Ben Hulse is director of the San Joaquin County Community Development Department. Long a major agricultural center, San Joaquin County has seen subdivisions rapidly replace farms. The population has grown 63% in 20 years to about 583,000. Earlier this year, the county Board of Supervisors unanimously adopted all 13 of Hulse's recommendations regarding implementation of the eight-year-old general plan. Hulse recommended basing general plan implementation on four values: preserving farmland and natural resources; accommodating growth in cities and communities along transportation routes; creating economic development strategies; and identifying and implementing urban limit lines. He also urged preparation of several follow-up reports and ordinances, as well as an approach that includes all cities, agencies and organizations in the planning process. CP&DR What spurred your report and recommendations to the Board of Supervisors? Hulse The county's general plan anticipated a review every 5 to 10 years. This was first review. The board unanimously approved all 13 recommendations contained in the staff report. There are six directives to preserve agriculture in this county. There are four that are directed towards priorities in communication, coordination, cooperation. There is one directed toward economic development and two towards growth and the need to establish urban limit lines. It's a fairly comprehensive package so that we preserve agricultural land and our resources. We've had to initiate the communication, cooperation and coordination that's necessary with all of the cities and with all of the respective agencies so that we have long-lasting programs. We want everybody to buy into the programs so that they in fact do last. CP&DR Why is economic development important when you want to save farmland? Hulse It is very important because we can't continue in this county to have the same sort of development as we've had in the past and pay the bills in the county; you can't preserve agricultural lands if all the people that move here just have low-paying jobs. People with low-paying jobs put more demands on all of the facilities and services of the county to the point where the county then can't afford to preserve the agricultural lands. And it makes good sense if you're going to, as we suggested, direct growth to the cities and to the urban unincorporated areas that have been designated … to be sure that the cities can afford the infrastructure. Because if they can't, then what happens is instead of intensifying growth in the urban areas, and accommodating that growth, it's just gonna spread right out into the agricultural areas. It's important to have all fronts going at the same time in order to preserve agricultural lands. You have to have successful urban areas to have successful rural areas. Interrelated to that is the need to establish new criteria and standards for annexations, which involves the Local Agency Formation Commission, and to establish urban limit lines so we can provide community separators and identify long-term growth needs for all of the urban areas. … If the cities are either unwilling or unable, either because of infrastructure or because of electorate growth control measures, then the county has to determine whether or not the county wants to establish a process for accommodating that growth. I've prepared general plans either as a member of staff or as a director in five counties. This is the fifth. I relate to everyone the need to look into the future and to be cognizant of the potential adverse affects of growth in the future early so that you can prepare for it. CP&DR Can you give me an example? Hulse In Sonoma County in 1975 we told the Board of Supervisors that if the growth in the cities continued and the growth in the county continued, even under the least impact scenario, that Highway 101 was going to be bumper to bumper from the south county line to Santa Rosa by 1995. It was a 20-year projection. The board laughed at us. They said, "That's ridiculous, Highway 101 will never be bumper to bumper. You guys are trying to scare everyone and the scare tactics won't work." Well, we were wrong. It was 1990, not 1995, when it was bumper to bumper. And now no one is laughing. It's a problem that had it been addressed in 1975 by the entire county and all of the cities, something could have been done. Well, we want to preserve agricultural land in this county, and we need all of the cities and all of the agencies to be involved in making that determination. All I did was spin off the work of the Great Valley Center and Rudi Platzek, who is a planner who has studied all this. And you'll find that I've identified the Great Valley Center activities in the report, both in economic development and preservation of agricultural lands, and potential growth impacts. As a planner, I learned a long time ago, plagiarize any chance you get. CP&DR Steal all the great ideas you can. Hulse Hey, it's Planning Survival 101. Anyhow, I looked at what the potential is in this county, and you'll see a couple of scenarios . In particular, you'll see the year 2080. The State of California list of important farmlands identifies a little over 630,000 acres as important statewide. That doesn't include all the grazing lands in the county. We started looking ahead and identified what would happen if the population projections for this county to the year 2080 would take us up to a little over 3 million — what would happen if development continued in the same fashion as it has in the past? We would wind up with about 210,000 acres remaining in this county. That's a loss of 420,000 acres. In addition, the CalFed project proposes to reduce farmland by 120,000 acres in the Delta and convert it to habitat. You add that to the 420,000 you wind up with 540,000. You quickly see that there is only 90,000 acres left. Projections show that by the year 2080, if growth continues in the same fashion it has been and the population projections are realized, that the Central Valley will be importing food. CP&DR That's hard to believe Hulse It was hard for the Board of Supervisors in Sonoma County to believe that Highway 101 would be bumper to bumper. CP&DR Have you made presentations to the cities yet? Hulse Oh yeah. I've given presentations to Lodi, Tracy, Lathrop, Stockton. The other three are scheduled. CP&DR What was the reception? Hulse We're just starting, and the reception for the most part I would say is amicable. Enthusiastic in a couple of instances. As a result of a prior presentation, our Board of Supervisors went down to the City of Lathrop and met with them jointly to talk about community separators, urban limit lines and an annexation proposed by the City of Lathrop because it appeared contrary to the board's principles. CP&DR Is that the annexation for the wastewater treatment plant? Hulse. Yeah. The newspaper reported … that they agreed to disagree. As far as I'm concerned, we had several opportunities and they were all realized. The Board of Supervisors going to the City of Lathrop and sitting down with them and discussing the specific issues of community separators and urban limit lines and, in particular, the annexation was excellent. We realized an opportunity because we had dialogue and interchange between the City of Lathrop and the Board of Supervisors, even in an area where they didn't reach agreement. The very fact that they were willing to listen to each other's position and to consider their positions and be in the same room at the same time is a tremendous event. It opens up the lines of communication for the future. The first city in this county said we will direct our staff to meet with county staff to identify community separators, urban limit lines, and a program for implementation. The door opened. CP&DR Why don't you use the term "greenbelt?" Hulse I chose the term "community separator" because in certain quarters greenbelt and open space carry negative connotations. I didn't want to deal with that negative side. Also, I chose it because I want community separators to be identified as having functions that are of benefit for the entire community. Community separators are to preserve agricultural land, to preserve natural resources, to preserve streams. They are resource utilization areas. … We also need to direct people away from hazardous areas, like floodplains, and we need to provide recreation areas, parks, trails, even linear parks. And those are all utilitarian uses, beneficial uses, that a community separator can provide. Now, we did not identify habitat conservation as an additional benefit because it may or may not be there. We didn't say that this does provide open space and greenbelt areas as a benefit. That's a side benefit, it's not a utilitarian benefit. It also helps communities establish their boundaries and their individual identification, and that's again a side benefit. There are a lot of side benefits. It's easier to sell something to critical thinkers when they can see the utility behind it. If it is esoteric, it's hard to get them to buy in. … A number of people have attributed everything that's going on here to me. I'm just a catalyst. I brought some experience into this position that will benefit this county, and I made some recommendations, some of which are very controversial. Two years ago this wouldn't have happened. CP&DR What has changed? Hulse All of the communities have become more educated, more aware. What I've been able to discuss with has had some influence on them. But I think probably more than anything the fact that we were able to put together a comprehensive report and identify the real true potential for disaster in the future. We realized the need to get started now, and we will. One of our supervisors said you can have all the words and pretty pictures in the world, but if you don't have the political will it isn't going to happen. I've seen that already with the board. CP&DR You can do all this planning and come up with progressive policies, but how much influence does Sacramento County and the Bay Area have on you? Hulse It's already here. If you look around, to the west, to the south, there are growth control measures all over. And so the pressure to develop in this county is increasing. We're not getting pressure out of Sacramento County because Sacramento County is pretty much accommodating the growth. … It's unlike to the west, where more jobs are being created than housing and so we're getting tremendous pressure to build housing in this county. If Stanislaus County has a growth control measure, it will provide additional pressure on this county. The board's policy is to accommodate the growth, but to accommodate it in the cities. Now that was adopted in '92, and my view of the county's general plan is that it is a good general plan, a good solid foundation … we just need to implement it more. I've been doing this work for the last 30 years. Twenty-five years ago we were proposing "smart growth." CP&DR A lot of people seem to think that smart growth is novel. Do you think it's just solid planning? Hulse It's just traditional. If you go through areas that have developed in the United States along transportation routes, railroads or rivers, what are you going to find? You'll find compact communities. Of course, all over Europe — fly over Italy — you'll see how well preserved the agricultural areas are. CP&DR Do you have a timeline of some sort? Hulse Yes. You'll notice that one of the directives says there is a sense of urgency. I saw a window of opportunity of two years. It's down to a year and a half. CP&DR How did you pick two years? Hulse That's just my own evaluation. I've been looking at the political, legal, administrative and technical sides. Technically, we're finally able to identify what the potential disaster was without a doubt so that I could share that potential with everyone. Legally, we need to identify all of the legal sides that are necessary in order to implement the plan, whether it's to charge conversion fees or to purchase development rights to ensure agricultural lands are available for long-term periods if not for perpetuity. And then politically, this county is ready for it now. We can comprehensively bring everybody in and deal with it as the community of San Joaquin County, not as the Board of Supervisors and each individual city. CP&DR Managing Editor Paul Shigley spoke with Ben Hulse at his office in Stockton.

