Location, location, location. Those are the three most important factors in real estate, and — as evidenced late last month — in land use decision-making. On a 10-5 vote, the Los Angeles City Council on March 19 directed the Planning Department to stop processing the application for Las Lomas, a project that proposed 5,500-housing units, 2 million square feet of office space, 225,000 square feet of retail space, a hotel and a school on 555 acres at the junction of Interstate 5 and the Antelope Valley Freeway. A little more than a week later, the Delta Protection Commission voted 11-6 to reject a proposed mixed-use project on a 105-acre former sugar beet processing plant in the unincorporated Yolo County town of Clarksburg. So, that's one vote against a very dense project in the most urbanized area of the state, and one vote against a modest redevelopment project in a rural riverfront town. The problem? Location. The Las Lomas site is extremely rugged and located next to two clogged freeways. The Clarksburg sugar mill lies in the Delta's protected primary zone. Both projects have merit. The Las Lomas plan is extremely efficient, squeezing a mix of uses onto about 270 acres above a proposed MetroLink station. The sugar mill project would bring 123 homes and new industry to a site that has sat largely vacant for 15 years. Las Lomas is proposed for what is now unincorporated territory between Santa Clarita and the Los Angeles. The developer, Palmer Investments, fought off Santa Clarita's attempt to annex the territory urged Los Angeles to take control (see CP&DR Local Watch , January 2004 ). However, in 2006, the county's Local Agency Formation Commission told Palmer to file a new application for annexation to the City of Los Angeles after the city completed an environmental impact report. With funding from Palmer, city officials and consultants have been reviewing the plan and working on the EIR since 2002. For reasons that are unclear — at least to me — things came to a head last fall, even though the EIR remains incomplete. Los Angeles City Councilman Greig Smith released a "white paper" making clear he thought little of the project. Traffic that Las Lomas would generate on I-5 became a rallying point for project opponents, who already included the City of Santa Clarita and environmentalists. Palmer thought little of Smith's white paper and enlisted the support of Councilman Richard Alarcon. But the concern about traffic was apparently too much for the council majority. The next step is probably the courthouse, which is where most projects of this magnitude wind up anyway. Clarksburg is not Los Angeles. Although it is located less than 10 miles from Sacramento and Elk Grove, Clarksburg feels a long ways away. The Sacramento riverfront town is surrounded by pear orchards and vineyards. Last year, the Delta Protection Commission rejected the sugar mill redevelopment, which would be the first significant urban development within the Delta's "primary zone" since it was designated in 1992 (see CP&DR Local News , February 2007 ; Environment Watch , January 2007 ). Developer Carvalho-Stanich Properties reworked the project, primarily by reducing the number of housing units from 162 to 123, and returned to the Commission. At its March 27 meeting, commissioners said they were satisfied with an increased buffer between the new homes and agricultural operations. But the project would increase population density within the primary zone, which the Delta Protection Act prohibits, the commission concluded. What the decision means for the commercial redevelopment is unknown. The commission appears comfortable with that portion of the project because it involves no housing in the floodplain. But the developer has said it needs the housing component to fund the other projects, which are pretty nifty. There are already five wineries operating at the old sugar mill , and there are plans for restaurants, agricultural processing, artists space and a Delta visitors center. In short, approval of new houses in the fragile Delta, right next to an iffy levee, just isn't going to happen right now. It's the wrong location. — Paul Shigley

When individuals barter, they generally have a firm sense of underlying value, i.e. "What's this thing really worth to me?" A 10-year-old car might be worth $1,000, to judge from the Recycler or Craig's List. At $20,000, a used car is a bargain only if it is a 1949 Ferrari Spider with the original piping on the seats. Cities, on the other hand, often appear not to have a sense of "beyond this price we will not go." True, they bargain for big things on which it is hard to pin values, such as stadiums for NFL football and professional soccer. Still, the fact that cities are willing to entertain highly aggressive offers suggests to me that some city officials have a hard time drawing a line between a good deal and a bad one. I am not stating unequivocally that two pending deals for sports stadiums in two cities in Santa Clara County are bad, but both give me the shivers. In one case, a developer is asking a king's ransom from a middle-sized town for the privilege of putting a