from the jury evidence concerning loss of goodwill. Elementis cited several cases in which the issue of entitlement to compensation for lost goodwill was submitted to the jury. But the unanimous three-judge panel of the First District ruled that the cases Elementis cited were not the same as the current one. Citing Code of Civil Procedure section 1263.510 (a), the court held that when a dispute exists about compensation for lost goodwill, a judge must first rule on that dispute. If the court rules that there has been a loss of goodwill, only then can the issue of valuing that goodwill go to the jury, the First District ruled. " he general rule in eminent domain actions is that ‘the right to a jury trial … goes only to the amount of compensation,'" Justice Patricia Sepulveda wrote for the court, citing Redevelopment Agency v. Contra Costa Theatre, Inc., (1982) 135 Ca.App.3d, 73. "‘All other questions of fact, or mixed fact and law, are to be tried … without reference to a jury.'" The city argued that Judge Sabraw allowed the jury to consider evidence not properly before the jury. The appellate panel agreed. It ruled that Judge Sabraw made several mistakes that prejudiced the jury too much for the jury's decision to stand. Sabraw wrongly allowed the jury to consider the amount the city has paid for other properties in the area, and Sabraw let the jury consider what project the city had proposed for the site. In eminent domain cases such as this one, the appellate court ruled, Evidence Code section 822 excludes information regarding "acquisitions for public use." One case cited by Elementis, City and County of San Francisco v. Golden Gate Heights Investments, (1993) 14 Cal.App.4th, appears to allow the jury to consider the price paid by a public agency for other pieces of property. But the First District declined to follow the Golden Gate case and pointed to a recent amendment by the Legislature that said the Golden Gate court has "misconstrued" the evidence rule. As for evidence regarding the city's proposed use of the site, such information must not be considered by the jury, the court ruled. " vidence of specific project plans is inadmissible in the absence of specific facts or points of contention which demonstrably enhance the probative value of the evidence to a point where it outweighs the inherent potential for prejudice," Sepulveda wrote. The Case: Emeryville Redevelopment Agency v. Harcros Pigments, Inc., Nos. A090932, A091716, A093126, 02 C.D.O.S. 8255, 2002 DJDAR 10329. Filed August 9, 2002. Ordered published September 6, 2002. The Lawyers: For Emeryville: Natalie West, McDonough, Holland & Allen, (510) 273-8780. For Harcros: James Berg, Berg & Parker, (415) 397- 6000.

Can we Californians do a better job of getting centered? This is not a metaphysical question. Increasingly, it is a practical concern. As California moves into the post-suburban era, the question of how to grow is moving beyond a fight about growth and density as abstract statistics to a more fine-grained discussion about how to create more dense and compact . In October, Smart Growth America, an advocacy group, ranked the nation's largest metropolitan areas on four different factors. The study found that California metros ranged from the most sprawling (Riverside) to one of the most dense (San Francisco). In general, the California metros came out on the middle. But what is interesting is not the California metros ranked, but . In three categories — density, a mix of uses in close proximity to one another, and connected street systems — virtually all California metros fared well. Where our state fell down was in what the researchers called "centeredness" — the strength of downtowns and other concentrated activity nodes. All this makes sense. California building practices, along with high land and infrastructure costs, have encouraged density. Connected street systems and a mix of uses in close (automobile) proximity to one another were hallmarks of good suburban-era land use planning. But our system and decision-makers did not value "centeredness." Ironically, at the same time that the Smart Growth America report highlighted the "centeredness" question, Californians were engaged in an intense debate over this very subject. That debate indicates that when it comes to centeredness, we Californians are nothing if not conflicted. The day before it was released, a critical part of the widely hailed "City of Villages" program was killed by San Diego Mayor Dick Murphy. Yet even Murphy acknowledged the need for many of the plan's approaches (see , August 2002). On the same day that the Smart Growth America report was issued, the Association of Bay Area Governments (ABAG) unrolled the final report of the "Smart Growth Strategy Regional Livability Footprint." ABAG's proposed strategy is a variation on the "network of neighborhoods" alternative that the organization previously proposed, but the latest plan was unveiled to a somewhat less-than-overwhelming response. The San Diego situation was a little surprising considering how far into the process the City of Villages plan got. But, perhaps from a political standpoint, the mayor's departure was not too unexpected. The San Diego planning effort emerged from the planning department's recent estimate that if the 1979 General Plan were built out, the city would fall at least 17,000 units — and perhaps 37,000 units — short of the total number required to accommodate growth in the city by 2020. The proposed solution called for a strengthening of neighborhoods, especially those that accommodate higher-density housing, by creatively deploying public infrastructure. One of the problems, of course, was the sheer cost of necessary public facilities, which was more than $2 billion. Instead of moving City of Villages forward whole-hog, Mayor Murphy sent a memo to the San Diego City Council arguing that lower population forecasts obviated the need for many of the high-density housing strategies the plan contained. Because the San Diego Association of Governments lowered its 2020 and 2030 population forecasts, Murphy says the higher-density housing strategies are now unnecessary. "We do not support increased housing densities over the objections of communities," he wrote in a memo co-signed by councilmembers Toni Atkins and Scott Peters. Meanwhile, the regional smart growth strategy unveiled at the ABAG General Assembly was the result of a lengthy regional visioning exercise, which elicited criticism from a few local governments in the region. Beginning with the nine-county region's general plan buildout, ABAG constructed three alternative future scenarios: • The "central cities" scenario, which "hearkens back to an earlier era" and concentrates growth in dense cities; • The "network of neighborhoods" proposal, which would redevelop central cities less densely and spread most growth along transportation corridors; • The "smarter suburbs" alternative, which would permit considerable greenfield development, but would encourage more compact growth and a mix of uses in relatively low-density suburbs. The final vision proposed by ABAG is similar to the middle, "network of neighborhoods" proposal. The preferred vision would consume far less land than the buildout of the existing general plans. According to ABAG, the current Bay Area urbanized footprint is 752,000 acres. The buildout scenario would add 83,000 more acres to this footprint by 2020, an increase of 11%. And because this still would not provide enough housing for the region, ABAG estimated that 45,000 acres in surrounding counties would be urbanized to accommodate Bay Area economic growth. By contrast, ABAG estimated that the preferred vision would add only 15,600 acres of urbanized land, an increase of 2%, most of it in Solano and Contra Costa Counties. By focusing growth in existing urban areas, it would accommodate all of the region's projected housing need in a much tighter area. The 80 or so elected officials who gathered at the ABAG General Assembly for the rollout appeared resigned to the idea that the region must do something differently. But they were not very enthusiastic. "No one is under the assumption that this will be easy, and it won't be done without major pain and opposition from some," Contra Costa County Supervisor John Gioia said. The strategy also went out of its way to point out that major legislative help would be required from Sacramento, especially in altering fiscal incentives to local governments and in streamlining the California Environmental Quality Act to make it easier to intensify urban land uses. At the same time, a number of local governments from around the Bay complained to ABAG that the process had "blue-skied" the future at sub-regional workshops without taking their existing general plans into account. So it will not be smooth sailing for the ABAG regional strategy. Even ABAG President Gwen Regalia acknowledged that "the numbers" would have to be fleshed out later in negotiations with local governments. So it is possible that the network of neighborhoods, like the City of Villages, will be watered down in the interest of political feasibility. The end result might be a baby step toward more centeredness in California — even if we remain pretty conflicted about the whole thing.

