The housing market slide that began during late 2006 and picked up speed in 2007 has become a full-fledged disaster in 2008. Housing starts are at their lowest level since anyone started keeping track, and prices continue to fall. Neither developers nor lenders are willing to start new projects, and analysts say the market may not turn around for at least three or four years. Statistics for housing starts and sales indicate that the Central Valley and the Inland Empire are the hardest-hit areas, with starts down by more than 90% in places such as Merced and the Yuba City/Marysville area. Sales of new single-family houses in San Bernardino and Riverside counties have fallen by 80% since the first quarter of 2006. Stockton, Modesto and Merced continue to be national foreclosure leaders. Housing starts for the year are projected to reach only 66,000 statewide, according to the California Building Industry Association. That's down nearly 70% from the 2004 and 2005 peaks of about 210,000 starts per year, and down 50,000 units from last year's weak performance. For 2009,the CBIA – which is usually overoptimistic – predicts only 67,000 starts. The bright spots – or at least the less dim spots – are in multi-family housing projects, especially those in urban areas and close to transit. While single-family starts have dropped 78% in three years, multi-family starts have decreased "only" 41%. "Housing starts tend to fluctuate considerably, especially in areas like the Central Valley and the Inland Empire where there is more available land and fewer regulations," said Jed Kolko, an economist at the Public Policy Institute of California. "On the coast, where there is less available land and more regulation, we see much less fluctuation over time. So, the change in housing construction in San Francisco and San Jose, for instance, is much milder than what we see in inland parts of the state." Depressing anecdotes and horror stories abound from around the state: • When a bankruptcy trustee tried to auction off SunCal's 6,000-lot McAlister Ranch project in Bakersfield, which has a Greg Norman-designed golf course and infrastructure in place, nobody came to the auction. • The price of raw land in the Bakersfield area as fallen from about $150,000 an acre to less than $20,000 an acre. • The median price of a single-family house in Contra Costa County sunk to $295,000 in September, down 50% in one year, according to DataQuick. • Three out of four sales in Merced County are foreclosure sales. • Real estate agency Dyson and Dyson, which deals primarily with upper-end homes, has closed all of its Coachella Valley offices. • Because of cash flow constraints, Pleasant Hill-based Delco Builders has stopped all construction despite having entitlements in hand for a number of subdivisions. • DR Horton, the largest homebuilder in the country, has put thousands of acres of raw and entitled land across California on the market at prices less than what the company paid. • Pardee Homes asked for and received a one-year extension on a 500-home development in Canyon Country. • SunCal suspended work in October on redevelopment of the Oak Knoll Naval Medical Center in Oakland, where the company plans nearly 1,000 housing its and some retail space. SunCal paid $100.5 million for the property three years ago. • A proposed 39-story condo and hotel tower overlooking Petco Park in downtown San Diego went bust in October, and the lender took over the property. • Developers with entitlements to build 1,500 housing units and a shopping center at The Village at Mission Lakes in Desert Hot Springs appear to have walked away after partially completing two commercial structures. • Developers of three condominium towers in downtown San Jose have received the city's permission to rent the vast majority of units because sales virtually stopped. • Watt Communities has put on hold its plan to build two five-story, mixed-use buildings containing more than 200 housing units in downtown Pomona. • Nearly every reuse project at the former Fort Ord military base in Monterey County is on hold, including the ballyhooed, new urbanist East Garrison development (see CP&DR Local Watch, January 2006). • Fresno's high-profile Running Horse project – 800 houses around a Jack Nicklaus-designed golf course – is mired in bankruptcy with no houses built. Donald Trump considered buying the project but backed out when the city declined to provide a subsidy (see CP&DR Deals, December 2007). • Stalled development of a country club housing project in Placer County forced developer CC Myers to declare bankruptcy. "The reality on the development side of things," said Renata Simril, Forest City Residential West senior vice president, "is that if projects have got development permits and have got their financing, but they have not started construction, they are holding." Approved projects that lack financing have almost no chance of moving forward in the near future, Simril added. "The debt market has completely frozen up," she said. "The banks are continually raising the equity requirement," said Donald Brackenbush, who heads the real estate advisory firm Public Private Ventures. "Now it's up to 40% or even higher, and you have to get your project appraised. But they don't know how to appraise it because there aren't any comps." "Those that borrowed money to buy land will give it back to the bank, or they will simply turn to dust," Brackenbush said. What happened? Essentially, explained Delores Conway, director of the Casden Real Estate Economics Forecast at University of Southern California's Lusk Center, the system went from a flood of capital to a drought of capital in a short period. "There were a lot of available loans around at very attract interest rates" for both builders and homebuyers, she said. "What's amazing is that the credit markets have dried up and are fueling this decline." "Where a lot of those new housing starts were was in the Central Valley and the Inland Empire as everyone was building farther and father out," Conway said. "Overbuilding is always associated with real estate cycles." Even when there was "overbuilding," however, development industry leaders and state officials said construction was not keeping pace with the state's 500,000-a-year population growth. Six years ago, Brackenbush, who serves on the executive committee of the Urban Land Institute's Los Angeles Chapter, lead a planning exercise to figure out how to house 6 million additional people in Southern California. "Now," said Brackenbush, "not only are we foreclosing and houses are sitting vacant, we're not building any new ones." Some cities and counties are trying to spur construction. For example, a number of cities in Orange and Sacramento counties and elsewhere have agreed to defer collection of impact fees until the final building inspection stage. Some jurisdictions have postponed scheduled fee increases. The City of Morgan Hill has relaxed its requirement that builders make 13% of new units affordable. But nothing that local government does seems to have much effect. "We've had some encouraging news in the last few weeks that sales are up a bit and inventory is down," said Robert Rivinius, president of the CBIA. Still, construction is very slow. He recommended that Congress pass a true tax credit for homebuyers – unlike the program approved earlier this year that Rivinius said is more of a loan. He also urged local governments to reduce impact fees, and the state to create a permanent funding source for affordable housing. Simril said now is the time for governments to undertake aggressive planning. She cited the