In an important water rights ruling, the state Supreme Court has held that farmers' long-standing water rights superceded water claims by downstream cities. The unanimous court ruled in favor of seven alfalfa and dairy farmers in the Mojave Valley that had refused to join a pact that allocated water to more than 200 farmers, cities and other entities without regard to historical water rights. "This preserves the farmers' position at basically the top of the water chain," Robert Dougherty, the attorney for the farmers, told the Associated Press. "Cities do take a back seat." In the Mojave Valley, nearly everyone relies on the same water source — the Mojave River, which flows mostly underground. The combination of urban development and desert farming has overdrawn the groundwater supply for decades, causing supply and quality problems for those in some parts of the basin. Ten years ago, the City of Barstow and the Southern California Water Company sued the Mojave Water Agency, the City of Adelanto and other upstream entities. Barstow claimed that the upstream users were hurting its water supply by overpumping. The Mojave Water Agency then filed its own suit against nearly all water users in the basin. The trial court stayed the litigation while the parties worked out a stipulated settlement, or "physical solution," that called for reducing water usage over several years. Nearly everyone agreed to the 1996 settlement, which followed the doctrine of "equitable apportionment" without regard to preexisting rights. The trial court imposed the settlement on all parties, but seven farmers, led by alfalfa farmer Manuel Cardoza, appealed. The Fourth District Court of Appeal ruled for the farmers, holding that the trial court could not ignore preexisting water rights. (See CP&DR Legal Digest , July 1998.) In affirming that ruling, Justice Ming Chin wrote for the state's high court: "Although it is clear that a trial court may impose a physical solution to achieve a practical allocation of water to competing interests, the solution's general purpose cannot ignore the priority rights of the parties asserting them." A court cannot change priorities among the holders of water rights or eliminate vested rights, as the trial court did, Chin wrote. Justice Chin cited California Water Service Co. v Edward Sidebotham & Son , (1964) 224 Cal.App.2d 715: "The first one in time is the first one in right, and a prior appropriator in entitled to all the water he needs, up to the amount he has taken in the past, before a subsequent appropriator may take any." However, the Supreme Court also upheld the appellate court's ruling in favor of the stipulated settlement. The stipulating parties can waive or alter their water rights in a manner they believe in their best interest, the state's high court held. That portion of the ruling provided satisfaction for the cities and water districts. "As a practical matter, we have groundwater management throughout the region," James Markman, an attorney for the Hesperia Water District, told the Los Angeles Daily Journal . The Cases: City of Barstow v. Mojave Water Agency , No. S071728; Mojave Water Agency v. Manuel Cardoza , Nos. E018023, E018681, 00 C.D.O.S. 6973, 2000 Daily Journal D.A.R. 9265, filed August 21, 2000. The Lawyers: For Barstow: Arthur Kidman, Kidman, McCormick & Behrens, (714) 755-3100. For Mojave Water Agency: William Brunick, Brunick, Alvarez & Battersby, (909) 889-8301. For Cardoza: Robert Dougherty, Covington & Crowe, (909) 983-9393.

Property rights advocates won a potentially far-reaching victory with a First District Court of Appeals ruling regarding San Francisco's hotel conversion ordinance. In a takings lawsuit filed by a hotel owner, the court held that the "heightened scrutiny" test applies to the San Francisco law, meaning there must be a close relationship between the exaction and the project's impact. The court ruled that the lawsuit filed by owners of the San Remo Hotel should proceed in trial court. The hotel owners argued that the city's hotel conversion ordinance (HCO) violates state and federal constitutional provisions against taking private property without just compensation. San Francisco's ordinance prohibits the conversion of residential units to tourist use unless the hotel owner replaces the converted units with new affordable housing or pays a substantial mitigation fee. The city has successfully defended the 21-year-old law against repeated legal challenges, but that track record could change. Under the heightened scrutiny test, the city must show both an "essential nexus" between the permit conditions and the impact of the proposed development, and a "rough proportionality" between the exaction and the development's effects. "If the trial court has to apply the heightened scrutiny test to this exaction, the city loses," predicted Andrew Zacks, attorney for the San Remo Hotel owners. "I think the ordinance is in trouble and this case could be the death knell for it. … We think the law ultimately is going to be declared facially invalid." Deputy City Attorney Andrew Schwartz agreed that the heightened scrutiny test would mean trouble, but he argued that court precedent indicates the test should not apply here. "Legislative land-use regulations of general application are to be reviewed in the political process, not in the courts," Schwartz said. He noted the state Supreme Court reached that conclusion last year in a rent control case, Santa Monica Beach Ltd. v Superior Court (1999) 19 Cal.4th 952 (see CP&DR Legal Digest, February 1999). But the court held that San Francisco's regulation is discretionary and not of general application because it applies only to residential hotels, of which the city has about 500. "I think this decision is potentially far-reaching. It would shift policy-making decisions for land use to the courts," Schwartz added. "This decision is a prescription for a very activist court." In response to an affordable housing shortage, the city began regulating the conversion of residential hotels to tourist use in 1979. At that time, the 62-unit San Remo was classified as a residential hotel based on a survey of the hotel operator. The hotel owners, Thomas and Robert Field, dispute that contention, saying they have always provided the majority of rooms to tourists. When the Fields sought permission to provide all rooms to tourists, the city required them to pay a $567,000 conversion fee — equal to $9,000 per room, or 40% of replacement costs — and to offer lifetime leases to long-term tenants. In 1996, the hotel owners paid the fee in protest and sued the city in federal court alleging violations of federal civil rights law, 42 U.S.C. 1983. But the Ninth Circuit Court of Appeals kicked the case over to state court. San Remo Hotel v. City and County of San Francisco (9th Cir. 1998) 145 F3d 1095 (San Remo I); see CP&DR Legal Digest, July 1998. The San Francisco Superior Court sustained numerous demurrers from the city. On appeal, however, the First District, Division Five, ruled that the hotel owners should be allowed to proceed with the case at the trial court level. The Fields challenged both the hotel conversion ordinance itself and the city's application of it to the San Remo. They contended the law does not substantially advance legitimate government interests as required by the Fifth Amendment and that the law forces a small group of property owners to "bear the full cost of providing a general public benefit." Those arguments found favor with the unanimous three-judge appellate panel. Importantly, the court ruled that San Francisco's exaction is discretionary, as were those in Nollan/Dolan. The court specifically rejected the city's argument that the hotel conversion law is a zoning regulation of general application. "The $567,000 mitigation fee obviously was not imposed on every other property in the City," Justice Lawrence Stevens wrote. "Consequently, a heightened level of scrutiny is proper because this is the type of particularized governmental exaction imposed upon a property owner which was seen in