National Football League stadium in its midst. In another, a developer has proposed a novel quid pro quo: He promises to build a $100 million soccer stadium, if the city agrees to rezone a large industrial tract so the same developer can build housing. For 100 points, write an essay comparing and contrasting these two deals, telling us which is worse, and why. Let us start with the offer that the San Francisco 49ers have put before the City of Santa Clara, a community of 114,000 people. The NFL football franchise has asked the city for up to $230 million in subsidies, including a $42 million garage with nearly 20,000 parking stalls, for a new stadium. Even if the city wanted to, however, it probably can't cough up that much. Santa Clara has about $70 million of bonding authority left, according to Deputy City Manager Carol L. McCarthy. When you add tax increment and sales tax to that, the largest possible package would be about $136 million, she adds. (For a sense of scale, the city's general fund is only $147 million.) The city could raise some additional money by creating a 2% assessment district on eight of its largest hotels that would be layered atop the existing "bed tax" of 9.5 percent. That district could yield up to $35 million a year for the stadium. The rationale for this assessment district, of course, is a consultant's report saying that the 49ers will bring the city $1 billion of business over the next few decades. In attempting to set a new world record for chutzpah (I mean cold-blooded outrageousness) the team has also asked the city to contribute the land for the stadium. (I asked Ms. McCarthy if the 49ers want the Santa Clara City Council to play their road games for them, too. "That's you saying that, not me," was her wise retort.) The city has refused the land deal, because it makes a tidy sum in land leases. In the other deal under discussion here, sports team owner Lew Wolff has been looking for a place for his soccer franchise, the San Jose Earthquakes, to play. Being a brilliant real estate developer, Wolff has come up with a creative concept: He will build the city the soccer stadium using revenues from a 1,300-home development in the city's suburban Edenvale district. However, Wolff needs the city to rezone 74 acres of industrial land for his housing development. That sounds equitable, on its face. The project will "pay for itself," and few, if any, public subsidies will be required. A recent city report, however, finds some financial flies in the ointment. The site to be rezoned is in a redevelopment area, so all increases in property taxes, the primary fiscal benefit of home building for cities, will go to the redevelopment agency, not the city's general fund. Also, research has shown that housing becomes a net loss for cities after about 15 years, meaning that the cost of providing services to mature neighborhoods generally exceeds the amount of property tax revenues they generate. For me, however, the most distributing part of this deal could be put in the form of a rhetorical question: Since when does a city barter away its general plan just because a developer waves a bauble in front of it? Actually, most cities in California would submit to this sort of offer. They remind me of that scene in Ghost Busters, when Sigourney Weaver is trying to seduce Bill Murray. He demurs, telling her his company has rules against employees fooling around with clients. Predictably, he weakens quickly. "They're not rules, actually," he says. "They're more like guidelines." Perhaps I am over-reacting. With 6 million square feet of undeveloped land zoned for industrial development in north Coyote Valley, San Jose is not exactly begging for industrial land. Still, the city has an existing policy not to rezone its industrial land for home building (see CP&DR , November 2007 ). Why should the city trash its own policies for a single, non-essential project? Good heavens, San Jose. Get a hold of yourself! If you want a soccer stadium, then assemble the land and issue an RFP to build the facility, you silly municipality! Do not cut off your nose so you can buy lipstick and mascara. In evaluating these two deals for relative badness, I confess I am almost stuck. I dislike subsidies on principal. My motto is: No socialism for sports magnates. The deal that really gets under my skin, however, because it exemplifies so much that is wrong with planning in California, is the soccer stadium proposal in San Jose. True, the city does not spend its own money; San Jose merely bargains away its ability to do long-term land-use planning and economic development. Opinions may vary, but I find that trading away the powers of governance for a handful of beans is actually worse than throwing money at rich people. Therefore the San Jose deal is the worse deal, from my perspective. Hopefully, it's not too late for either city to get out. I know that stadiums are catnip for voters. But get a grip, city fathers! No deal is worth all of your remaining bonding authority, nor your ability to make land-use decisions. Unless, of course, it's a really nice stadium with a luxury box for planning journalists.