City of Los Angeles' specific plan process for about 600 acres of industrial land at the Cornfields and Arroyo Seco. The process is likely to result in preservation of some industrial uses, but also in identification of mixed-use development opportunities and upzoning for high-density housing. The city also is preparing a master environmental impact report. All of this will ease the process for builders, she said. What Los Angeles is talking about may be where the market is headed. Real estate devaluation, the number of available exurban units, high energy costs and even state policy appear to be changing the homebuilding and homebuying calculus. "What's happening now is that different real estate products are becoming desirable," said Conway. "The developers are not going to do these huge developments where they build hundreds of houses way out there." Rivinius conceded that the few houses getting built are smaller and less fancy. "Many builders are changing their product some to make their homes for affordable. I think you'll continue to see that," he said. Noting that land prices have not fallen so sharply in coastal urban areas, Brackenbush predicted that high densities and transit will be the focus of future housing development. "They said in 1981, ‘Stay alive 'til 85,'" Brackenbush recalled. "They said in 1991, ‘Stay alive 'til '95.' I don't know what they are saying now. 2015?" Contacts: Delores Conway, USC Lusk Center for Real Estate, (213) 740-4836. Renata Simril, Forest City Residential West, (213) 488-0010. Donald Brackenbush, Public Private Ventures, (626) 795-0919. Jed Kolko, Public Policy Institute of California, (415) 291-4483. Robert Rivinius, California Building Industry Association, (916) 443-7933. CBIA housing starts and sales statistics: www.cbia.org/go/cbia/newsroom/housing-statistics /

A charming anecdote from the childhood of the future Queen Victoria can be found in Lytton Strachey's classic biography. When still a young noblewoman of five or six, she is introduced to the aging King George IV. "Give me your paw," says the fat, dissolute monarch to the future Empress of India, who duly complies. At that moment, the biographer writes memorably, "Two ages touched hands." Two ages also touch hands, in a metaphorical way, in the specific plan for Loma Vista in Clovis. Instead of a king and future queen, however, we have two ages of California land development encountering each other in one of the last remaining corners to be developed in this Fresno County city of 95,000 people. The first age is the 19th Century, when much of Clovis and neighboring Fresno were divided into large, square lots by land barons for sale to small farmers. Those farmers grew wheat and planted vineyards in land newly irrigated by canals (known locally as "church canals") that connected the Kings River to the Fresno area. To a remarkable degree, the regular, checkerboard street grid of Clovis preserves the boundaries of those old farming tracts, most of which date from the 1880s. The other age in this historic encounter is the early 21st Century, influenced strongly (if not always systematically) by the orderly doctrines of the new urbanism. A quick glance at the Loma Vista specific plan offers some of the symmetrical, geometrically regular shapes that have made new urbanist planning so attractive, at least at the map level. This part of the city carries a lot of planning weight on its shoulders, so to speak. The city is 6,000 housing units short of the regional "fair-share" mandate, including several thousand unbuilt units of affordable housing. Although that housing goal is probably unattainable either within the city or its sphere of influence, Loma Vista is planned for dense residential development, surrounded by a moat of conventionally dense single-family neighborhoods. The city has already set aside about 145 acres for the Reagan Educational Center, a campus combining elementary, middle, and high schools. The plan also sets aside a large area for "residential planned community." The surveyor part of the plan is not exciting. The map of Loma Vista lacks spatial hierarchy or an obvious center, even though the city in fact has well-defined downtown and historic districts. What the street pattern lacks in visual interest, it probably makes up in efficiency, because the regular street pattern likely works well for cars and trucks. It is odd, however, within this "flat" hierarchy of 80-acre farm parcels to see the crystalline new urbanist outlines of the Loma Vista specific plan, redolent of a very different chapter of later 19th Century-early 20th Century history: the garden cities of England, in which entire communities converged on well-defined town centers. Accordingly, the Loma Vista plan centers on the Reagan campus, with a colony of "very high density" homebuilding and high-density homebuilding (brown and tan) surrounded by commercial and office space (violet). Perhaps the master plan designer is a little too fond of the garden city/new urbanist prototypes. At the least, I wonder whether the semi-circle of very-high-density buildings at the center of the plan will look as elegant in elevation as they do in the plan: These footprints promise to become mid-rise or even high-rise buildings, and the semi-circle could end up looking like enormous dolmens in some latter-day Stonehenge. On the other hand, the master planner has oriented these tall buildings around a park or green space — a traditional but very welcome device amid this crush of dense, traffic-spewing development. Maybe the plan of Loma Vista is too urban for Clovis; I can imagine people flying over town at a height of 30,000 feet and mistaking the high school and the housing scheme for a grand civic center. The real trouble with this new urbanist scheme is that it does not go far enough. Once we travel beyond the boundaries of the well-knit center of schools-apartment buildings-commercial space, the formality gives way to conventional suburban site planning. Crystalline order dissolves into oddly shaped blotches and swatches, such as the mid-density residential neighborhood to the immediate east (orange). The contrast between formal and informal planning here looks as incongruous as a picture of the Mona Lisa stuck in the center of a Jackson Pollack canvas. How will developers arrange their two- and three-story apartment buildings on this irregular site? Does this type of planning lead toward orderly streets and boulevards, or the look of scattered bric-a-brac? And, as mentioned before, the master-planned community directly to the southeast may or may not comport to the new urbanist scheme next door. The promise of orderly planning seems to be breaking up all around us. Our disappointment, however, turns out to be relatively minor, when we consider the paseos. By far, these pedestrian pathways are best things about Loma Vista. The planners have designed these tree-covered paths to lie at a 45-degree angle to the rest of the old grid so the paseos have minimal contact with vehicular traffic. Even better, the paseos connect with Clovis' existing network of trails that cut across the farmland immediately east of the city, taking an enviable open-space network and making it even better. The result is a linear park that provides a meaningful offset to the crowding and traffic of high-density development. The formal gizmo at the center of the specific plan may be pretty, but the paseos are the big payoff of Loma Vista. They may not be as dramatic as the meeting of a king and a queen, but this encounter between an old grid and new planning ideas is very good news for Clovis.