Ehrlich." In, Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, the state Supreme Court held that exactions must meet the Nollan/Dolan "essential nexus" and "rough proportionality" standards only when they are imposed ad-hoc on a specific project. Justice Stevens wrote: "The 1990 version of the HCO explicitly states that it demands increased fees from property owners, since other official sources of public funding for low-cost housing became more difficult for the City to procure, thereby shifting the burden of public funding for low-cost housing to the property owner. This is potentially the type of individual taking of property by the government, for an asserted public purpose, which the jurisprudence developed under the takings clause was designed to protect citizens against, and for which heightened scrutiny is appropriate." "We recognize that the HCO may be a well-intentioned measure intended to aid persons on limited incomes by providing affordable housing, but even well-intentioned measures may create unconstitutional takings," Stevens continued. Interestingly, the Fifth District's ruling came only four months after U.S. Supreme Court Justice Antonin Scalia called San Francisco's hotel conversion ordinance extortionate. Scalia argued, but failed, for the high court to take a different case challenging the law (see CP&DR Legal Digest, May 2000). In a written dissent from the court's denial of certiorari, Scalia questioned whether the state appellate court was willing to follow the Nollan/Dolan precedent. Zacks, the San Remo attorney, called Scalia's dissent "an invitation" for the First District to rule as it did. The Case: San Remo Hotel v. City and County of San Francisco, No. A083530, 00 C.D.O.S. 6609, 2000 Daily Journal D.A.R. 8745, filed August 8, 2000. The Lawyers: For San Remo: Andrew Zacks, (415) 956-8100. For San Francisco: Andrew W. Schwartz, deputy city attorney, (415) 554-4620.

"Your money or your life," says the hold-up man in an old Jack Benny joke. "Didn't you hear me, buddy?" the irate gunman says after Jack fails to answer. "I said, your money or your life!" At last, Jack responds: "I'm thinking, I'm thinking!" Jack Benny's difficulty in making up his mind mirrors my struggle with Pacific Shores Center, a 106-acre office park currently under construction in Redwood City. It is true that the project — a group of 10 office buildings containing a total of 1.5 million square feet of space, plus another 160,000 square feet of restaurant, fitness center, and the like — is undoubtedly an improvement over what was there before: a cement plant surrounded by debris next to an island covered with spoils from ocean dredging. It is also true that the new development is considered environmentally friendly because the developer, Jay Paul Co. of San Francisco, has agreed to restore 30 acres of tidal marsh on nearby Deepwater Island, part of the San Francisco Bay National Wildlife Refuge. In exchange for this off-site mitigation, Jay Paul earned the right to fill 14 acres of wetlands on the project site, directly southeast of the lightly used Port of Redwood City. The high demand for office space in the San Francisco and Silicon Valley area (Redwood City lies roughly halfway between The City and San Jose) helps explain why the developer was willing to spend more than five years obtaining entitlements from a host of environmental agencies. Nearly nine months before the project is scheduled to open, the project is already 90 percent leased to four tenants, including Excite@Home, which will relocate 2,500 jobs to Pacific Shores Center and occupy nearly half of the office space. Understandably, the developer seems eager to use the enhanced natural beauty of the site as part of its marketing. The developer bills Pacific Shores Center as the place "where nature, technology and community converge." (As the Brits say, pass the sick-bag.) The marketing seems to be working with some, such as the San Jose Mercury News. "Within a year, thousands of software engineers will fill cubicles in airy waterfront buildings, while mice and shorebirds nestle among fresh strands of pickleweed," a Mercury News story burbles. This kind of writing seems calculated to flatter the pretensions of Northern California techies who like to believe that their lives are in balance with nature. While the site plan of Pacific Shores Center has its merits, it is not a nature preserve (although it overlooks one dimly, across the misty waters). The plan is not elegant, but it is a snapshot of Bay Area culture, circa 2000. Falling in line with the current taste for office park-as-country club, the development features regulation-size baseball and soccer fields, a near-Olympic-size swimming pool, and a jogging path that circles the site. At the center of the development are the restaurant, a "multi-media center," and an outdoor amphitheater. The developer has also made a commitment to use sustainable materials in the construction and to import nearly 5,000 trees. So why am I short of breath when the time comes to cheer? Well, maybe I am asking for too much, but I do not think this project is a model of environmental sensitivity. The developer has taken a tried-and-true formula — the multi-building research "campus" — and imported it to this site, without showing any particular sensitivity to the site itself. While it is exciting that an eyesore like Deepwater Island is getting new life, these mitigations do not excuse the developer from making more of an effort to respect the existing ecology of the site. Why, for example, must half of the development area be covered with asphalt for surface parking? To be sure, the site was not pristine. Still, the area had a number of existing wetlands. Could not the developer have incorporated them into the master plan as open space? The developer's project manager, Peter Brandon, said that restoring wetlands on-site was unfeasible because the surviving sloughs and marshes were filled with chunks of concrete, twisted steel and old tires. Further, these were not sexy tidal marshes, but humdrum wetlands such as fields of pickleweed. Restoring them was too great an undertaking for a commercial project, so the developer opted to fill those wetlands, and perform its wetland-mitigations nearby. At some expense, the developer is removing dirt from Deepwater Island, transporting the soil across the water on barges, and redepositing it along the shore of the project site. The developer is also providing, at the request of public agencies, nearly 13 acres of parks on the shoreline and giving space to a nonprofit educational group, Marine Sciences Institute. That is all very nice, but if I had my druthers, the project would be vertically oriented, not horizontal, to make a smaller footprint on the ground. Brandon said that the developers had the same concern, so they reduced the original number of buildings. The office buildings will be four- and five-stories, higher than the one- and two-story models typical of Silicon Valley. I was also critical of the acres of surface parking; wasn't it possible to put the cars into a parking structure, and open up some more land? Brandon said that the developer is considering enclosing the parking in structures and building residential units above the parking. Now that's an interesting idea. As it stands, however, Pacific Shores Center is a very conventional development on an unconventional site, and that is disappointing. The developer's claim of converging nature and technology still seems misleading. The premise of Pacific Shores Center is not too different from that of the Playa Vista project in Los Angeles, where commercial development is the means — alas, the only means — to achieve some degree of wetlands repair. So why I am being such a pain about Pacific Shores? Maybe I am offended by the exaggerated environmental claims. While I fully believe that the on-site wetlands would have been difficult to restore, it is still disappointing that all the mitigation occurs offsite. At gunpoint, I guess I would say that I support Pacific Shores Center. I just wish the developer had made the choice easier.