The California Supreme Court has depublished an eminent domain case from San Diego County on the question of when to value property taken by the government. The state high court's depublication order was actually the court's second pass at the eminent domain case, which involves the San Diego Metropolitan Transit Development Board's taking of property to build the Mission Valley East trolley line. In 2005, the Fourth District Court of Appeal ruled that the proper date for valuing property taken from one property owner was the date the eminent domain trial started. The transit board contended the valuation date should have been a year and a half earlier, when the board deposited probable compensation with the court. Later, in a different case, the state Supreme Court ruled that in "quick take" proceedings, such as the one used by the transit board, property should be valued on the date the government deposits probable compensation with the court. ( Mt. San Jacinto Community College District v. Superior Court , (2007) 40 Cal.4th 648; see CP&DR Legal Digest , April 2007 ). The Supreme Court directed the Fourth District to reconsider its decision in light of Mt. San Jacinto . The Fourth District did so but determined that Mt. San Jacinto did not apply because the transit board's deposit was so much less than the jury ultimately awarded the property owner (see CP&DR Legal Digest , February 2008 ). The board had originally deposited $79,000 in 2001, then increased the amount to $300,000 just before the trial started in early 2003. The jury awarded the property owner $1.1 million for the property, plus another $1.3 million for other takings and damages. The transit board asked the state Supreme Court to overturn the appellate panel, but only Justice Joyce Kennard voted to hear the case. Instead, the court ordered the decision depublished, meaning it may not be cited as legal precedent. The case is San Diego Metropolitan Transit Development Board v. RV Communities , No. S160495.

The state Supreme Court has accepted for review a Clean Water Act case involving a power plant along the Monterey County coast. The case concerns water discharge permits for the Moss Landing power plant, which Duke energy rebuilt and expanded. In late 2007, the Sixth District Court of Appeal upheld permits issued by the Central Coast Regional Water Quality Control Board over the objection of environmentalists (see CP&DR Legal Digest , March 2008 ). Much of the challenge concerns the board's comparison between the expense of implementing "best technology available" versus the environmental benefits of such technology. Environmentalists want Duke to employ a closed system that recirculates water for cooling, but the water board approved Duke's less expensive "once-through" cooling system that involves pumping water from Elkorn Slough through the plant and discharging the heated water into the ocean. The state high court postponed any action in the case until the U.S. Supreme Court decides whether or not to review a Second U.S. Circuit Court of Appeals ruling that the Environmental Protection Agency may not consider the cost of implementing best technology available. Utilities in three combined cases have asked the federal high court to overturn the Second Circuit. The EPA, which also disagreed with the Second Circuit, has asked the Supreme Court not to accept the cases until the agency completes further administrative proceedings. The cases at the U.S. Supreme Court are Entergy Corp. v. EPA , No. 07-588, PSEG Fossil LLC v. Riverkeeper, Inc. , No. 07-589, and Utility Water Act Group v. Riverkeeper, Inc. , No. 07-597. The state Supreme Court case is Voices of the Wetlands v. State Water Resources Control Board , No. H028021.

Do ya think that the California redevelopment crowd might be a little nervous? It sure seems that way, and here's why: • Under a state law passed in 1993, some of the oldest redevelopment project areas will have to start going out of business next year. • The state has a $16 billion budget deficit and the state's finance wonks are eyeing redevelopment's tax increment money – the property tax revenues generated inside redevelopment project areas. • Proposition 98, which would put the brakes on eminent domain , is on the June ballot. The redevelopment folks are spending a lot of time campaigning against the measure. • On top of everything else, redevelopment agencies have to solve the subprime mortgage crisis too? That last one is a maybe. But redevelopment officials are working with legislative leaders on an approach that might help homeowners at risk, and also convert some of the housing units caught up in the subprime crisis into affordable housing. That was the word last week from the California Redevelopment Association conference in Anaheim. A quarter of all troubled subprime loans are in California, as CP&DR Senior Editor Morris Newman pointed out during a panel discussion on the housing crisis. And redevelopment agencies are government organizations that are in the real estate business and understand housing finance. They have a bunch of money to throw at the problem – almost $2 billion in unspent housing set-aside money, according to the latest estimates. ("Housing set-aside" money is the 20% of all tax increment funds that redevelopment agencies must typically set aside for affordable housing.) And redevelopment agencies maybe actually have skin in the game, because the subprime crisis is hollowing out many poor and working-class neighborhoods where redevelopment agencies operate. So the redevelopment establishment has been working with Speaker Fabian Nunez and others in the Legislature to craft a bill that would give redevelopment agencies a role in the subprime bailout. The ideas being kicked around would actually