The California Redevelopment Association (CRA) is suing the State of California for shifting $350 million in redevelopment tax increment to school districts. The shift was part of the state budget approved in late September (see CP&DR Capitol Update , October 2008). The CRA argues that the shift is unconstitutional under Proposition 1A from 2004, a state funding measure that also included protections for local government revenues. A property rights lawsuit that initially appeared it would cost the City of San Diego nearly $100 million has concluded with the city being awarded $4.3 million in attorney fees. In 2001, a jury awarded developer Roque de la Fuente II $94.5 million for inverse condemnation of his property in Otay Mesa. The jury's award followed a San Diego County Superior Court ruling that planning for an international airport in the area of de la Fuente's business park and the diversion of truck traffic to a new border crossing amounted to a taking of private property because they impacted development of de la Fuente's project. The Fourth District Court of Appeal overturned the inverse condemnation ruling, threw out the $94.5 million award, and sent the case back to Superior Court for a new trial on de la Fuente's claim that the city had breached a development agreement (see CP&DR Legal Digest , November 2006 ). In June, San Diego County Superior Court Judge Linda Quinn ruled for the city, finding that the developer had failed to file a proper claim with the city before filing the lawsuit. More recently, Quinn awarded the city all of its attorneys fees for the nine years of litigation – a total of $4.3 million. Former San Francisco Supervisor Ed Jew has pleaded guilty in federal court to extorting $40,000 from the owners of eight Quickly tapioca drink shops in exchange for helping them get use permits. Jew, who resigned in January after only a year in office, pleaded guilty to mail fraud, extortion and soliciting a bribe. He is scheduled to be sentenced in February 2009. Jew also faces state charges that he lied about living in Burlingame so that he could run for office in San Francisco's Sunset District. A luxury hotel and housing development approved in September by the Healdsburg City Council is headed into court. A group called Citizens for Sustainable Solutions filed a lawsuit in October alleging that the city did not adequately analyze the impact of the Saggio Hills project on water supply, greenhouse gas emissions and aesthetics. Developers Tony Korman and Robert Green propose a 130-room, high-end hotel and 70 "multi-million-dollar" homes on more than 200 acres on the north edge of town. In exchange for project approval, the developers agreed to provide 36 acres and $3 million for a community park, a graded, 14-acre site for affordable housing, $1 million toward affordable housing development and a fire station. The Sonoma County Local Agency Formation Commission still needs to consider annexation of the site to Healdsburg. City officials say the hotel, with rates averaging $700 per night, could roughly double the city's transit occupancy tax revenue to more than $5 million annually. Opponents say their gripe is with the number of large houses, not the hotel. Tuolumne County supervisors have approved a revised plan for the Mountain Springs project. Seven years ago, supervisors approved a 1,500-house subdivision on the 1,100-acre site near Sonora (see CP&DR Local Watch , October 2001 ). When opponents gathered enough signatures to force a referendum election on the project, however, the local investors behind the project asked supervisors to rescind the project's approval. In October, the county approved a 600-home project that also preserves 160 acres of agricultural land and limits the number of second units to 26. Opposition appears to have greatly decreased. The City of Sacramento has finally completed acquisition of decrepit and vacant properties along two blocks of the K Street Mall after decades of conflict and litigation with property owner Moe Mohanna. The city's Housing and Redevelopment Agency will pay $18.6 million for Mohanna's nine properties that line a block and a half of K Street and one block of 8th Street. Although the city has had some success redeveloping the K Street corridor, the stretch of properties controlled by Mohanna have remained underused and in poor repair. The city's redevelopment agency intends to provide some properties to furniture store owner Joe Zieden, who proposes a row of new stores on K Street between 7th and 8th. The agency intends to sell other properties to hotel developer Bob Leach for construction of a 400-room Hilton and a separate mixed-use project. The largest conservation acquisition in Sonoma County history was completed in October, when the Sonoma Land Trust reached an agreement with the owner of the 5,630-acre Jenner Headlands. The trust, local, state and federal entities, and the Gordon and Betty Moore Foundation will jointly pay $36 million for the property, which was owned by a New Orleans doctor and already subdivided into 40 lots. The property is a mix of old growth forest, recently logged lands, grazing lands and 3 miles of coastline. The Land Trust said it would like to make the property a state park eventually. A company called World International LLC has completed its purchase of the Diablo Grande project in a bankruptcy court proceeding. Reportedly controlled by Mexican developers, World International paid $20 million for the 28,500-acre project in the hills of Stanislaus County west of Interstate 5. The project went into bankruptcy in March after the owner, pharmaceutical company owner Donald Panoz, failed to attract buyers. He had been asking $150 million for the project, which is approved for 2,300 housing units, a golf course resort and extensive retail and office space. So far, only 400 houses and two golf courses have been built. The project may be most famous among planners for a 1996 court decision rejecting an environmental impact report because the county postponed a water supply analysis. Critical habitat for the endangered San Bernardino kangaroo rat would be scaled back by 77% under a plan approved by the U.S. Fish and Wildlife Service. The agency in October published its intention to remove 26,500 acres in San Bernardino and Riverside counties from the critical habitat designation, leaving about 7,800 acres along rivers and washes for the species. The change becomes effective November 17. The "K rat" has been the bane of the Inland Empire's development industry for nearly two decades because the endangered species listing has forced lengthy environmental reviews and shut down development in some areas. But while the Building Industry Association of Southern California praised the Fish and Wildlife Service move, the Center for Biological Diversity vowed to sue.