If something becomes famous, the painter Georges Braque once said, it is usually famous for the wrong reason. City Heights Urban Village in San Diego is famous for being the beneficiary of local businessman Sol Price, who has donated about $50 million in various forms through his charities and business affiliates. While that money has made a big difference to this impoverished neighborhood near downtown San Diego, City Heights should be equally famous for the way that a group of Price-funded entities and public agencies has spent the money on projects that benefit the community as much as developers and City Hall. It might sound like an exaggeration, but City Heights is an experiment in community building that Price has called "holistic." Here, the needs of the community, rather than the need to generate tax increment, take precedence: Since 1994, when Price and his many partners started working with the city's redevelopment agency, the area has received a library, a swimming pool and a community service center that provides welfare-to-work support. San Diego Community College District is operating the Mid-City Community Education Center, which offers courses in adult literacy, English and job training. Price Charities has provided $18 million to improve programs in the existing elementary, middle and high schools, and San Diego Revitalization, another Price-related group, is planning a 32-acre model school and housing development. The $19 million Metro Career Training Center is expected to open in 2003, and in July, construction started on the $18 million regional transportation center. "All the social elements were addressed before the business-commercial elements were developed as the capstone of the whole process," said Robert Turner, an affordable-housing consultant who formerly headed the San Diego office of Local Initiatives Support Coalition. Originally a street-car suburb built during the 1920s, City Heights has become San Diego's "port of entry" community. Newly immigrated Somalis, Ethiopians, Central Americans and Vietnamese join longtime African-American and Anglo residents. More than 30 different languages are spoken in City Heights. With more than 72,000 people, the district is one of the densest in San Diego. A third of the households live below the poverty line. Not surprisingly, the crime rate is higher than the city average. Crime, gang activity and graffiti were particularly bad in 1990, when the city designated City Heights as an "emergency area." The city adopted a redevelopment plan for the area in the following year. In 1994, the area suffered another setback when the local Vons closed, depriving the neighborhood of a modern supermarket. Price, who founded the discount chain Price Club (it later merged with Costco), was toying with the idea of creating a chain of stores to serve low-income residents, and City Heights was one of his targets. With former San Diego City Councilman William Jones, Price created a development company, CityLink Investments, for the purpose. In the course of studying City Heights and conducting community meetings, Price underwent a sort of conversion. He did not stop believing in the value of retail development, but he saw the value of a complete community makeover. Turner said City Heights had a number of plusses that made it an attractive target for redevelopment: The density of the area meant there would be a ready audience for social services and new public facilities like the library and the job-training centers. Furthermore, comparatively few properties were abandoned, which meant that developers did not have to contend with neighborhoods with many missing teeth. "It was a vibrant area," Turner said. "It needed some kind of catalyst to bring more positive activity" to the neighborhood, he added. After numerous meetings with local residents, Price and his partners designated a 30-acre center of the redevelopment as the City Heights Urban Village, and they concentrated new construction there. One of the first projects was a remodeling of the closed Vons supermarket into a police substation. In 2001, CityLink completed a $30.7 shopping center, with a new Albertsons supermarket and, surprisingly, a Starbucks outlet. Although Starbucks generally builds in affluent neighborhoods, Jones had lobbied hard for the franchise because local residents felt strongly about it. Earlier this year, Price Charities completed the 116-unit Village Townhomes and Office Center. Half the units are low-income rentals, and the other half are for-sale units with low-interest-rate mortgages. Buyers have the option of performing community service to pay off the mortgages on the three-bedroom, 1,300-square-foot units, which cost $140,000 apiece. It is possible to interpret City Heights as a critique of redevelopment. While it would be wrong to say that other redevelopment projects do not set a high value on social services — most of them do — few have placed the creation of a "community infrastructure" as the goal to be achieved in advance of cash-producing commercial projects. As the child of urban renewal, redevelopment is a real estate-oriented strategy in which real estate development and tax-increment generation are the uppermost goals. It would be a mistake to say that City Heights is fundamentally different from other redevelopment projects. The difference is one of emphasis: In City Heights, community development on a grass-roots level has taken priority over real estate development. With the exception of the new retail center, most of the projects to date are unlikely to fill city coffers with sales tax and tax-increment dollars. In a state where redevelopment has too often been degraded into a money-raising tool in the post-Proposition 13 environment, City Heights is a reminder of the purpose for steering investment into the inner city — to aid the wellbeing of the people who live there. That alone should make it famous.