In a major victory for developers of Playa Vista, the Ninth Circuit Court of Appeal has reinstated an Army Corps of Engineers permit to fill 16 acres of wetlands. The unanimous three-judge appellate panel overturned a district court ruling that the Corps did not adequately consider environmental impacts of the overall project. The Ninth Circuit held that the Corps did not need to complete an environmental impact statement and that the Corps was correct to review only the wetlands portion of the first phase of the project, not the entire development. Playa Vista is a 1,087-acre proposed development just south of Marina del Rey that has been a source of controversy for nearly two decades. It is one of the last large open spaces in west Los Angeles, but much of its marsh area has been degraded by past development and industrial uses. In 1990, Maguire Thomas Partners (which has since sold the project to Playa Capital Co.) applied to the Army Corps for a permit to fill 16 acres of federally delineated wetlands. In exchange, the developer proposed creating a 26-acre freshwater marsh and 25-acre riparian corridor. The wetlands covered a portion of the area needed for the project's first phase, which was to involve 13,000 homes and 5 million square feet of commercial and office space on 600 acres. (Other, larger wetlands at Playa Vista were not part of this permit.) After a great deal of public outcry and extensive negotiation with various federal agencies, the Corps in 1992 issued the permit under §404 of the Clean Water Act, with special conditions. The Corps also approved an environmental assessment and a Finding of No Significant Impact (FONSI). In 1996, Wetlands Action Network sued the Corps for violating the National Environmental Policy Act and the Clean Water Act. Wetlands Action Network lost the Clean Water Act claim but U.S. District Judge Ronald Lew granted summary judgement for the environmentalists on the NEPA claims. Lew found that the Corps had violated NEPA by limiting the scope of its analysis to impacts of activities covered by the permit, rather than considering the whole project. He further ruled that and EIS was necessary because the efficacy of the freshwater wetlands system was in doubt. The Ninth Circuit said that Lew's findings were correct, but that his legal conclusions were erroneous. Wetlands Action Network argued that the Corps should have studied impacts to the entire 600 acres of Phase I because the wetlands fill was interdependent with the rest of Phase I development. The Ninth Circuit, however, demanded a stronger connection. "The linkage that the district court found between the permitted activity and the specific project planned is the type of ‘interdependence' that is found in any situation where a developer seeks to fill a wetland as part of a larger development project," Judge Melvin Brunetti wrote for the court. "If this type of connection alone were sufficient to require a finding that an entire project falls within the purview of the Corps' jurisdiction, the Corps would have jurisdiction over all such projects, including those which the Corps' regulations cite as examples of situations in which the Corps would not have jurisdiction over the whole project." The interdependence in this case was so weak that Phase I construction could begin, and, in fact has begun, without the §404 permit, the court noted. The Ninth Circuit also rejected Wetlands Action Network's argument that the Corps improperly segmented the project by considering Phase I alone and not reviewing the cumulative impacts of the three-phase development. Instead, the court, citing Morongo Band of Mission Indians v. FAA, 161 F3d 569 (9th Cir. 1998), imposed the "independent utility" test. The court then found that the utility of Phase I "does not depend upon the completion of later phases of the project." Therefore, the Corps need not review all three phases at once. As for the environmental assessment, the Ninth Circuit ruled that Judge Lew's decision "appeals to be largely based on a mischaracterization of the evidence found in the administrative record." Lew pointed to letters from the Environmental Protection Agency and the U.S. Fish & Wildlife Service that raised questions about the proposed freshwater marsh, especially its ability to handle runoff and treated wastewater. Other commentators also questioned the marsh's design. But, the Ninth Circuit held that the Corps considered these issues in the EA, so a more extensive EIS was unnecessary. Brunetti wrote: "The fact that the record also contains evidence supporting a different scientific opinion does not render the agency's decision arbitrary and capricious," as Lew had ruled. The Ninth Circuit also held that it was acceptable for the Corps to issue the §404 permit and the FONSI even though all details of the mitigation plan had not been finalized. Special conditions in the permit were extremely detailed, and filling of wetlands could not commence before the Corps finalized the mitigations, the court ruled. Finally, the court held that controversy in the form of opposition to a development is not adequate to force preparation of the EIS. The Cases: Wetlands Action Network v. U.S. Army Corps of Engineers, Nos. 98-56242, 98-56474, 98-56672, 00 C.D.O.S. 6965, 2000 Daily Journal D.A.R. 9287, filed August 21, 2000. The Lawyers: For Wetlands Action Network: David Williams, Public Interest Lawyers Group, (510) 841-0707 For the Corps: John M. Gleason, U.S. Army Corps of Engineers, (213) 452-3946. For Playa Capital Co.: Charles Treat, Latham & Watkins, (213) 485-1234.

Demand for industrial space in Los Angeles County remains high, but development is not keeping pace. Instead, large-scale industrial projects are going to the Inland Empire, where empty land is plentiful and most local governments have open arms. The trend is distressing to the Los Angeles Economic Development Corporation and some other business boosters, who note that Los Angeles County manufacturing employment has declined in recent years. The manufacturing segment now accounts for only about 13% of jobs in the Los Angeles County, down from 19.5% only 10 years ago, according to the state Employment Development Department. Those figures reflect the loss of about 200,000 manufacturing jobs, mostly in the electronics and aircraft industries. While worldwide economic forces helped alter the composition of L.A. County jobs, several local factors are influencing land development. First, the urbanized portion of Los Angeles County has few vacant sites remaining. Second, redevelopment or reuse of old industrial sites by new industry has proceeded slowly. And, third, local government has encouraged retail development on former industrial sites. Last year, the LAEDC issued a report that said the county as a whole needed to develop up to 21 million square feet a year of new space to accommodate manufacturing and technology jobs. Yet the county was seeing only about half that amount of space developed. Since then, the situation has not changed and vacancy rates have only gotten lower, said Jack Kyser, chief economist for the LAEDC. "The overall industrial vacancy rate in Los Angeles County is down to about 4.7%, which is extremely low," Kyser said. The vacancy rate is even lower in central Los Angeles, Long Beach and the San Gabriel Valley, he said. "There's just not much developable land," said Steve Bloom, a Los Angeles commercial real estate analyst. "That's why the Inland Empire is doing so well." This lack of greenfield sites has caused the LAEDC to focus on "recycling" of older industrial lands. The organization is working on a prototype because environmental cleanup regulations and permitting procedures related to reuse of industrial sites remain ponderous and because local opposition to these projects is common, Kyser said. The LAEDC is especially looking at the Alameda Corridor, a 20-mile-long strip of industry that runs north from the Los Angeles and Long Beach harbors. Extensive rail and truck routes are being constructed to streamline transportation, so heavy and light industry are perfect fits. A number of underused industrial properties lie along the Alameda Corridor, but there has been little talk of recycling them, Kyser said. Bloom said some older sites are difficult to reuse because of obsolete building or parcel configurations. Also, older builders oftentimes are too small for new industries, which want gigantic boxes, he said. And in some