With an economy based on construction, shipping and warehousing, and heavy industry – and with some of the most conservative politics in the state – the Inland Empire would appear to be an unlikely place for a "green" movement. However, a public-private initiative is under way that seeks nothing less than a transformation of the region to one based on green technology and sustainable living. The Green Valley Initiative was launched in 2007 by developer Ali Sahabi, president of SE Corporation. Best known as the developer of Dos Lagos in Corona, a mixed-use project that has won American Planning Association and Building Industry Association awards, Sahabi established the nonprofit Green Institute for Village Empowerment last year. That organization has been the key sponsor of the Green Valley Initiative (GVI), which has since attracted endorsements from more than 25 public agencies and private entities and attracted more than 500 people to various gatherings. "It's really about taking a long-term, holistic, sustainable view of how you change the economy," explained Daniel Cozad, GVI's program director. "I don't think anybody else is attempting to do this on such a grand scale." Doug Henton, chairman and CEO of Collaborative Economics, which has provided research and guidance to the GVI, called the project "more systematic and comprehensive" than green technology and development efforts in Silicon Valley, Sacramento and the San Diego region. "What's intrigued me is that it has brought together the two counties and the business sector," Henton said of the GVI. Still, the San Bernardino and Riverside counties region has a long ways to go before it might be considered a paragon of green virtue. The two counties have grown rapidly to a combined population of 4.1 million people living primarily in low-density, automobile-oriented housing tracts. Green building practices are extremely rare. Trucking, warehousing and railroad companies – which are heavily dependent on burning diesel fuel – employ about 117,000 people in the two counties. Monitoring stations in Perris, Banning and the San Bernardino Mountains report some of the most polluted air in the country. Plus, as Cozad acknowledged, "This is a conservative area – a red portion of a blue state." Although GVI boosters have been attracting supporters, not everyone is rushing toward the bandwagon. As one of the bigger GVI proponents, San Bernardino County Board of Supervisors Chairman Paul Biane has urged all 24 cities in the county to approve a GVI resolution that promises the city will "participate in the development and implementation of sustainable model standards, policies and programs to benefit the Inland Empire region." Thus far, only seven cities in the county have signed on, although more are scheduled to consider the resolution. Biane spokesman Scott Vanhorne called the cities a "mixed bag." "It's a pretty broad concept. Some of them haven't really wanted to bite," he said. "These are business-oriented, conservative cities," added Cozad. "But we have a number of them that see the economic benefits and the quality of life benefits of the green economy." Cozad said the GVI has had to confront confusion and misunderstanding more than skepticism. Some people initially thought the project was an anti-development effort, while others complained the GVI was simply a "greenwashing" of existing practices. The GVI is neither, he said. So what exactly what is the Green Valley Initiative? Organizers offer up this statement: "The Green Valley Initiative reflects a new vision for the Inland Empire, combining sustainable green practices and technology with an economic development plan being developed by major stakeholders from throughout the Inland Empire. It integrates social, economic and environmental forces to bring new jobs, greater opportunities and a higher quality of life to the region." The problem to confront, according to the GVI, is that Riverside and San Bernardino counties lack both enough jobs and the right kinds of jobs. The result is that 30% of region's workforce, including some of the most-educated workers, commute to Los Angeles, Orange and San Diego counties for employment. For San Bernardino County, one big attraction is the development of alternative energy. Kramer Junction Solar Farms, located west of Barstow, is already one of the world's largest solar facilities, and Palm Springs Wind Farms is one of the largest wind energy facilities, noted Vanhorne. Both counties have the natural resources — sun, wind and relatively inexpensive land – to accommodate many more facilities, Cozad added. But the possibilities are almost endless. Southern California Edison, for example, is talking about installing solar panels on top of millions of square feet of warehouse rooftops in the region. Officials overseeing conversion of three large military bases in the region are also quite interested in the effort. This month, GVI representatives are scheduled to meet with leaders of the local shipping, distribution and warehousing industry to talk about greening the distribution system. Although that might seem far-fetched, "green logistics" is the name of the game because of AB 32 mandates for reducing greenhouse gas emissions, and because energy efficiency is crucial to reducing costs, Henton said. And there is no reason why new homes in the region should not have green aspects included, such as solar panels and technologically sophisticated utility controls that minimize energy and water consumptions, Henton said. The idea is to build bridges between the public and private sectors, and between different public agencies, Cozad said. In the past, local governments have fought to protect their turf. Those battles have not all ended, but GVI is trying to get cities and counties to share because they are all part of one region. The sharing may be as simple as promoting common water recycling and drought-tolerant landscaping standards among the cities and two counties. "You wouldn't think of this area of California as being green – on the political side or physically, given the amount of rainfall we receive every year," Cozad said. That's where public education and outreach can be useful in convincing people that changing business as usual is beneficial both environmentally and economically. "I don't know if it's going to be a tough sell," added Vanhorne. "People are seeing what's happened with the price of oil. I think the public's mindset is going to be determined by the market." The GVI in October qualified for federal Economic Development Administration funding. Green Valley Initiative boosters intend to fill out a board of directors and name an executive director in preparation of a "second launch" of the initiative in early 2009. Contacts: Daniel Cozad, Green Valley Initiative, (909) 747-5240. Doug Henton, Collaborative Economics, (650) 404-8120. Scott Vanhorne, San Bernardino County Supervisor Paul Biane's office, (909) 387-4833. Green Valley Initiative website: www.greenvalleynow.org