In his first official act of 1970, President Richard Nixon signed the National Environmental Policy Act (NEPA) into law. The symbolism is obvious: The 1970s marked a watershed in the federal government's approach to the environment, and NEPA did more than any other single piece of legislation enacted during that decade to reshape the relationship between Americans and their air, water and land. NEPA stands apart from many environmental statutes in another way: It has remained almost unaltered since enactment. The Bush administration has apparently decided that is long enough. Citing national security concerns, the administration is pressing ahead quickly during the waning months of 2002 on proposals to "modernize and improve" the landmark law. Naturally, NEPA's defenders argue that the act has served the nation well and needs no revision — at least not the kind they suspect the White House has in mind. Passed by Congress in 1969, NEPA requires the U.S. government to assess the environmental effect of any significant project undertaken by a federal agency, funded with federal money or requiring a permit from a federal agency. It requires public disclosure of the results of that assessment, and a public determination as to whether the benefits outweigh the consequences. Those requirements seem merely prudent and unsurprising today, but 33 years ago they were revolutionary. NEPA upended the historical relationship between Americans and the environment, requiring for the first time that government agencies "look before they leap" rather than trying to ignore or reverse environmental damage after the fact. One of its authors, Sen. Henry "Scoop" Jackson, called NEPA "the most important and far-reaching conservation and environmental measure ever enacted." Only months after NEPA became law, the California Legislature used the federal statute as a model for the California Environmental Quality Act (CEQA). The state law is broader in some ways than NEPA, for it applies even to private actions on private property if they would have a significant environmental effect and require discretionary approval from any government agency — federal, state, regional, or local. CEQA will remain in effect regardless of federal tinkering with NEPA, which will blunt the impact of possible NEPA modifications in California. Still, the state has millions of acres of national forests, national parks and federal offshore waters where NEPA changes could have dramatic effects. California was not alone in emulating NEPA. Half the states — and more than 80 countries — eventually adopted statutes requiring environmental assessments. Attorney Nicholas Yost, who served as general counsel for the White House Council on Environmental Quality (CEQ) during the 1970s, has called NEPA "the most widely copied American law in all history." As might be expected from laws specifically designed to slow the permitting process and prevent some projects from going forward, NEPA and CEQA have become lightning rods for criticism from a wide range of interest groups. Local government officials, developers, farmers, miners, timber companies —just about any person, business or organization involved in the use of natural resources — have complained about the reach of both laws. While CEQA has been amended dozens of times, NEPA remains fundamentally unchanged and its implementing procedures have undergone only one substantial revision. In 1977, President Jimmy Carter ordered the CEQ to draft regulations reducing the quantity of paperwork and length of time involved in NEPA compliance. The CEQ, an obscure federal body within the Executive Office of the President, was established by NEPA. The council is charged with promulgating NEPA regulations applicable to other federal agencies, and with resolving disputes among federal agencies regarding NEPA compliance. The council comprises three members appointed by the president and subject to Senate confirmation. The council and its staff spent months carrying out Carter's directive. The CEQ asked the U.S. Chamber of Commerce to coordinate participation by the business community, and asked the Natural Resources Defense Council to do the same for the environmental community. According to Yost, CEQ staff met with labor representatives, state government officials, federal employees, scientists, trade groups and others. The 18-month effort produced several notable revisions, including a time limit on reviews, "scoping" to identify through public input early in the process those issues to be addressed through the environmental impact statement (EIS), and the requirement for a "record of decision" through which a federal agency follows completion of the EIS by producing a public document describing in detail the action to be taken and the environmental consequences of that action. The current NEPA revision process is neither so inclusive nor so leisurely. On April 10, Horst Greczmiel, CEQ's associate director for NEPA oversight, sent a letter to CEQ Chairman James Connaughton requesting approval of a task force assigned to modernize the NEPA process, citing "rapid advances in technology and information security concerns following the events of September 11, 2001." Connaughton — a former industry lobbyist for mining companies and chemical manufacturers — approved the task force, which was formed on May 20, and named Greczmiel chairman. A notice appeared July 9 in the Federal Register announcing a 45-day public comment period during which interested parties were invited to suggest changes in NEPA. (The deadline was later extended to September 23.) Environmental organizations have criticized the process as another in a series of Bush administration attempts to undermine NEPA. The critics cite ongoing federal efforts to exempt logging plans from analysis and public review under the guise of fire prevention, to expedite review of some transportation projects, and to exempt federal activities from NEPA if they occur in offshore waters. "This is an administration that prefers to operate in secret," said Marty Hayden, legislative director of Earthjustice. Connaughton denies that the task force is looking for ways to weaken NEPA. "Our goal is to integrate NEPA practices with newer concepts of management, such as environmental management systems and advancing information technologies," he said in July. Most of the specific issues that the task force has identified, indeed, concern better use of technology in analysis and communication, and are unlikely to have much effect on day-to-day implementation of the law. Two areas of focus, however, alarm the Bush administration's critics: Expanding the use of "categorical exclusions" by which federal agencies can declare certain types of projects exempt from environmental analysis, and reviewing the "balancing of public involvement and information security." To environmentalists, the latter term is code for quashing public input. And the rapid, low-profile nature of the process suggests environmentalists might have reason to worry. The CEQ task force expects to finish its work and issue a report by the end of the year. Contacts: Horst Greczmiel, Council on Environmental Quality NEPA Task Force: (202) 456-6224. Marty Hayden, Earthjustice: 202-667-7120. White House Council on Environmental Quality: www.whitehouse.gov/ceq

In a case that touched on redevelopment law, the California Environmental Quality Act and general plan compatibility, an appellate court has upheld San Francisco's handling of a project on the site of the historic Emporium department store. The court found that the city had proven the existence of blight adequately enough to place the site in a redevelopment project area, that the city had complied with CEQA and that the project was compatible with the city's general plan. A unanimous three-judge panel of the First Appellate District, Division Three, rejected every argument that historic preservation advocates threw at the project. The case is important because it is the first published case in a while that upholds a city's decision to place territory in a redevelopment project area, said Michael Zieshke, the city's attorney. Over the last two years, courts have rejected cities' blight findings four times in Graber v. City of Upland, 99 Cal.App.4th 424 ,CP&DR Legal Digest August 2002; Beach-Courchesne v. City of Diamond Bar (2000) 80 Cal.App.4th 388, CP&DR Legal Digest, June 2000; Friends of Mammoth v. Town of Mammoth Lakes Redevelopment Agency, (2000) 82 Cal.App.4th, 511, CP&DR Local Watch and Legal Digest, August 2000; and County of Riverside v. City of Murrieta, (1998) 65 Cal.App.4th 616, CP&DR Legal Digest, August 1998. "This case shows that if you have a good, solid record with ground investigations, you can prove blight exists," Zieshke. But Susan Brandt-Hawley, the attorney for preservationists, said the CEQA aspects of the case were foremost. Specifically, she said the court made a mistake by upholding the city's decision