instances, transportation corridors have moved away from old industrial districts, he added. The LAEDC also blames cities' focus on sales tax revenue as a hindrance to industrial development. Kyser and other economists argue that a healthy local economy needs a broad range of jobs. Much of the retail development that cities chase results in low-wage jobs. Manufacturing jobs typically pay more, so they bring more money to town, Kyser explained. "This sort of fits into the ongoing debate about job quality in California," Kyser said. A closed General Motors plant in Van Nuys presents something of a case in point. While some of the site was redeveloped for light manufacturing, much of it was converted into "The Plant," a large retail center. Some analysts see a former NASA site in Downey as another lost opportunity. NASA built much of the Space Shuttle and the Apollo equipment in Downey. Now, the city is negotiating with a developer to build retail space, high-tech office space, film industry facilities, schools and a park. David Rodriguez, the city's project manager, said none of the six developers who made proposals mentioned heavy industry for the site, and the city did not pursue it. But he said Downey should get credit for not pursing warehouse and distribution centers, which would have been quickly absorbed but would not have offered the skilled jobs that the proposed project will provide. All of this is not to say that industrial development has ceased in Los Angeles County. A 3.1 million-square-foot project is moving forward in the Dominguez Technology Center in Carson, and the 265-acre Golden Springs Business Park is under construction in Sante Fe Springs. But a good portion of the action is in eastern L.A. County, which is linked to the Inland Empire. A recent report on the San Gabriel Valley by Colliers Seeley, a commercial real estate broker, found that industrial demand was greatest in the Chino submarket, which includes slices of eastern Los Angeles and western San Bernardino counties. That same vicinity contains one of the region's largest industrial projects, called Industry East. Majestic Realty plans to develop 31 buildings ranging from 3,500 to nearly 900,000 square feet apiece during the next 10 years. Still, Kyser, the guru of the Southern California economy, remains concerned. While Riverside and San Bernardino counties snap up industrial growth, the more volatile retail and service sectors expand in Los Angeles County. "He who lives by the retail development dies by the retail development," Kyser warned. Contacts: Jack Kyser, Los Angeles Economic Development Corporation, (213) 236-4820. Steve Bloom, Real Estate News Television, (310) 414-0404. David Rodriguez, consultant to the City of Downey, (626) 304-7891. California Employment Development Department website: www.calmis.cahwnet.gov

A major industrial project in the City of Los Angeles has received approval from the city's new Central Area Planning Commission. However, opponents of the "Cornfield" development next to Chinatown have vowed to continue fighting with a variety of legal and political tools. (See CP&DR Economic Development, January 2000) The commission voted 4-2 in late July to approve Majestic Reality's plans for a 950,000-square-foot industrial and warehouse development on 32 acres of the 47-acre Cornfield. The commission also said a mitigated negative declaration was adequate environmental review. Mayor Richard Riordan supported the project because of its potential to bring 1,000 jobs to an economically depressed district. The site is zoned for industrial uses and it lies within enterprise and empowerment zones. But a coalition of environmentalists, civic activists and environmental justice advocates have vowed to fight city and federal subsidies that would clean up the site, which is a former rail yard. And opponents have strongly suggested they will file lawsuits because the city approved the project based on a mitigated negative declaration, and did not consider the project's impact on people of color. The group would like to see a park, a school and mixed-used development on the Cornfield. The neighborhood currently has no park and no middle- or high school. They also note that an archeological dig on the site in April found remnants of the Zanja Madre (mother ditch), which first carried water to the city from the Los Angeles River in 1781.

A sharply divided three-judge panel of the Ninth Circuit Court of Appeals has upheld an environmental impact statement prepared for expansion of the Kahului Airport in Maui, Hawaii. The court majority ruled that the Federal Aviation Administration had taken the "hard look" at the project's impact on native habitat required by the National Environmental Policy Act, while a dissenting judge called the FAA's study inadequate and deceptive. The FAA and the Hawaii Department of Transportation proposed repaving, strengthening and lengthening the runway at Kahului. (The project has since been put on hold.) The current runway can accommodate any size arriving airplane, but it cannot handle departures of the largest fully loaded jets. Environmentalists worried that the expanded airport would increase the number of flights, especially international flights, thus raising the chances that exotic species would be introduced to Maui's delicate ecosystem. The FAA and HDOT prepared an environmental impact statement that included a biological assessment technical panel's report and a U.S. Fish & Wildlife Service report on impacts to endangered species on Maui. The EIS concluded the proposed project in and of itself would have an insignificant impact but would contribute to a significant cumulative impact. The EIS made, and the FAA accepted, a number of mitigations, including additional inspectors, visitor education and a future study of impacts. Two environmental groups, the National Parks & Conservation Association and Malama Pono, sued. They argued that the FAA's examination of exotic species issues was lacking. But the two-judge majority of the Ninth Circuit sided with the FAA. The court rejected arguments that the airport project would necessarily increase the number of international arrivals and that those flights would boost the risk of alien species introductions. The court dismissed the FAA's projections that international flights would increase from 50 per year to 1,200 per year as "little more than guesses," and pointed out that even 1,200 flights would amount to only 3% of annual air traffic at Kahului. The court further said that environmentalists "cannot identify a single species that will become established as a result of the project, nor can they pinpoint a particular resource that will be adversely impacted." Environmentalists "seek too much from the EIS," Judge Alex Kozinksi wrote. "While they may disagree with the FAA's substantive conclusions as to the alien species impact of the project, NEPA does not guarantee substantive results. So long as the agency has made an informed decision, we cannot intervene. … Because the EIS contains the requisite hard look at the alien species problem, it satisfies NEPA." In a dissent, Judge William Fletcher was sharply critical of the FAA and his colleagues. "The central flaw in the Final EIS is that the FAA failed to admit or analyze the likely environmental consequences of increases nonstop overseas arrivals resulting from the proposed runway extension," he wrote. Fletcher noted that the FAA projected 1,100 arriving airplanes from Asia, compared with none now. Yet the FAA couched its study of this in hypothetical terms, and the FAA's promise of a future assessment cannot be considered part of the EIS, he added. He called the majority's skepticism of the FAA's flight projections "convenient." "Rather than taking a hard look at the possible environmental consequences, the FAA has deliberately averted its eyes from a well known environmental problem and from the potential consequences of its proposed action. … Because the FAA has failed in its duty, and because the majority of this panel has acquiesced in that failure, we will never know what decision a properly informed political process would have produced," Fletcher concluded. The Case: National Parks & Conservation Association v. U.S. Department of Transportation, No. 98-71268, 00 C.D.O.S. 6196, filed July 26, 2000. The Lawyers: For NPCA: Deborah Sivas, Earthlaw, (650) 723-0325. For The U.S.: M. Alice Thurston, Department of Justice, Washington, D.C., (202) 514-2000.