allow redevelopment agencies to do what other real estate investors do – pick up mortgages and property cheap in a crisis – and then place affordability covenants on the properties involved. At the CRA conference panel, Jim Kennedy, director of the Contra Costa County Redevelopment Agency, and John Shirey, head of the California Redevelopment Association, outlined AB 2594, sponsored by Nunez and Gene Mullin, D-South San Francisco. They said redevelopment agencies are likely to focus on two things: • Pre-foreclosure assistance, where agencies might acquire mortgages or make low-interest loans to homeowners at risk – in exchange for long-term affordability covenants • Post-foreclosure acquisition, where agencies might purchase bank repos and convert them into affordable units. One big question is whether agencies might be able to use money other than the 20% housing set-aside money – funds that must by law be used inside project areas – to purchase foreclosed homes outside project areas. Lisa Stipkovich, executive director of the Anaheim Redevelopment Agency, said this is an issue because the subprime crisis affects not only poor neighborhoods inside project areas, but many brand-new subdivisions. A lot of redevelopment folks seemed nervous that if the bill passes, it will mandate that redevelopment agencies assist in the subprime bailout. Shirley insisted that the CRA's position is that the bill will create a voluntary role with maximum local flexibility. But the bill may also be insurance against a state raid on redevelopment money. After all, how can the state balance its budget on the backs of the redevelopment agencies when the redevelopment agencies are bailing out homeowners? — Bill Fulton

The Interstate10 corridor southeast of San Bernardino has served as a relief valve for Los Angeles metropolitan growth during recent years. But the recent real esate slowdown has hit the Beaumont-Calimesa-Yucaipa area hard, partly because of developer bankruptcies and other financial troubles, and partly because of questions about water. In the City of Beaumont, which has more than 20,000 housing units on the books in approved master plans and specific plans, residential construction has dropped by two-thirds since 2006, according to Community Development Director Ernest Egger. In Calimesa, two projects with a combined 7,000 units halted, and the developer of one of those projects has gone bankrupt. In Yucaipa, completion of a 1,200-acre specific plan has slowed partly because the local water district has withdrawn a water supply guarantee. And in the unincorporated Cherry Valley, locals continue to fight most any growth proposal. For decades, the dusty towns along I-10 between Redlands and Palm Springs offered little besides large lots, mobile home parks, freeway gas stations and expansive views of the San Bernardino and San Jacinto mountains. With the housing boom of the late-1990s, however, came growth pressure. Beaumont and, to the east, Banning (which has a large Del Webb retirement community), have welcomed growth, and Calimesa has sought to get its share as well. In Yucaipa, politics have leaned toward slow growth, but the pressure may be greatest because of its location nearest to the San Bernardino urban area. According to a study by Forbes magazine, Beaumont was the sixth fastest-growing suburb in the country from 2000 to 2006, when its population rose from 11,549 to 26,625. Only the Sacramento suburb of Lincoln grew faster in California. Now, the housing market has slowed dramatically in Beaumont. In addition, developer SunCal has a number of large holdings in Beaumont, and SunCal's projects have stalled before they even got started on the ground, Egger said. When those projects and others in master-planned areas might break ground is unknown. "The planning process is still going on for a number of things," Egger said, noting that construction of one large commercial center is starting, and two other retail projects are in the entitlement process. "We've all seen these market cycles. We're prepared to ride it out." Calimesa has little choice but to ride things out, too, although the ride might be longer and bumpier. Oak Mesa Investors and Buffalo Land Developments, which together have entitlements for nearly 3,500 residential units on 1,500 acres in Oak Valley, have declared bankruptcy. SunCal, which, as Egger noted, is not moving on much these days, is another major player in Oak Valley. Oak Valley is Calimesa's major growth area. Just across I-10 from most of the existing town, Oak Valley is planned to have roughly 10,000 housing units and a new mixed-use town center. (Another 3,000 units are planned in the Beaumont and unincorporated Riverside County portions of Oak Valley.) Calimesa has big hopes for Oak Valley and has conducted thoughtful planning, Community Developer Director Gustavo Romo told CP&DR in late 2007. "We hope that when things all get done, people point to Calimesa like they do Irvine, because of our trails and open space and wildlife corridors," Romo said. In the meantime, though, the city is wrestling with a major budget shortfall caused partly by building permit and planning fee revenues that are $350,000 less than expected. Calimesa is also impacted by the Yucaipa Valley Water District's re-evaluation of the way it manages water resources. Officials for the district, which serves Calimesa and Yucaipa, are working on a water sustainability program that could be reviewed by the board of directors as soon as this month. "Last summer, we were telling customers conserve, conserve, conserve. At the same time, we were saying there's water for new development," said YVWD General Manager Joseph Zoba, who was struck by the incongruity. When a judge's order temporarily silenced State Water