to rely on an in-house report regarding the economic feasibility of project alternatives, rather than placing a feasibility study in the environmental impact report. "If you are going to deny alternatives to a project based on economic feasibility, then you have to discuss that feasibility in the EIR," said Brandt-Hawley, who requested a rehearing on that point. "This court went way too far. I think they are out of line with 30 years of case law." But Zieshke said all the court did was confirm that a city can rely on an economic feasibility study that is in the administrative record. There is no basis in CEQA for Brandt-Hawley's argument, he contended. At issue was a major office and commercial project on Market Street in downtown San Francisco, near the Moscone Center. In 1996, the Emporium department store chain went out of business. That meant the closure of the store in San Francisco, which was rebuilt in 1908 after the earthquake and fire. The Beaux Arts building – which featured a three-story rotunda topped by a glass dome -- was one of the city's most treasured historic structures, and was eligible for a number of preservationist listings. However, the building sat vacant after the department store closed. The building's owner, Federated, joined with Forest City and the city's redevelopment agency on a proposal to build the whole block, tearing down 11 structures and keeping just the façade of the Emporium building (see CP&DR Economic Development, November 2000). They planned to build a Bloomingdale's department store, other retail and office space, and a hotel. During the later part of 2000, the city certified an EIR, adopted a statement of overriding considerations and amended the Yerba Buena Center Redevelopment Plan to include the project site. Preservationists urged the city to keep more of the Emporium building in tact, but they lost in the planning process. They filed a lawsuit based on numerous grounds, but San Francisco Superior Court Judge James Robertson ruled for the city. The First District upheld the decision. On appeal, the project opponents contended the EIR should have included an economic feasibility of project alternatives, should have considered more alternatives, and should ignored the impacts of a projected parking shortage. The appellate court found no reason to put the economic feasility study, which was prepared by Sedway Group and reviewed by Keyser Marston Associates, in the EIR. " lthough CEQA plainly provides that a reasonable range of alternatives must be included in the EIR, the statute does not require the EIR itself to provide any evidence of the feasibility of those alternatives, much less an economic or cost analysis of the various project alternatives and mitigating measures identified by the EIR," Presiding Justice William McGuiness wrote for the court. "Instead it does require the public agency to make findings and determinations as to the feasibility of such alternatives or mitigation measures with respect to each significant environmental impact which the EIR identifies, based on substantial evidence set forth anywhere ‘in the record.'" The court dismissed the contention that there were feasible alternatives the project proponents ignored, pointing to the economic feasibility study that was in the administrative record. The court further said that the city could properly decide that a lack of parking spaces was not an environmental impact, and ruled that the city's "transit first" was sufficient mitigation for the environmental impacts of the lack of parking, such as increased air pollution. "That is important to cities," Zieshke said of the parking ruling. "You don't have to provide parking under CEQA." In their challenge to the redevelopment aspects of the project, opponents contended the area was not "blighted." But the court found that the city had proven both physical and economic blight existed. "On the basis of their seismic condition alone, eight of the twelve buildings in the Emporium Site Redevelopment Area are particularly susceptible to extensive damage or collapse in an earthquake, and meet the first statutory criterion for physical blight, namely of being ‘unsafe or unhealthy for persons to live or work,'" McGuiness wrote, citing Health and Safety Code Section 33031. "In addition, deteriorated and obsolete design conditions of the existing buildings in the project area ‘prevent or substantially hinder' their ‘economically viable use' as indicated by the high incidence of vacant, abandoned or underutilized buildings." Zieshke noted that unlike the cases from Mammoth Lakes, Diamond Bar, Upland and Murrieta, in this case there was never any question about the area being "substantially urbanized." Plus, in the other cases there was a perception of cities abusing redevelopment for financial gain. But in the Bloomingdale's project, there was no question it was true redevelopment, he said. The court also ruled that the project was compatible with the city general plan regulations regarding historic preservation. The Case: San Franciscans Upholding the Downtown Plan v. City and County of San Francisco, No. A095827, 02 C.D.O.S. 10062, 2002 DJDAR 11417. Filed September 30, 2002. The Lawyers: For plaintiffs: Susan Brandt-Hawley, (707) 938-3908. For the city: Michael Zischke, Morrison & Foerster, (415) 268-6718; and Jonathan Bass, Coblentz, Patch, Duffy & Bass, (415)

Opponents of a proposed recycling center were too late in filing a lawsuit regarding a city's failure to prepare an environmental study on the city's sale of land to the recycling company, the Fourth District Court of Appeal has ruled. The opponents had 180 days from October 19, 1999 — the day the City of San Bernardino adopted a resolution approving the sale and finding that no further environmental review was needed — to file the lawsuit the court ruled. Opponents, who missed that deadline by nearly a month, contended they did not even learn about the project until nearly two months after the fact. But the court ruled the lack of notice about the city's decision not to require environmental review did not matter because the city was only carrying out a previously approved redevelopment plan San Bernardino approved the "Northwest Redevelopment Project" and an environmental impact report in 1982. The redevelopment plan anticipated the 1,477-acre project area would include a variety of light and heavy industrial uses. In 1999, Bio-Mass, an industrial recycling company, offered to purchase 10 acres of land owned by the redevelopment agency to build of a corporate headquarters and a drop-off facility for recycling of construction materials, yard waste and other items. Bio-Mass and the city eventually completed the sale, and the City Council, acting as the Redevelopment Agency board, adopted the final resolutions. In November of that year, Bio-Mass applied for a conditional use permit allowing solid waste collection on the site. The city prepared a mitigated negative declaration for the use permit, and both the use permit and environmental document were approved in early 2000. The city later rescinded the use permit. On May 4, 2000, the Cimarron Ranch Neighborhood Association and one citizen filed a lawsuit contending the city had violated the California Environmental Quality Act by not preparing an environmental impact report on the sale of the property. The opponents also argued that the sale amounted to a "substantial change" from the redevelopment plan, and that change also triggered an EIR. San Bernardino County Superior Court Judge James Edwards ruled for the opponents. But a unanimous three-judge panel of the Fourth District, Division Two, reversed the lower court. The appellate court based its decision strictly on the statute of limitations question. The statute of limitations began running on October 19, the court ruled. Documents related to the sale were available to the public prior to the October 19 hearing, the court noted. Moreover, "neither the statutes nor the CEQA guidelines require a redevelopment agency to afford public notice and comment for the agency's decision not to conduct further environmental review of an individual component of a redevelopment plan," Justice Barton Gaut wrote for the court. Because the city made no CEQA determination on the property sale, the statute of limitations was 180 days, which is considerably longer than if the city had found the project exempt or adopted an environmental document. Opponents missed the 180-day deadline. Gaut noted that opponents were not denied their chance to object to the recycling center, as evidenced by the city's later decision to rescind the use permit. The Case: Cumming v. City of San Bernardino Redevelopment Agency, No. E030566, 02 C.D.O.S. 9326, 2002 DJDAR 10423. Filed August 9, 2002. Ordered published September 9, 2002. The Lawyers: For Cumming: James DeAguilera, (909) 307-5750. For the city: Christopher Lockwood, Lewis D'Amato, Brisbois & Bisgaard, (909)387-1130.