Although Wisconsin may be home to the "cheeseheads," California is actually the nation's largest dairy state. In fact, with annual production at $3.6 billion and rising, the dairy industry is the largest agricultural sector in California. But these are not the best of times for the industry. The Chino dairy preserve in San Bernardino County, the center of Southern California's dairy industry for decades, is pegged for urban development (see CP&DR Local Watch, March 2000). And building new facilities in the dairy owners' top choice for relocation — the southern San Joaquin Valley — is not as easy as it was a few years ago. Several environmental organizations and Attorney General Bill Lockyer have filed suits intended to force more extensive environmental review of dairy projects. Also, local government officials are feeling both the legal and political heat that accompanies dairies these days. Tulare County (population 370,000) is the state's largest dairy county with about 300,000 cows at 300 dairies. But the permitting of new and expanded facilities has nearly ground to a halt during the last year. The county now has about 50 pending applications, roughly half of which are for new dairies, according to Mary Beatie, Tulare County Resource Management Agency assistant director in charge of current planning. A giant dairy complex proposed in Kings County has been dropped during a second round of litigation, and two large dairies proposed near Bakersfield have become a political hot potato in Kern County. Madera County approved two large dairies in July, but environmentalists and the attorney general's office were watching closely. "It's not just an issue with us, it's an issue on the national scope as well," said Caroline Farrell, directing attorney in the Delano office of the Center on Race, Poverty and the Environment (CRPE). "There is a growing awareness that dairies and large-scale agriculture can have an environmental impact." Debate centers on Tulare County A half dozen people recently urged the Tulare County Board of Supervisors to speed up the pace of permit processing. The testimony came during the board's public comment period, so supervisors took no action. But Board Chairman Bill Sanders indicated his position when he said the county was "being held hostage in issuing the permits because of environmental terrorism." John Labandeira, a representative of the Western United Dairymen's Association who addressed supervisors, said, "I think the county needs to move forward. … We don't know what the exact agenda is behind these environmental groups. But what they have done is basically stop the whole industry." Last year, the attorney general's office filed lawsuits claiming Tulare County did not comply with CEQA when it granted permits for two new dairies. The county settled the lawsuits, in part, by agreeing to prepare a program environmental impact report, a first for dairies in California. In April, the county adopted the program EIR and a plan for handling dairies, but CRPE quickly filed a lawsuit over both documents. Although no restraining order has been issued, using the documents as a basis for issuing new permits is a risk, Beatie said. Despite the slowdown at the planning counter, Tulare County continues to receive applications. "I think the dairymen feel compelled to get in line," Beatie said. "Time is really of the essence for a lot of these dairymen because they are tied up with long-term leases that are about to expire." Kings County, just north of Tulare County, has continued to issue permits. In April, the county approved a conditional use permit for a 6,000-acre, 47,700-cow dairy complex outside Corcoran for J.G. Boswell that could accommodate 47,700 cows. The county had approved the same project a year earlier, but CRPE filed a lawsuit to force an EIR on the project. The county completed the EIR and added conditions to the permit, but CRPE filed a new lawsuit in May that claims the EIR is inadequate and that air quality mitigations are lacking. In a move that appears to worry and anger both farmers and local officials, the Sierra Club has joined the CRPE lawsuit as part of its nationwide focus on large-scale livestock farms. All the controversy apparently affected Boswell, which announced in late July it was giving up the fight and would not pursue the project. In Kern County, a proposal from James and George Borba to build two 14,000-cow dairies a few miles southwest of Bakersfield, has drawn sharp protest from Bakersfield residents worried about dust and fumes. County supervisors have not decided on the application, but they have formed a technical advisory committee to make recommendations. The Borbas' difficulties are causing some dairy operators to look farther north for a more favorable political environment. They might find it in Madera County, which in July approved two dairies containing 9,000 and 5,000 cows apiece near Chowchilla. The county relied on mitigated negative declarations in approving both facilities, said Dave Merchen, Madera County senior planner. The county did impose requirements such as ordering one dairy to export all of its solid manure and reducing the herd size if certain concerns arise. Although it filed no comments, the attorney general's office did request the environmental documents for both projects, he said. "These are big in comparison to the dairies that were approved before '94 or '95, but they are consistent with the applications we've gotten in recent years," Merchen said. Saving the water and air The increasing size of dairies stirs much of the concern. Until recently, California's 2000 dairies managed herds that numbered in the hundreds of cows. Nowadays, dairy operators, whether they are moving north from San Bernardino County or simply expanding existing Central Valley farms, feed and milk many thousands of cows in one location. Creation of "factory farms" is the trend in most livestock farming. That worries environmentalists. They fear that the widespread pollution of Chino Basin groundwater attributable to dairies could be repeated in the Central Valley, where groundwater tables are often high. Beatie contended Tulare County has a more progressive approach to dairies than most jurisdictions. It has required conditional use permits since the 1970s and has worked with University of California experts for 20 years in implementing formal guidelines, she said. But CRPE's Farrell argued that Tulare County's program EIR lacks an adequate analysis of cumulative water impacts and does not properly address air pollution mitigation. Tulare and other counties need to get a better handle on air pollution in the form of dust, ammonia and reactive organic gasses, and on surface and groundwater pollution from manure, she said. "Our purpose is not to get the Central Valley clear of dairies and to stop them from coming in. It is to ensure that they are studied and monitored … and if they can be mitigated, to ensure that the mitigations are carried out. It comes down to management practices." Dairy management techniques receive a great deal of attention these days from regulatory agencies and UC, said Allen Dusault, senior project manager for the nonprofit group Sustainable Conservation, which helps dairy operators implement the best available practices. "None of these programs are simple. In most cases they cost money and require training. And farmers have a lot to do," Dusault said. Labandeira, of the dairymen's association, said his groups' members are "very concerned about the environment." Increasingly, they attend classes to learn about new management practices and legal requirements, he said. But the farmers are reluctant to plow large amounts of money into newfangled technology until it is proven and environmental standards are firm, he said. And further study of dairies' impacts is pointless, he said. "You're not going to do a more detailed report than the Boswells and the Borbas have done, so why spend the money?" he said. However, with such a large industry at stake, it is clear that all sides are going to spend quite a bit more money in the near future. Contacts: Mary Beatie, Tulare County Resource Management Agency, (559) 733-6291. Dave Merchen, Madera County Planning Department, (559) 675-7821. Caroline Farrell, Center on Race, Poverty and the Environment, (661) 720-9140. John Labandeira, Western United Dairymen's Association, (559) 285-9126. Allen Dusault, Sustainable Conservation, (415) 977-0380.

Long seen as something of a second-tier resort area, Mammoth Mountain appears headed for the big time. Intrawest, a Canadian company with extensive resort development and operation experience, intends to build 2,300, mostly upper-end housing units and create a new town center in the City of Mammoth Lakes. The idea is to make Mammoth Lakes and the nearby Mammoth Mountain Ski Area competitive with premier all-season resorts such as those in Vail and Aspen, Colorado, Park City, Utah, and Whistler, British Columbia. The massive, multi-faceted project will result in nothing less than the complete makeover of Mammoth Lakes, a tourist town just off Highway 395 in Mono County and about 120 miles south of Lake Tahoe. Besides the expensive new houses and condominiums, a pedestrian-oriented town center with direct gondola access to the ski area, and an overhauled airport with regular commercial flights to at least four cities are also planned. Plus, the Mammoth Mountain Ski Area, which locals refer to simply as "the mountain," has invested tens of millions of dollars in upgrades during the last four years. It all comes after the Ski Area has lost one-third of its business from its high point during the mid-80s, when Mammoth was the busiest ski resort in the country. "It's the town repositioning itself," said Mike Vance, Mammoth Lakes Community Development Director. "We've been losing market share. This is looking at the great physical assets we have and saying what do we need to do to put us in better position?" While Intrawest is committed to the project, the town's overall plans received a set back in late July when an appellate court invalidated a redevelopment plan (see Legal Digest, page 11). At the heart of the various projects is The Village at Mammoth, which will have at least 800 housing units and 130,000 square feet of retail space, said Steve Perkins, of Perkins & Associates, Intrawest's planning consultant. The current city center on Highway 203 is "quite a mess," Perkins said. The new plan is to create a pedestrian-friendly town center on Minaret Road just off the highway and route traffic around the area. This will change the atmosphere at Mammoth Lakes for the better, Perkins