Planning and Zoning Regulations and Practices Friday, November 14, 2008Figueroa CourtyardDowntown Los Angeles REG # U4339 ($350) This core seminar examines the major land use laws and planning practices affecting California cities and counties, project applicants, and community residents.  Fundamental provisions of State law are examined, including an update on recent court decisions and legislative changes from Sacramento.  The seminar highlights practical "how to" techniques of planning practice, and cross-relates the ever-changing range of subjects making up local land use planning and regulation in California. SEMINAR LEADERS Thomas Jacobson, AICP, JD , is Professor of Environmental Studies and Planning, and Director of the Institute for Community Planning Assistance at Sonoma State University.  He is of counsel to the Sohagi Law Group and a consultant of land use law and planning matters. Mark Winogrond, FAICP , is a strategic land-use consultant to public, academic and non-profit organizations.  He was previously Chief Administrative Officer of Culver City, Interim Director of Planning of LA, and community development director for three Southern California cities. To enroll Call (310) 825 - 9971 or go to www.uclaextension.edu * For more information please call (310) 825-7885

LAFCOs, Cities, and Special Districts: The Challenge of Boundary Changes in the Future FRIDAY, NOVEMBER 7, 2008 UCLA EXTENSION LINDBROOK CENTER LOS ANGELES, CALIFORNIA REG # U4336 ($ 325) This intensive one-day course is essential for anyone involved with land use planning and governmental boundary changes. The evolving laws governing LAFCO and its decisions are not just about LAFCO but the future of California, how it and its communities will cope with population growth, provide adequate services, maintain sustainable communities and protect the State's valuable resources. The course provides an extensive overview of statutes and procedures to reorganize local governments. In addition to being a valuable explanation of boundary change laws and practice, it analyzes requirements to prepare Municipal Service Reviews to periodically update city and special district spheres of influence. No refund after October 31. Seminar Leader: Bob Braitman has been a LAFCO Executive Officer for more than 25 years, an Executive Officer of the California Association of LAFCOs, and is a private consultant to LAFCO, local agencies and private parties. To enroll Call (310) 825 - 9971 or go to www.uclaextension.edu * For more information please call (310) 825-7885

The old joke about the man on the street who asked a scientist for the time and instead got a two-hour lecture about how to build a watch (and the poor fellow never did find out what time it was) was played out again in Sacramento this week when the California Air Resources Board staff released its "Preliminary Draft Staff Proposal Recommended Approaches for Setting Interim Significance Thresholds for Greenhouse Gases" on Friday and presented it in a workshop on Monday. The 20-page document leaves most of the spaces for benchmark numbers blank, while proposing an elaborate process amounting to a new categorical exemption with CARB squarely at the controls. Senate Bill 97 (Public Resources Code, § 21083.05), assigned the Governor's Office of Planning and Research (OPR) the task of revising the CEQA Guidelines by June 1, 2009 to address the conundrum for planners posed by the Global Warming Solutions Act of 2006 (AB 32) in performing environmental review of projects under the California Environmental Quality Act (CEQA). One lawsuit and dozens of EIR comment letters filed by Attorney General Jerry Brown, as well as lawsuits by environmental groups, raised the stakes, while uncertainty remains about many critical questions regarding how the substantive limits set by AB 32 for GhG emissions to be achieved by 2020 should be analyzed under CEQA's long-established procedures and standards. One of the keys to simplifying CEQA review is for the lead agency to set the standards for the effects ahead of time by adopting "thresholds of significance." For purposes of AB 32, is one more molecule of GhG significant? What baseline conditions should be used to assess project effects? Should it be those in existence as of date that the project application is submitted as current CEQA law dictates, or is it some future date, such as 2020 or 2050 when AB 32 goals are to be met? In June, OPR asked CARB for guidance in helping lead agencies determine what the thresholds for GhG emissions should be, perhaps assuming that CARB would provide objective benchmarks and a scientific means to measure or estimate what a given project would likely generate. Instead, the CARB staff boldly proposed preliminary draft conceptual interim "sector-based approaches," which include criteria that are not scheduled for adoption until September 30, 2010. The staff proposal includes the remarkable conclusion that existing statutory and categorical exemptions need not be eliminated because the anticipated effects of such projects would be small (statutory exemptions, among many other projects, include prison construction, pipelines of less than a mile in length and railroad grade separation projects). Staff reported its preliminary determination that the effect of project on a site of 5 acres or less qualifying for an infill exemption (Guidelines § 15332) would not exceed emissions of 1,600 metric tons of carbon dioxide annually, without  providing any evidence or explaining how it reached this conclusion. Does this mean that local agencies could adopt 1,600 metric tons of annual emissions as a threshold of significance for other residential or commercial projects of 5 acres or less?  CARB fails to provide data meeting the legal standard for substantial evidence on which a local agency could independently adopt a "threshold of significance" for GhG emissions as contemplated by existing CEQA Guidelines. Clearly, CARB staff had some threshold in mind when it reached its conclusion about exempt projects. It would be nice if they would tell OPR and the rest of us what it is. The proposal provides examples for two types of projects – industrial and residential-commercial. Industrial projects meeting "interim" performance standards still to be set by CARB for construction, transportation and operations will be presumed to have a less than significant climate change effect, and will be "exempt" from further CEQA review. The operations must have net emissions of less than 7,000 metric tons of carbon dioxide equivalents per year. Again, it would be helpful to know what evidence or methodology CARB used to set this limit.   For residential or commercial projects, two tracks may lead to a presumption the project is "exempt."  One is already established in CEQA Guidelines § 15064 (h)(3), for a determination that the significance of the project's incremental effect is not cumulatively considerable, subject to additional conditions to be set by CARB. The lead agency must find that the project will comply with an approved plan or program to avoid or substantially lessen GhG emissions that is consistent with statewide AB 32 goals and regional transportation impact reduction targets to be established in accordance with SB 375, includes a GhG reduction inventory with regular monitoring, has specific enforceable GhG reduction targets, can be revised over time and was approved in conjunction with an EIR. Of course this begs the question of what level will qualify as "substantial". In the other track, the lead agency must find that the project complies with CARB adopted minimum performance standards "or equivalent mitigation measures" for construction and operations, the latter including four "sub-sources" for energy consumption, water, waste and transportation. For energy consumption, the proposal is to adopt the California Energy Commission's Tier II Energy Efficiency Goal (35% above 2008 Title 24 code standards). The proposal allows that the other performance standards will be more than zero (at least for the time being) and that they will be "clear and stringent," but are expected to become tighter over time. Even if all performance standards are met, the total project emissions may not exceed an annual emissions limit of some unspecified amount of metric tons of carbon dioxide equivalents per year, which CARB has yet to determine – or at least let us in on yet! – Joel Ellinwood, AICP