Riverside is pegging its hopes for downtown revitalization to the arts, historic preservation and even an infusion of University of California students. The City Council is scheduled to vote on a new Downtown Specific Plan this month. But the City Council has already endorsed the plan, and city officials are already taking steps to implement some projects in the plan. Private developers are proposing a variety of mixed-use, housing and office projects in and next to downtown, indicating there is momentum behind downtown development for the first time in years. Unlike many Southern California cities, Riverside does not need to create a brand-new downtown, Mayor Ron Loveridge said. The city already has what he calls a "19th century downtown" on which it can build. "We're not back to what Santa Monica or Pasadena look like, but we hope to get there soon," Loveridge said. As it has for several cities, Pasadena provides a model for Riverside. During the planning process, city officials visited downtown Brea and Old Town Pasadena, and found Riverside has far more in common with Pasadena's organic central district than with Brea's downtown, which was essentially one development project (see CP&DR Places, January 1998.) The Riverside plan covers 640 acres near the junction of Highways 91 and 60 at the north end of town. The plan identifies 11 different neighborhoods and land use districts in downtown and attempts to maintain their identities while also encouraging redevelopment and infill projects. City officials also hope to tie the downtown to the nearby Marketplace district, development of which has never taken off despite years of efforts by the city. The city is updating the 11-year-old specific plan for the Marketplace, which is separted from downtown by the Highway 91 freeway. Historic assets The Mission Inn is the "crown jewel" of downtown, and a four-block stretch of Mission Inn Avenue contains no fewer than seven sites on the National Register of Historic Places. The Mission Inn was built between 1876 and 1931, and even the National Trust for Historic Places says it defies description. The 238-room hotel, which covers a full city block, has a number of facilities built in variety of styles. It also has a huge art collection and conference facilities for up to 300 people. Besides commercial structures like the Mission Inn, the downtown also has a number of fancy older homes and classic bungaloes. "Riverside has a long, rich history, and the affluence of our first 50, 60, 80 years of existence are reflected in many of the older buildings we have," said Ken Guiterrez, deputy planning director. "That's why historic preservation became a big part of the plan." While the historic aspects of downtown Riverside are obvious, the arts community is not so evident — at least not to the general public. But as planners investigated the area for the specific plan project, they found a surprisingly large number of visual artists, dance studios and musicians based in downtown. Some of the artists are of the "underground" variety, while others are more maitstream. What planners learned, Guiterrez said, was that downtown Riverside actually serves as something of an arts incubator. To follow up, Mayor Loveridge has formed a committee to consider drafting a citywide arts component and the city is eying the designation of an arts and cultural district. "Traffic congestion limits choices," Loveridge said. "Where you used to travel to LA, now you do it reluctantly. So you need arts alternatives locally." The city is providing nearly $1 million for a seismic retrofit of the Fox Theatre, which could become a live performance venue. Also, the University of California, Riverside, is considering building an arts campus of sorts in the downtown, which is several miles away from the main campus. Janice Penner, a consultant to the Riverside Downtown Partnership, said her group is helping with the proposed establishment of the arts and cultural district. People said are beginning to accept the plan and her organization is encouraged by the city's steps toward downtown revitalization. "We're getting a lot of buzz right now," Penner said. Housing proposals hit The city recognizes that one of the ways to support the arts and cultural affairs is by bringing more residents to an urban environment. However, the construction of additional housing was by far the most controversial aspect of the specific plan process. "The downtown is surrounded on three sides by historic residential neighborhoods that have been subject to real estate speculation, Guiterrez said. Much of that speculation has been in the form of very plain apartment buildings, some of which have not been well maintained and managed. So when city officials started talking about "increased densities" and "multi-family housing" they met with hostility from residents and historic preservation advocates worried about neighborhood integrity. As a result, the downtown plan focuses most housing development on the downtown core, which planners believe is ripe for some mixed-use development. A study found that the downtown core could accommodate up to 2,000 new housing units in densities of 60 units or more per acre. In the surrounding residential neighborhoods, the plan encourages development of owner-occupied housing and, in certain places, live-work units. The city is working on an infill development model for downtown and elsewhere, Deputy City Manager Michael Beck said. The city has looked closely at what Sacramento has done with apartments, condominiums and dense single-family housing development on infill sites. Penner and some other would like to have seen the plan endorse denser residential development in places other than the downtown core. "That's a missed opportunity" she said. But she also understands the history behind the housing issue and why longtime residents are hesitant. The whole downtown specific plan area is within a city redevelopment project area, although exactly how the specific plan and redevelopment projects will mesh is unclear City officials are feeling confident these days because developers who are interested in downtown are finding their way to City Hall for the first time in years. Among the projects proposed are a 300,000-square-foot retail/office/residential project near the Mission Inn, an infill housing development, and some mid-rise office buildings. The city believes it can generate interest in a transit-oriented housing development near a rail station in the Marketplace district. Plus, Guiterrez said, UC continues to look for locations for new student housing, and city officials are pointing UC officials toward sites in the Marketplace district. Staff members are prioritizing steps to implement the specific plan. Among the first projects will be creating better gateways to downtown, Beck said. Currently, motorists on either Highway 60 or Highway 91 could drive right by downtown without even knowing it is there. Planners also see better linkage between downtown and the Marketplace district as vital to both areas. The city is working on an improved pedestrian connection because the freeway separates the two districts. Officials plan to spruce up the underpass with a mural, lighting and other inviting touches so people staying and working in downtown can walk to new restaurants in the Marketplace district. Contacts: Ken Guiterrez, Riverside planning department, (909) 826-5658. Ron Loveridge, mayor, (909) 826-5551. Janice Penner , Riverside Downtown Partnership, (909) 781-7339.

The City of Los Angeles was correct to treat as one project a builder's various proposals for 21 new houses on existing parcels on two streets, the Second District Court of Appeal has ruled. The court rejected the builder's contention that the city could not demand an environmental impact report on the 21 houses, five of which have already been built. The case involved a builder who appeared to be on the verge of getting his project through the system without comprehensive environmental review. It was only the activities of a group of residents that forced the city to reconsider how it was handling the project. During the 1980s, Yehuda Arviv and his company Arviv Enterprises purchased 21 legal lots on Leicester Drive and Woodstock Road in the hilly Mulholland area. In 1988, the city's engineering department approved a geological, grading and soils report regarding 11 proposed residences, but Arviv's plans lay dormant for 10 years. In 1992, the city adopted the Mulholland Scenic Parkway Specific Plan, which included the area of Arviv's lots. In 1998, Arviv received approval from the planning and building departments to construct three houses on Woodstock Road. Soon thereafter, he received approval to build two more houses on Woodstock. The approvals came, apparently, without environmental review or the scrutiny of the Mulholland Design Review Board. By early 2000, Arviv had completed four houses and a fifth was 80% done. The company then applied for a third application to build two more houses, but this application got directed to the Design Review Board. While that project was pending before the Design Review Board, Arviv filed another application for 14 houses on Leicester Drive. The city planning department approved a mitigated negative declaration for the 14-house project and sent it to the Design Review Board as well. At a June 2000 meeting of the Design Review Board, neighbors complained about problems with construction of the five houses and the need for better emergency access. The board recommended approval of the two-house project anyway and said it was categorically exempt from California Environmental Quality Act review. The planning director then approved the two-house project. Two residents appealed the planning director's decision to the South Valley Area Planning Commission, which recommended preparation of a mitigated negative declaration for the seven houses on Woodstock. Over time, however, it became clear that Arviv's was a 21-house project, which required design review and a number of variances for tall structures. Over the objection of Arviv, who noted that five of houses were already on the market, the Commission in late 2000 decided to require an environmental impact report on the 21-house project as a whole. Arviv sued the Planning Commission. Los Angeles County Superior Court Judge Dzintra Janavs ruled for the Commission, finding that the record contained substantial evidence to support a fair argument that the project could have adverse environmental impacts. A unanimous three-judge panel of the Second District, Division Seven, upheld the ruling. "This entire case is the direct result of inadequate, or misleading, project descriptions," Justice Earl Johnson Jr. wrote for the court. "Arviv never intended a two or three house project … he always envisioned a 21-house development." On appeal, Arviv contended he had a vested right to build based on permits and environmental clearances he had already received. But the court decided that requiring an EIR did not impinge on any vested right, in part because the city did not follow the law when approving the first five houses. "Although five of the houses are already built, these structures are only part of all the amenities required to make those houses habitable," Johnson wrote. "Unresolved issues specifically regarding those five houses include ensuring adequate street width, an emergency vehicle turnaround area, sewer system design, drainage and other matters which demonstrate even the five-house project is not yet complete. … An EIR can consider the cumulative environmental impacts of the first five houses on Woodstock Road together with the rest of Arviv's proposed project." The court also found plenty of evidence behind the city's decision to require an EIR. Questions about emergency vehicle access on a narrow, dirt road, hillside stability, the proposed construction of a retaining wall that would reach 50 feet in height, and how the houses would connect to the sewer line remained unresolved, the court found. The Case: Arviv Enterprises, Inc. v South Valley Area Planning Commission, No. B156529, 02 C.D.O.S. 9410, 2002 DJDAR 10527. Filed September 11, 2002. The Lawyers: For Arviv: Gerald Krupp, (818) 508-5712. For the commission: Susan Pfann, office of city attorney, (213) 485-5408.