said. Mammoth Lakes developed under the suburban model, with wide streets and heavy reliance on the automobile. Visitors who stay in town must drive to the ski area and everywhere else. But the big-time resorts � and Intrawest has built a number of them, including Copper Mountain Resort in Colorado and Tremblant in Quebec � offer more of a seamless experience. Under the plan that is moving forward, people could find lodging in The Village, walk to shops and restaurants, catch the gondola to the slopes, and ski a trail right back to The Village. It will be similar to European alpine towns, said Dana Severy, Intrawest vice president who is overseeing what the company calls "Project Sierra." "We're literally trying to integrate what we build right into the ski mountain," Severy said. "It is really intended to be a departure from the traditional land uses at Mammoth. Mammoth is very much like Southern California � you don't do anything without getting in your car." Away from The Village, Intrawest plans to build 1,100 units in the Juniper Springs area, and about 400 more units in Sierra Star, a golf course development smack in the middle of town. The Sierra Star golf course opened last year, and city officials would like to see a conference center on the site, although nothing is final. While Intrawest has become the key player since acquiring about 250 acres in Mammoth Lakes four years ago, Severy noted that the company is only carrying out three master plans for the resort corridor that the City Council adopted in the early 1990s. It appears that Intrawest is having no trouble marketing its products. Townhouses and condominiums are reportedly selling in the high six figures before they are even complete. Most of them are being purchased as second homes are as part-time rentals, in which the owner rents the unit when he is not using it, said Craig Olson, an associate planner for Mammoth Lakes. Of course, direct and indirect costs accompany this transformation in a town with 5,500 full-time residents and 8,000 visitor beds. Real estate prices have doubled in the last 18 months, according to Vance, and everyone acknowledges fears about affordable housing shortages in the near future. Some full-time residents worry about losing their community's character. And the combined federal and local subsidies top $55 million. The biggest chunk of government money would be a $30 million grant from the Federal Aviation Administration to widen, lengthen and overlay the existing runway and taxiway. This would accommodate the 757s that American Airlines has agreed to fly from Dallas and Chicago, said Airport Manager Bill Manning. The airport also hopes to lure 737 service from San Jose and Los Angeles. Additionally, the city has agreed to build a $12 million terminal. The Ski Area, of which Intrawest owns 58%, will front the money for the terminal, and the city will pay back Intrawest with growth in transient occupancy tax. This deal has been finalized and was important to the FAA, which wanted to see all parties share the risk. The FAA is scheduled to decide on the grant this month. If everything goes smoothly, construction could be completed in fall of 2001, Manning said. "We created a public-private partnership and we all had common goals," Manning said. "There has been a lot of synergy, and we formed a very strong partnership." American Airlines has signed a five-year agreement to fly planes from Chicago and Dallas to Mammoth Lakes. The Ski Area will subsidize the commercial service, which is common in resort areas, Manning said. Up to 150,000 passengers could use the airport annually within seven years. Mammoth Lakes currently has no commercial air service. Additionally, Intrawest will receive a $14 million reimbursement from TOT growth for building parking garages and other infrastructure. According to independent economic analyses, TOT revenue, which now amounts to about $5 million annually, should approximately quadruple in 10 years. Under this scenario, which Vance described as very conservative, Intrawest and the Ski Area would get paid back within five years � even after the city gets the first 45% of TOT growth. "The town general fund is never at risk because the only funds directed to the mountain and to Intrawest are from the growth they generate," Vance said. "If they aren't successful, they don't get paid back." A development agreement, which has yet to be finalized, contains these details. Intrawest hopes to complete the contract as well as amendments to The Village master plan this fall so that development can move forward next year during Mammoth Lakes' abbreviated building season. Although a concern for some people, the loss of town character does not seem to be as hot an issue as the loss of affordable shelter. Other ritzy resort areas, especially those in the Colorado Rocky Mountains, have become so pricey that service workers either live in overcrowded conditions or commute long distances from less-expensive burgs. Mammoth Lakes, notably, contains only four square miles of real estate and is surrounded by the Inyo National Forest. Olson, a city planner, said officials are crafting an affordable housing policy. Furthermore, Intrawest agreed to build affordable units as development proceeds and could simply deed blocks of low-cost condominiums to a housing agency, Olson said. Intrawest's Severy said the company will build 250 affordable units faster than required by the city, including two 16-unit apartment buildings next year. Plus, the corporation is working with various entities to create a housing foundation. "We take it very seriously. We acknowledge it as an issue. We think we are part of the solution," he said. Severy noted that Intrawest not only develops resorts, it also operates them. Relying on service workers who must commute long distances in bad weather is a poor approach, he said. In fact, added Severy, Intrawest's dual role as developer and operator benefits the city. "I think that shapes your planning horizon and how you approach things. That tends to result in what I call a more capital-intensive approach to development," he said. The Mammoth Lakes Town Council has several key decisions to make in coming months, including reconsideration of redevelopment. Still, the town's path appears to be set. "It's the last great ski mountain that has not realized its potential," Severy said. Contacts: Mike Vance and Craig Olson, Mammoth Lakes community development director, (760) 934-8989, ext. 224. Bill Manning Mammoth Lakes airport manager, (760) 934-3813. Dana Severy, Intrawest vice president, (760) 924-8189. Steve Perkins, Perkins & Associates president, (510) 215-1600.

The two principal authors of the 1998 revisions to the California Environmental Quality Act Guidelines say a recent appellate court decision misinterpreted the Guidelines. The case, Friends of Sierra Madre v. City of Sierra Madre, (1999) 76 Cal.App.4th 1061, has since been accepted for review by the state Supreme Court. Last December, the Second District Court of Appeal overturned an election in which voters approved a city-sponsored ballot measure to remove 29 properties from the city's Register of Historic Landmarks. (See CP&DR Legal Digest, January 2000.) The court held that placing the measure on the ballot qualified as a project under CEQA and, therefore, was subject to environmental review. The court specifically pointed to the 1998 Guidelines as having embraced the narrow holding of Stein v. City of Santa Monica, (1980) 110 Cal.App. 3d. 458. In Stein, the court ruled that the ministerial act of placing a citizen initiative on the ballot was exempt from CEQA. The Second District said that drafters of the Guidelines chose not to codify other election-based CEQA exemptions found in subsequent court decisions, such as Lee v. City of Lompoc, (1993) 14 Cal.App.4th 1515. But Maureen Gorsen, an attorney with Weston, Benshoof, Rochefort, Rubalcava & MacCuish and the former general counsel of the California Resources Agency, and Antero Rivasplata, an environmental planner for Jones & Stokes and former director of the Office of Planning and Research, now say the court read too much into what they did not do. "In 1998," Gorsen and Rivasplata wrote in a letter to CP&DR, "over 120 revisions to sections and subsections of the CEQA Guidelines were proposed and adopted. During that time, there was no proposed revision to subdivision (b)(5) of §15378 pertaining to the applicability of CEQA to ballot box initiatives. That subsection was merely renumbered from (b)(4) to (b)(5) to straighten up §15378 for light housekeeping changes to that section. In 1998, it was not the style of the drafters of the Guidelines to add references to relevant cases in parenthesis. However, neither was it the drafters goal to ensure that the nearly 400 sections and countless other subdivisions were revised and updated. "We had our hands full with the 120 or so revisions we were actually proposing to make. In fact, once the winnowing down of the sections that were to be addressed, revised and updated was determined, we never looked back at the sections that we hadn't chosen to include. First, we didn't have the time. Second, and more importantly, the Administrative Procedure Act (APA), which sets out the process for making Guidelines revisions, prohibited it. The APA simply does not permit the revision of sections or subsections that are not described and explained in the original Notice of Proposed Rulemaking and Initial Statement of Reasons. (5 Gov't. Code §11346.8(c).) "Certainly, during the public comment period, there were many comments making suggestions to clarify or add to sections and subdivisions not included in the initial Notice. However, due to the APA's prohibition on introducing new topics to a rulemaking after the notice has been published, any such comments were treated as ‘outside the scope of the rulemaking.' That is a phrase we used over and over in responding to comments not directed at the 120 revisions proposed in the initial Notice. That is the phrase we used when commentors brought to our attention the ballot box decisions such as City of Albany and Lee v. Lompoc that we did not add to the §15378. So the court is right to ‘presume' that drafters at OPR and the state resources secretary knew about the cases. "However, for the reasons described above, the court was wrong to presume that ignoring them meant that our intent was to codify the more narrow holding of Stein. … The renumbering of §15378 is not the cause for the Second Appellate District to abandon precedents inconvenient to its desired policy outcome." The Supreme Court has not yet set a date for oral argument.