A 50-year extension of Napa Valley's landmark initiative preserving agricultural land is widely expected to win approval on November 4. While Napa Valley's Measure P provides a ho-hum, it signifies just how much the political landscape has changed during the last two decades. Nowadays, we take for granted that voters have the ability to amend general plans or even write their own plans; initiatives that block development without subsequent voter approval are commonplace. This November's ballot is full of these sorts of initiatives. But it was not always this way.   Slow-growth initiatives have appeared on local ballots in California since the 1970s, and they reached an early peak in 1986, when voters decided 45 local growth measures. These measures often came in the form of annual growth caps, building permit limits and infrastructure requirements. But Measure J in Napa Valley was different. The 1990 initiative was a Napa County general plan amendment that sought to preserve all agriculturally designated land. It did so by preventing any change in agricultural land use without voter approval. No more encroachment of houses, restaurants and B&Bs into the county's prized grape-growing land without voter consent. Growth would have to go into the cities or one of the very small urban nodes in the unincorporated area, unless voters were willing to allow an exception. Measure J was controversial both in substance and style. Builders, landowners and some elected officials campaigned against Measure J. The concept of locking up agricultural land was new and scary to some. The idea that voters themselves could amend a general plan appeared to be based on squishy legal ground. The general plan would no longer be a living, flexible document that the Board of Supervisors could adapt as it saw necessary – something that was either good or bad, depending on your viewpoint. After voters approved Measure J, landowner Richard DeVita and the Building Industry Association of Northern California sued, challenging virtually every aspect of Measure J. The end result was the state Supreme Court's 1995 landmark decision DeVita v. County of Napa , 9 Cal.4th 763, in which a five-justice majority made perfectly clear that voters could amend a general plan and impose subsequent-vote requirements on development.   Slow-growth advocates in Ventura quickly followed up with a Measure J copycat called the Save Our Agricultural Resources (SOAR) initiative, which voters approved. It appeared a revolution was at hand. But if there was a revolution, it has moved in slow motion. Ventura County and nearly all of its cities eventually approved SOAR initiatives . Voters in Sonoma County adopted urban growth boundaries around all the cities. Alameda County voters approved Measure J-style restrictions for the eastern part of the county. But when Measure J copycats in San Luis Obispo County and Sonoma County lost, the revolution appeared to founder . After voters approved Measure D in Alameda County during the November 2000 election, not a single similar, countywide initiative was passed until Stanislaus County voters backed the Stamp Out Sprawl initiative in February of this year. Instead, what we see are initiatives that tinker with general plans, or that block development in certain areas, or of certain types, without voter approval. In Grass Valley, for example, there is an initiative that would prohibit changes to the land use element without voter approval, and a competing initiative that would require voter approval of boundary changes and annexations. San Clemente has an initiative that would prohibit rezoning or development of open space – which may include golf courses – without voter approval.  Measure O in San Marcos would block almost any zoning change without voter approval. Redwood City has a measure that would prohibit development along the bayfront without two-thirds voter approval. You get the idea. Although Measure J may have been more of a turning point than a revolution for California as a whole, it has become political bedrock in Napa County. There is no organized campaign against Measure P, which would extend the provisions originally approved in 1990 through 2058. All five city councils and the county Board of Supervisors have endorsed Measure P. Arguments about the dire consequences of locking up ag land for a long period and killing the hospitality industry have vanished. Now that's a revolution. – Paul Shigley

Little Italy is one of San Diego's most popular neighborhoods today. In some ways a high-priced residential district with an Italian theme, Little Italy also provides an example of what a city can do to restore a down-on-its heels area. Twelve years ago, few had heard of this area north of downtown San Diego. But since the late 1990s, the area has grown and prospered. The Little Italy neighborhood dates back to the 1920s, when the area near the San Diego harbor became home to Italian immigrants who worked for the tuna industry. For years, it was common to see fishermen in the neighborhood spreading out their nets to repair them. Our Lady of the Rosary Church remained a center of community life for Italian Americans, even as later generations moved away. But the fishing industry died during the 1970s, and the area became best known for its many parking lots within walking distance of government buildings in downtown San Diego. One-third of the community was demolished in 1972, when Interstate 5 was built through the area. Thirty-six years later, Little Italy has rebounded, thanks to a real estate boom, creation of a business improvement district and the neighborhood's central location near a trolley line and the downtown railroad station. The numerous parking lots have been converted into housing. More than 1,200 new condos have been built in the neighborhood, and 3,000 new residents have moved in. San Diegans agree that formation of a Business Improvement District (BID) during the 1990s, and run by the private, non-profit Little Italy Association, was a key factor in the area's rebound. The association also runs a Community Benefit District (CBD). The Business Improvement District is funded through business tax licenses in the area and generates $90,000 a year. The Community Benefit District generates $750,000 a year through property assessments. The money from the BID and the CBD are used for maintenance and neighborhood security. The association and its executive director, San Diego native Marco Li Mandri, are the driving force behind new public spaces, landscaping and benches that now make up the streetscape, especially along India Street, the core of Little Italy. An arched entrance sign over India Street was installed in 2000 to mark the neighborhood's renaissance. From eleven Italian-related businesses in the mid-1990s, Little Italy has grown to become home to 19 Italian restaurants, 22 home furnishing stores and 11 art galleries. There's a farmer's market and art walks. In