The owner of appropriative water rights to a creek cannot exercise those rights in violation of state regulations intended to protect fish and wildlife, the Third District Court of Appeal has decided. The court ruled that the owner of appropriative water rights to Big Creek in Trinity County still had to notify the Department of Fish & Game (DFG) before making substantial alterations to the streambed, as required by Fish and Game Code § 1603. The owner argued that his water right, essentially, made him free of regulation and that DFG's attempt to intervene in his in-stream activities amounted to a taking. The court, however, rejected that argument and said the takings issue was not ripe. In 1971, the Murrison family purchased Big Creek Ranch, a 19th century homestead. The family claimed the ranch came with a pre-1914 right to flows from Big Creek. (1914 was the first year the state allocated water rights. Prior to that, the system was essentially first-come, first-served.) The state entered into one-year agreements allowing the Murrisons to alter the streambed in 1989 and 1990 to divert water into their irrigation ditch. In 1998, a state game warden inspected the site and found that the landowner, Scott Edgar Murrison, had blocked nearly the entire flow of the creek with rocks. In April 1999, the state filed a complaint alleging that Murrison had violated Fish and Game Code § 1603 and Business and Professions Code § 17200, which requires the court to impose a fine for unlawful business practices. At trial, Murrison argued that his water rights were not subject to Fish and Game Code and that, anyway, his work fell within an exemption for maintenance of water works. Shasta County Superior Court Judge Gregory Caskey, sitting by assignment in Trinity County, found Murrison had violated the law and fined him $10,000 under the Fish and Game Code, and $1,500 under the Business and Professions Code. Judge Caskey also issued an injunction allowing Murrison to operate his headgate but preventing him from working in Big Creek. Murrison appealed, but the Third District upheld the trial court. On appeal, there was no dispute that Murrison had substantially altered the streambed. Instead, Murrison contended that because the State Water Resources Control Board does not allocate or distribute water rights obtained before 1914, the Fish and Game Code did not apply. He cited Article X, Section 2 of the California Constitution, which bars regulations that deprive any water appropriator of the water to which he is entitled. The court found that DFG was not trying to take Murrison's water. Rather, the agency was only trying to enforce a provision that required anyone to notify DFG of plans to alter a streambed. Murrison had failed to do so. "The requirement in Fish and Game Code § 1603 that Murrison notify DFG of his intent to substantially alter or divert Big Creek furthers the state's substantial interest in the protection of the state's fish and wildlife," Justice Ronald Robie wrote for the unanimous three-judge panel. "This statutory requirement is inherent in the state's sovereign power to protect its wildlife, and Murrison's water rights are subject to these powers. A water right, whether it predates or postdates 1914, is not exempt from reasonable regulation. Just as a real property owner does not have an unfettered right to develop property in any manner he or she sees fit, an owner of a water right may be similarly restricted." The only difference between a pre-1914 water right and post-1914 water right is that the latter "must go through the administrative process before" the State Water Resources Control Board, the court held, citing Fullerton v. State Water Resources Control Bd., (1979) 90 Cal.App.3d 590. Moreover, the statute Murrison violated did not affect his water right, the court ruled. The law only required Murrison to notify DFG before obstructing the creek. And because DFG never attempted the regulate Murrison's water right, his takings claim was not ripe, the court ruled. In fact, Murrison may have pressed his case too far, as the appellate court questioned whether his water right even existed. "While he traced the origins of his claimed right, he failed to present any testimony about the nature and quantity of the right at any time, including the period since the rights were created to the date of the trial," Robie wrote. Yet appropriative water rights are limited to the amount of water that can be, and has been, put to beneficial use. "Murrison has failed to establish a prima facie pre-1914 appropriative right," the court concluded. The court upheld the fines and the injunction, saying the Murrisons "have often refused to notify DFG of their activities in the streambed, leaving them to the discovery of game wardens." The Case: People v. Murrison, No. C038627, 02 C.D.O.S. 7633, 2002 DJDAR 9579. Filed August 20, 2002. The Lawyers: For Murrison: Steven Enochian, Moss & Enochian, (530) 225-8990. For The People: Tara Mueller, deputy attorney general, (510) 622-2136.