In three adult business cases decided in late June, the Ninth District Court of Appeals upheld one city's zoning ordinance, struck down another city's code and sent a third city's regulatory system back to district court for further proceedings. The court upheld the City of Taft's ordinance that restricts adult businesses to a select few parcels in town, but it struck down a similar ordinance in Simi Valley as unconstitutional because that city's process essentially permitted third parties to block adult businesses. Finally, the court said adult bookstore owners in Long Beach must have an opportunity to prove that the city's ordinance violates their First Amendment rights. Together, the decisions do little to clear up the muddy situation around adult business zoning. "It's all very discretionary and very vague," said Santa Monica Attorney Roger Jon Diamond, who represented adult business owners in all three cases. "The courts are kind of making it up as they go along here." In the Taft case, Steven Diamond (no relation to his attorney) applied to open an adult bookstore at a location where he previously operated a pawnshop. Although Diamond's store was in the correct commercial zoning district for an adult business, the city denied his application because the site was within 1,000 feet of parks, churches and residences, in violation of the city's ordinance. Diamond sued, claiming that the city's ordinance unconstitutionally limited his alternative means of communication because almost no site was available that could meet the limitations of the city's ordinance. Under the U.S. Supreme Court's decision in City of Renton v. Playtime Theaters, 475 U.S. 41, (1986), the city must provide a "reasonable opportunity to open and operate." Also, the Ninth Circuit has required that adult business sites must be part of the "actual business real estate market." (Topanga Press v. City of Los Angeles 989 F.2d 1524 (9th Cir. 1993); CP&DR Legal Digest, April 1993.) At trial, the city presented a list of 23 potential sites that could be locations for adult businesses. Eastern District of California Judge Anthony Ishii ruled for the city. Because adult businesses must be 1,000 feet apart under Taft's ordinance, Ishii determined that up to three adult businesses could operate simultaneously under the city's zoning ordinance. Because Diamond was the only person to ever seek permission to open an adult business in Taft, Ishii ruled that these three sites were constitutionally sufficient. In upholding Ishii, the Ninth Circuit took a slightly different tact. The unanimous three-judge appellate panel ruled that seven of the 23 sites were possible locations for adult businesses. "We conclude that the proper measure of sufficiency is not the three sites that could exist simultaneously, but the total seven sites that are available under the ordinance," Judge Michael Daly Hawkins wrote. "As the first person to seek to open an adult business in Taft, Diamond is not limited by the 1,000-foot restriction in choosing a site for his business. He can choose among all seven sites." Saying that there is no constitutional requirement that a city make available a certain number of sites for adult businesses, the court declined to pick a number. But it did rule, "Seven sites in a community the size of Taft is sufficient to allow Diamond an opportunity to open and operate." Although it analyzed only three of the seven sites, the court rejected Diamond's argument that the locations were not part of the "actual business real estate market" because they lacked sidewalks and street lighting and because two sites were occupied. The court held that the infrastructure "might be unnecessary" and that there was insufficient evidence the sites would not become available. John Gibson, Taft's lawyer, said the court's ruling is important for small cities with minimal infrastructure. Taft has little infrastructure to offer any new business, so it should not be required to designate prime locations for adult businesses, he said. "The court said we aren't going to operate in a vacuum, and we are going to be reasonable in what we require cities to do to protect the rights of the pornographers," Gibson said. "I hope this will give small towns around the country some hope." The Long Beach case was similar except that Long Beach had existing adult businesses. In 1994, Long Beach amended its zoning ordinance for adult businesses and gave existing operations 18 months to comply. The owners of five adult bookstores — all of which were within 300 feet of residential zoning districts, which was too close under the new ordinance — filed suit claiming that their First Amendment and equal protection rights were violated. The district court granted an injunction against the city before ruling that the ordinance was constitutional. However, the Central District of California Judge Richard Paez (who has since been appointed to the Ninth Circuit) stayed his ruling until the appellate court decided the case. The same three-judge appellate panel that ruled for the City of Taft said that Paez erroneously denied the adult business owners a chance to submit evidence that the alternative sites would not reasonably become available. "This holding was in error in light of our conclusion today that, under Topanga Press, property must have a genuine possibility of coming available for commercial use to be considered part of the relevant commercial real estate market." The court then remanded the case back to the district court. It rejected the equal protection claims. In newspaper stories, Long Beach officials claimed victory because the court did not strike down their ordinance. But Diamond, the business owners' attorney, said he can show that many of the sites are tied up in long-term leases. The court said, " roperty subject to a long-term lease might not meet the Topanga Press test." "The bottom line, of course," said Diamond, "is that all my clients are still operating." In the Simi Valley case, a different panel of Ninth Circuit judges struck down the city's ordinance. In 1993, Simi Valley adopted regulations that, like those in Taft and Long Beach, prescribed buffer zones between adult businesses and sensitive uses, such as residential zones, youth-oriented businesses, schools, parks, places of worship and other adult businesses. The city adopted the ordinance after developer Philip Young submitted an application to open a club with nude dancing at 999 Los Angeles Avenue. Blocked by the new ordinance, Young filed a lawsuit challenging the ordinance's constitutionality in 1994. Young then talked to the city about opening his club four blocks away. Because he initially received a positive response, he stayed his lawsuit. After months of requesting more information and saying his application was incomplete, city officials eventually denied Young's application for a special use permit because the site did not comply with the buffer requirement. It seems that the day before the city issued its ruling, a Baptist minister had applied — and received immediate approval — for permission to operate a bible study class one hour a week in a commercial building near Young's proposed club. Also, the city said there was a "youth-oriented" karate school within 500 feet. When the Planning Commission considered Young's appeal, it decided that a proposed site's compliance with the buffer zone should be determined based on the date of project approval, not the application date. The decision cost Simi Valley the case. Central District of California Judge William Rea ruled that Simi Valley was giving "de facto veto power" to a third party, making it "unreasonably difficult" for an adult business to open and operate. On a 2-1 decision, the appellate court agreed, declaring the ordinance facially invalid under the First Amendment. "The ability of private parties to obtain an over-the-counter zoning permit that effectively blocks an adult use, at any time during the lengthy permitting process for adult businesses, deprives a potential adult business owner of ‘reasonable alternative avenues of communication' as required by the Supreme Court's holding in Renton," Judge A. Wallace Tashima wrote. In a dissent, Judge Diarmuid O'Scannlain said that the likelihood of a sensitive use manipulating Simi Valley's system was "a factual question for a jury to decide." A jury trial had ended in a mistrial before District Judge Rea decided the case as a matter of law. Simi Valley has since changed its ordinance and assigned a special zone to adult businesses. The Cases: Steven A. Diamond v. City of Taft, No. 98-17253, 00 C.D.O.S. 5149, 2000 Daily Journal D.A.R. 6901, filed June 27, 2000; Seung Chun Lim v. City of Long Beach, No. 98-55915, 00 C.D.O.S. 5155, 2000 Daily Journal D.A.R. 6894, filed June 27, 2000; Philip Young v. City of Simi Valley, No. 97-56484, 00 C.D.O.S. 4931, 2000 Daily Journal D.A.R. 6581, filed June 20, 2000. The Lawyers: For Diamond, Lim and Young: Roger Jon Diamond, (310) 399-3259. For Taft: John D. Gibson, Gibson & Gordon, (661) 664-7200. For Long Beach: Daniel S. Murphy, city attorney's office, (562) 570-2242. For Simi Valley: Bert Deixler, McCambridge, Deixler & Marmaro, (310) 788-5800.