short, Little Italy is a yuppie dream – and it is one without chain stores. "We convinced the community to keep out corporate owners," said Li Mandri. "What people want when they come to a neighborhood business district is that it's not like a thousand other business districts throughout the country." The City of San Diego, which has focused on massive downtown redevelopment during recent years, also played a part in Little Italy's rebirth through its Centre City Development Corporation. The CCDC provided more than $4 million for many of the capital improvements to the streetscape, Li Mandri said. "We get capital improvement money from the redevelopment agency," he said, but the Little Italy Association provides maintenance funding for trees, trashcans, landscaping and new sidewalks. City policy changes have helped create piazzas, which Li Mandri described as wider sidewalks filled with tables, chairs, umbrellas and enhanced landscaping. "They have done no eminent domain in Little Italy," he said. "The market has driven a lot of redevelopment." The CCDC has also subsidized construction of 16 row houses, 12 affordable rental lofts and 37 low- and moderate-income apartments on a block of land the CCDC purchased. Overall, however, the CCDC owns little land in Little Italy. Li Mandri said the area grew during the real estate boom between 2001 and 2006. While the city's real estate market has declined recently, the neighborhood still is considered the most desirable neighborhood in downtown San Diego, he said. Despite the ongoing gentrification, Little Italy still contains a variety of commercial and office buildings, including auto repair shops and a Mexican consulate, according to Michael Stepner, an architect and former city planner. Li Mandri's company, New City America, has taken its lessons from Little Italy to a number of other California cities and worked to spruce up business districts with community benefit districts in San Francisco, Oakland, Los Angeles and San Jose. Not everyone is enamored with Little Italy, although the most common complaint is that an area once covered with parking lots is now one of the most difficult places to park in all of San Diego. "Outside of six or seven Italian restaurants, it's hard to see the relationship to what Little Italy once was, a working class fishing neighborhood" said University of California, San Diego political science professor Steve Erie. "It's another yuppie neighborhood." Stepner predicts that the future focus in the neighborhood will be on the waterfront, which lies a few blocks west from inland India Street. Plans for the waterfront, known as the North Embarcadero area, call for developing parks with direct links to Little Italy. Contacts: Marco Li Mandri, New City America, (619) 233-5009. Steve Erie, University of California, San Diego, (858) 534-3083. Michael Stepner, Stepner Design Group, (619) 234-2112. Derek Danziger, Centre City Development Corporation, (619) 533-7103. Little Italty Association: http://littleitalysd.com SD Redevelopment Leaders Resign Amid Scandals Redevelopment in San Diego suffered a black eye this summer when top officials of two of the city's major redevelopment entities left their jobs under a cloud of controversy. The departure of the officials raised questions about whether the city's program needs an overhaul. San Diego is an anomaly in California redevelopment. Redevelopment in downtown and the adjacent southeastern area are run by non-profit corporations that do not have the same level of public oversight as redevelopment agencies in other California cities. San Diego's redevelopment organizations are based on a model used successfully in such East Coast cities as Baltimore, whose Inner Harbor is considered a national model of redevelopment. The main downtown redevelopment agency in San Diego is called the Centre City Development Corporation (CCDC), while nearby, in a predominantly minority neighborhood, redevelopment is run by the Southeastern Economic Development Corporation (SEDC). The city also has its own redevelopment agency, which focuses on redevelopment projects elsewhere within the city. The structure of the two development corporations is now undergoing review by the City Council after presidents of both resigned. SEDC President Carolyn Y. Smith was forced to leave her job in July because of a scandal involving employee bonuses. The website voiceofsandiego.org first revealed the bonus payments. The city then commissioned an outside audit which reported that Smith had approved $872,000 in extra pay for herself and the SEDC staff from 2003 to 2008, including $89,000 for Smith alone during the 2006-07 fiscal year. The audit said the bonus program amounted to fraud. After Smith's departure, the City Council replaced the SEDC board. Centre City president Nancy Graham left her job in July, too, after she faced questions about conflicts of interest she had in negotiating with developer The Related Cos. Although she has denied any wrong-doing, Graham was charged in September with three misdemeanors by the San Diego city attorney's office. Under Graham's guidance, the CCDC in 2007 chose The Related Cos. from a field of seven bidders for a $400 million condominium and hotel project in the East Village. However, Graham did not reveal until April of this year that she and her former husband once formed a partnership with Related to develop a condominium project in Florida. According to the city attorney's office, Graham received nearly $3 million in income from the Florida development in 2006 and 2007. However, she never reported the income in conflict-of-interest statements. In September, the CCDC board canceled its negotiating agreement with Related. San Diego's downtown redevelopment has led to a boom in the area, with numerous office towers, hotels and restaurants opening in recent years, along with Petco Park baseball stadium and downtown shopping. But critics have contended that not enough emphasis has been placed on the city's public spaces and buildings, including replacement of an outdated downtown library. SEDC focused on building more shopping, housing and adding jobs in its region. Michael Stepner, a downtown planning consultant, said some of the recent personnel problems were related to the individuals, and not the set up of the two corporations. "The need for people doing the right thing doesn't change," he said. University of California, San Diego professor Steve Erie calls the two corporations "a wonderful thing for developers," because there is less public oversight. But Derek Danziger, a spokesman for CCDC, said downtown redevelopment has been a success, with the area generating millions of dollars for the city, Danziger said a primary focus during recent years has been on public infrastructure. Redevelopment money has been set aside for a new library, for example, but private fundraising efforts need to be successful before the library project moves further, he said. Stepner said redevelopment in San Diego may change over the next six months, as the city government begins debating the future of the two corporations. The City Council is considering whether the two corporations should be merged back into the city's redevelopment agency, and whether the redevelopment agency should run more like agencies in San Francisco and Los Angeles. Another options being considered is for the City Council to directly hire and fire the president of the development corporations, Danziger said.