Gov. Gray Davis completed the 2001-02 legislative session by signing several bills backed by affordable housing advocates, a coastal access bill opposed by some of his friends, and a bill that takes a modest step toward more coordinated state planning. Unlike past years, the governor vetoed no high-profile land use bills. But he did reject three bills that would have added requirements to general plans, and he vetoed a last-minute bill aimed at protecting American Indian sites from development. Davis's actions brought to a close a legislative session that produced few major pieces of land use legislation other than large bonds, two of which (housing and schools) are on the November ballot. Lawmakers again favored bonds at the end of the session, when they approved a $9.9 billion bond to fund the first phase of a proposed high-speed rail system. Davis — who mocked high-speed rail as "Buck Rogers technology" in 1999 — signed the bill (SB 1856, Costa) and voters will decide on the bond in March 2004. As during his first three years in office, Davis was difficult to predict once bills hit his desk — partly because administration officials were reluctant to take a public position on a bill that they were not sponsoring. The two biggest surprises this year might have been Davis's signing of SB 1962 (Polanco) and AB 857 (Wiggins). The Polanco bill requires the State Coastal Conservancy to accept outstanding offers to dedicate coastal access easements across private land within 90 days of the offer's expiration if no local government or nonprofit organization has accepted the easement. A number of wealthy coastal landowners, including some large Democratic donors, lobbied Davis to veto the measure. However, the bill took on social overtones as it made its way through the process, making a veto more politically challenging. After the governor signed the bill, his office issued a press release noting the measure will "provide equal access to the coast for all the people of California, including low income and minority communities." The Wiggins bill requires state agencies to adopt consistent planning and capital spending priorities based on three criteria: promotion of infill development, protection of agricultural and environmental resources, and encouragement of efficient development patterns. Development and real estate interests opposed AB 857, but they reportedly did not press hard for a veto. Davis recognized the opposition in his signing message: "To allay concerns about the bill's balanced implementation, I am directing OPR to implement the bill's three planning priorities and their effect on the infrastructure plan in a fair and equitable manner and to do so within existing resources. I ask that OPR, with the assistance of all state agencies, prepare the 2003 Environmental Goals and Policy Report and to examine conflicts, which may exist between and within state agencies and their policies and programs." The Polanco and Wiggins bills were two of the biggest priories of the Sierra Club, said Bill Allayaud, who heads the organization's Sacramento lobbying effort. Urban growth, congestion and pollution are issues of concern not just for environmentalists, Allayaud said, pointing to the importance of AB 857. "Everyone is wondering if the state is going to do something when the local governments can't, or refuse, to do something about it," he said. The governor, however, vetoed another one of the Sierra Club's high-priority bills, SB 1828 (Burton). The bill would have expanded the definition of "sacred" American Indian sites, required additional consultation with Indian tribes if a development would impact a sacred site, and set a higher bar for allowing such development. Senate President Pro Tem John Burton watered down the bill at the end of the session. But opponents remained dissatisfied, and they complained that the bill gave Indians too much power over development proposals and that tribes with casinos would use the measure to thwart competitors. In his veto message, Davis listed a host of objections: the list of sacred sites by the Native American Heritage Commission is no good; the location of sites could be kept secret from landowners until late in the planning process; and Indians would gain undue influence over the environmental review process. Still, Davis said he would direct the Resources Agency secretary and the director of the Office of Planning and Research to work with SB 1828 proponents on a new bill to protect sacred sites next year. The Burton bill began as a way to block Glamis Gold Ltd. from developing an open pit mine on federal land in Imperial County that the Quechan tribe considers sacred (see CP&DR Environment Watch, May 2002). Language intended to block the Glamis mine got put into SB 483 (Sher), which Davis signed. However, it was unclear whether SB 483 would be effective without SB 1828. Also failing to pass muster were three bills dealing with general plans. The rejected bills were AB 3057 (Matthews), which would have recast the open space element as the "agricultural and open space element" and required general plans to promote long-term viability of agriculture; AB 2954 (Simitian), which would have required updated land use elements to address the distribution of child-care facilities; and AB 2175 (Daucher), which would have directed OPR to include "human service matters" in general plan guidelines. In his veto messages, Davis cited cost of the three bills at a time when the state has a large deficit. Both the agriculture and the childcare bills would have imposed state mandates on local governments that the state was obligated to pay for, the governor said. The OPR guidelines revisions called for by AB 2175 would have cost an unbudgeted $100,000, the governor said. Davis signed two housing bills that most planners and local governments vehemently opposed as pre-emptions of local authority (see CP&DR, October 2002). AB 1866 (Wright) forces cities and counties to grant nearly any request for an affordable housing density bonus and makes permits for second units a ministerial items. AB 2292 (Dutra) ensures no net loss of zoned housing density that a local government relies on for housing element certification. The governor signed both bills without comment. He also signed a bill that attempts to at least partially resolve the issue of construction defect litigation, which some people blame for depressing the condominium construction market (see CP&DR, August 2002). The bill (SB 800, Burton) sets some standards for construction, gives builders the right to correct alleged deficiencies before a consumer sues, and still gives consumers the right to sue if problems remain. The California Building Industry Association backed all of the housing bills and hailed the governor's signature on SB 800 as "a historic day." The association went so far as to name Burton one of its lawmakers of the year. On the transportation front, Davis signed a bill that allows the Orange County Transportation Authority to purchase 10 miles of toll lanes on Highway 91, one of the state's most congested freeways. Earlier this year, OCTA officials announced they had reached a tentative agreement with the toll lanes' owner, California Private Transportation Co., to buy the roadway for $207 million. The purchase would end the private company's ability to block improvements to the freeway, which provides a vital link between Inland Empire houses and job sites in Orange and Los Angeles counties. The governor also signed SB 1703, a measure that consolidates San Diego regional transportation planning and transit project delivery in the hands of the San Diego Association of Governments (see CP&DR, July 2002). Under the law, the North County Transit District and the Metropolitan Transit Development Board will continue to operate transit systems, but the agencies will no longer be responsible for planning. The measure does not set up a new, elected planning board, a concept backed by the San Diego County Board of Supervisors. "This new law will help cut red tape, save taxpayers money, and improve the efficiency of transportation planning in San Diego," Gov. Davis promised. Davis vetoed a bill (SB 1799 Poochigian) that would have doubled Central Valley representation from one to two members on the High-Speed Rail Authority. The rail line is proposed to run, in part, from Bakersfield to Sacramento. Davis said he did not want additional constraints on his appointment choices. The veto angered Central Valley leaders, many of whom are Republicans.

Among the articles of faith that urban planners hold as self-evident is this: Land use planning is a local endeavor. Many planners even espouse that a town's general plan can influence the "quality of life" through land use regulation. This theory has been at the crux of New Urbanist arguments for revamping development codes. But a funny thing happened on the way to urban design perfection: American-style corporate capitalism intruded. The plethora of the chain coffee houses, stores, and restaurants that grab up space in the neo-town centers — the very projects that collect awards at planning conferences — are at risk of turning these developments into Everyplace. The result is not a new type of community at all, but simply a new version of a shopping mall, ultimately dominated by the same corporations that controlled the old ones. And while the vast majority of California municipalities are still thrilled when Starbucks takes up residence in their downtowns or in their revamped suburban centers, there is a small but enterprising posse of cities that are heading in a different direction. These California towns — let's call them anti-formula towns — have taken community development discussions to the next level, beyond discussions of facade treatment and sales tax revenues. These towns have the vision of remaining a place that cannot be replicated. They safeguard a community where retailers and hotel owners — like residents — are unique and specific to the place, where the geography is Somewhere. The anti-formula towns have acted to stop the halt of the chain businesses by ordinance – making good on the promise of local land use control tools. Commonly, these are called "Formula Business Ordinances," and they define such establishments by their common signage, use of uniforms, and corporate doctrines. The tiny Napa Valley town of Calistoga has the most far-reaching of these. Its original version was passed in 1995 and was updated two years ago. "In 1995," said Associate Planner Jo Noble, "there were rumors of a pending application by a fast food chain. The Planning Commission asked staff to explore how such businesses could be restricted from locating here. We do well with the mom-and-pop businesses, and tourists come here for that reason — to escape the Burger Kings and Carl's Jrs." Calistoga moved quickly when the specter of the chain business presented itself. "The commission was very active in crafting the actual language. It is targeted to protect both restaurants and lodging establishments," Noble explained. Since the city took action, countless communities have inquired about Calistoga's ordinance, and it is widely viewed as a model. The City of Arcata provided the most recent stab at formula businesses, although that North Coast city's ordinance restricts only restaurants. "There are nine formula restaurants in Arcata, and the ordinance does not permit any more to open here" said Mike Mullen, Arcata's planning program manager. Adopted in July, the ordinance allows a new formula restaurant to come to town, but only if an existing one leaves. What makes Arcata's ordinance interesting is its genesis, which appears to be rooted into the anti-globalization movement. In 2000, Arcata, home of Humboldt State University, amended its Municipal Code to create a committee on "Democracy and Corporations." The committee is charged, among other things, with presenting options to the City Council on how Arcata can "control pattern restaurants from moving into downtown areas" and "to cooperate with other communities that are working on socially responsible investing." Mullen sites the work of the New Rules Project, a Minneapolis-based advocacy non-profit, as the philosophical anchor of the new "Formula Restaurant Limitation Ordinance." (see http://www.newrules.org/). At a practical level, the ordinance protects Arcata's eating and drinking establishments, which form the most important sector of the City's economy, Mullen said. During the five public hearings leading up to the adoption, speakers generally favored the protective ordinance by a 3 to 1 ratio. So far, no legal challenges have come forward in either Arcata or Calistoga. Will the anti-globalism movement sweep the rest of California via formula business ordinances? Not likely. No other Humboldt County cities are expected to follow Arcata's lead, Mullen said. San Francisco's Jim Davis, chief planner in that city's Neighborhood Planning unit says that numerous attempts to pass similar laws in the progressive metropolis have failed. The best that San Francisco has been able to get on the books is a 1999 requirement for a conditional use permit process specific to coffeehouses in North Beach, a measure that seems to target Starbucks. This provocative foray into land use rule-making can be seen as a phenomenon that can be expected in communities that meet a unique set of criteria: a tourism-based economy, relatively small, and a progressive-minded City Hall. Nevertheless, these communities have shown that land use tools can be used effectively to tackle the problem of bland, unimaginative sameness in community character. The success of these cities should give faith to planners that local control is possible. Stephen Svete, AICP, is president of Rincon Consultants, Inc., a Ventura-based consulting firm.

The California Infrastructure and Economic Development Bank has loaned nearly $180 million to local governments since June 2000, but whether the loans are promoting the type of "smart growth" that backers touted a few years ago is uncertain. Thus far, no applicant has been rejected based on land use deficiencies of a project. Rather, the money has been available for a variety of standard public works projects — suburban water and sewer lines and treatment plants, storm drainage for new business parks, streets in redevelopment zones. The biggest cheerleader of the smart growth approach to infrastructure funding, state Treasurer Phil Angelides, conceded the program is not perfect. But he contended it is having the intended effect. "We are seeing a lot of projects that are in the urban context, projects in existing neighborhoods," Angelides continued. "I think it's markedly different from the old concept of infrastructure being a two-lane road widened to a four-lane road to serve a factory no matter where it is." Legislation approved in 1994 created the Infrastructure and Economic Development Bank, commonly called the I-Bank. Since its inception, the I-Bank has issued $8.2 billion worth of revenue bonds, mostly for manufacturers and nonprofit corporations that use the money for job growth. The businesses and nonprofits are responsible for paying off the bonds. However, the Infrastructure State Revolving Fund (ISRF) Program, which provides local governments with loans for public facilities, stalled for lack of money under the Wilson administration. The program got rolling in 1999, and as of September the ISRF program had made 35 loans totaling $179 million. Two years ago, the program had $475 million to loan, but the Davis administration took back $277 million because of the budget deficit. With money starting to run short, I-Bank officials plan to raise funds by issuing bonds secured by loan repayments. At the urging of Angelides (one of three members of the ISRF board), the I-Bank adopted criteria that include renewing and maintaining existing developed areas, developing infill sites, and protecting the environment and natural resources. Applicants also earn points for having a certified housing element. However, a project's economic impact, especially in a distressed area, can trump any land use considerations. Late last year, the State Auditor dinged the Technology, Trade and Commerce Agency, which runs the I-Bank, for not adequately quantifying new jobs that resulted from state programs such as the ISRF. There has been no official study of whether the ISRF is successfully promoting smart growth. I-Bank Executive Director Stan Hazelroth said the agency is working on better ways to measure program effectiveness. "We're working on an update of the strategic plan," Hazelroth said. The difficulty, he added, is that the agency "has all these things that are not necessarily related, other than they are all infrastructure projects." Indeed, the projects funded by the ISRF program run the gamut, so comparing one with another is difficult. Most local governments that have received ISRF loans use the money as only one part of a multifaceted financing package, which is what I-Bank officials want. For example, in the City of Brawley, near the Mexican border, officials used a federal grant, city funds and a $2 million ISRF loan to pay for a $13 million expansion of the city's sewer plant. "That was the only way we could afford it," Brawley City Manager Jerry Santillan said. "In an impoverished community, we can't afford to raise our rates." The city pursued the larger sewer plant, and an earlier project to expand water treatment facilities, to serve a large new meat packing plant and spin-off businesses. Since the packing plant opened, unemployment has dropped from nearly 25% to about 14%, according to the city manager. Santillan said I-Bank officials quickly approved the city's loan application, but they were slow to put together loan documents and complete the process. For Brawley, the ISRF loan was strictly about economic growth. Angelides said smart growth criteria has been worked into a number of state funding programs. In highly competitive cases, such as the Low-Income Housing Tax Credit program, there has been a "fundamental change" in the types of projects proposed, he said. That change has been slower to appear in programs like the ISRF program, where administrators work hard to drum up interest from local governments. "Changing priorities is a lengthy process that takes time because it goes to the way people think," Angelides said. Contacts: State Treasurer Phil Angelides, (916) 653-2995. Stan Hazelroth, Infrastructure and Economic Development Bank, (916) 322-1399. Jerry Santillan, City of Brawley, (760) 344-9111. State Technology, Trade & Commerce Agency website: www.commerce.ca.gov