The California Fish and Game Commission must consider listing the California tiger salamander on the state endangered species list, the Third District Court of Appeal has ruled. The court determined that the Commission should have accepted a petition filed by the Center for Biological Diversity (CBD) and considered adding the salamander to the list of species protected by the California Endangered Species Act (CESA). "The Commission acted outside the range of its discretion in denying the petition," the court concluded. Although the ruling was a victory for the environmental group, it was a blow to the development industry, landowners and local governments that for years have fought restrictions and struggled to accommodate the amphibian (see CP&DR Environment Watch , February 2006 , July 2004 ). California tiger salamanders historically lived throughout the Central Valley and the foothills of both the Coast Range and the Sierra Nevada. The species extended from Colusa County in the north to Tulare and Santa Barbara counties in the south. The salamanders breed in large seasonal ponds (vernal pools) and spend the rest of their lives within about a quarter mile of their breeding ponds. However, about 80% of the state's vernal pools have been lost to farming or urban development. Several of the salamander's distinct population segments are listed under the Federal Endangered Species Act (ESA). Five years ago, CBD submitted its petition requesting the listing for the California tiger salamander. Under the state law, the Department of Fish and Game evaluates a petition and other relevant information, and prepares a report and recommendation for the Fish and Game Commission. That panel then decides whether to accept the petition and commence a 12-month process to decide on the listing, or to reject the petition. The department staff recommended the Commission accept the petition. During a 2004 hearing, Brad Shaffer, a University of California, Davis, ecology professor and salamander researcher, testified about threats to the species, including hybridization with an imported species of salamander, loss of habitat, and competition and predation by nonnative fish and bullfrogs. Shaffer estimated there were about 4,500 breeding female California tiger salamanders remaining. The Central California Tiger Salamander Coalition, composed of development and business interests, argued against the petition. The coalition countered much of Shaffer's testimony about habitat loss, estimated the species population was as high as 700,000 to 800,000, and argued the species had adequate protection. The Commission voted 3-2 to reject the petition. It found there was insufficient information on population trends, there was credible evidence the population was not declining, testimony on loss of native wetland habitat was unpersuasive, there was insufficient information about the degree and immediacy of threats to the species, and existing protections through the federal Endangered Species Act, the Clean Water Act, the state's Porter-Cologne Act and the California Environmental Quality Act were adequate. The CBD then sued, and Sacramento County Superior Court Judge Lloyd Connelly in December 2006 ruled against the Commission. On appeal, a unanimous three-judge panel of the Third District upheld Connelly's decision. Under the Fish and Game Code and Natural Resources Defense Council v. Fish & Game Com. , (1994) 28 Cal.App.4th 1104, the standard for accepting a petition for consideration is "sufficient information to indicate that the petitioned action may be warranted," the court noted. The term "sufficient information" is defined as that which "would lead a reasonable person to conclude the petitioned action may be warranted." The term "may be warranted" means that there is a "substantial possibility" the listing could occur. The term "substantial possibility" means a greater chance than a "reasonable possibility." The court found that the CBD petition and supporting information easily passed these tests. " he information supporting the petition presents a prima facie showing that the California tiger salamander species is a threatened or endangered species within the meaning of the CESA," Third District Justice Kathleen Butz wrote. "The points raised by the Commission, concerning the strength of the information in favor of the petition, would not lead the objective, reasonable person to conclude there is no substantial possibility that listing could occur." The coalition countered only some of the points in support of the petition, the court determined. In addition, the Commission did not address the threat of hybridization or show why a dual listing under CESA and the federal ESA was not warranted in this case when 177 species already have dual protection, the court concluded. The Commission has asked the state Supreme Court to overturn the Third District. Assuming that does not happen, the Commission will have one year to decide whether to list the salamander as threatened or endangered. In the meantime, the species must receive the same level of protection the listing would provide. The Case: Center for Biological Diversity v. California Fish and Game Commission , No. C055059, 08 C.D.O.S. 11650, 2008 DJDAR 13889. Filed September 2, 2008. The Lawyers: For CBD: Amy Minteer, Chatten-Brown & Carstens, (310) 314-8040. For the commission: William Cunningham, attorney general's office, (916) 445-9555.

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

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