Project pumps in the Bay Delta last summer, the district decided to start planning more aggressively, as the SWP supplies part of the district's water. The district rescinded water supply assessments, including one for Yucaipa's 1,234-acre freeway corridor specific plan. The water sustainability program will contain concepts ranging from conservation guidelines to requiring dual plumbing so that new homes irrigate landscaping with recycled water, Zoba said. The program may also require that development proponents pay up front for 50 years worth of SWP water delivery and provide assurance the water will actually materialize — a requirement that could apply to a project of any size. "It's going to stifle development in the short-term. The trade-off is that we provide a road map for the long-term," Zoba said. "There are scenarios where the Delta could be down for 18 months, 3 years. No other water district is prepared for that." The water district's move should not have been a surprise. In 2005, the San Timoteo Watershed Management Authority, composed of YVWD, the Beaumont-Cherry Valley Water District, the South Mesa Water Company and the City of Beaumont, reported that "research revealed daunting water resource management challenges and opportunities." "Currently, the proven local water supplies for the area are about 32,000 acre-feet per year, and ultimate demand will be about 99,000 acre-feet per year," the authority reported in its Integrated Regional Water Management Program. The program recommends capturing surface water, better managing groundwater, water recycling and other steps that could cost $200 million to $300 million to implement. Still, the YVWD rescission of the water supply assessment has complicated what was already a controversial specific plan effort in Yucaipa. City officials see the freeway frontage as the last chance for development of commercial centers that could stem sales tax leakage, said John McMains, Yucaipa community development director. After public protest against more intensive alternatives, the city has pretty much settled on a plan for about 1,500 housing units, 160 acres for regional commercial development, 15 acres of community commercial and a 40-acre business park. More than 500 acres would remain open space. The city is considering designating additional land in the specific plan area for 900 units of high-density housing to meet regional fair-share requirements. Plan and EIR revisions are underway, said McMains, who is closely monitoring the water district's program. Meanwhile, Cherry Valley, a slice of unincorporated Riverside County adjacent to both Calimesa and Beaumont, remains the growth holdout. Residents have fought growth since the 1970s and continue to battle annexations and county redevelopment overtures. Contacts: John McMains, City of Yucaipa, (909) 797-2489, ext. 231 Gustavo Romo, City of Calimesa, (909) 795-9801, ext. 229 Ernest Egger, City of Beaumont, (951) 769-8520, ext. 327. Joseph Zoba, Yucaipa Valley Water District, (909) 797-5119. San Timoteo Watershed Management Authority: www.stwma.org

The feds influence planning and development in California only indirectly. Environmental regulation such as the Endangered Species Act and the way money is spent, especially on transportation, help shape the landscape. It has been a long time since that influence has changed. But in the next 12 months, two federal bills are likely to chart the federal course for the next decade or longer. For starters, there is the transportation reauthorization bill, which comes up every six or seven years. Recent incarnations have been known by some variation of the phrase "TEA." We've had ISTEA, TEA21, or SAFETYLU. Transportation will be up again for reauthorization next year. Then there's the possibility of federal climate change legislation. Currently, the leading bill is the Lieberman-Warner Act, S.2191. It's being debated this year, but it probably won't become law until 2009 – when there's a new president. Members of the planning and development community naturally are focused on transportation reauthorization legislation. But people interested in land use might better spend their effort trying to influence the climate change bill, which could have the broader reach. Both of these bills are supposedly about policy. The TEA bills lay out federal transportation policy for both highways and public transit. The revolutionary nature of ISTEA in 1991 – though it was signed by President George H.W. Bush as a "jobs bill" during an economic slowdown – was that it de-emphasized new highway construction for the first time. The climate change bill is likely to set a national cap for greenhouse gas emissions, which would definitely be a new policy. Ultimately, however, both bills are about money – and how they turn out will largely drive the federal role in planning and development (at least on the urban side, if not on the environmental side) over the next several years. The TEA bill is the gravy train that the entire American system of transportation rides on. The bill typically lays out the policy framework the feds use to hand out billions of dollars of federal transportation dough per year. The last bill directed more than $20 billion to California (see CP&DR Public Development , September 2005 ), including more than $700 million in earmarks to Kern County. (It was mere coincidence, of course, that Rep. Bill Thomas (R-Bakersfield) was chair of the House Ways & Means Committee at the time.) This time out, however, earmarks are unlikely because they're out of fashion in Congress. And there's not likely to be all that much in the way of gas tax revenue, either. The higher the price of gas rises, the more gasoline consumption goes down, because people buy higher-mileage cars and drive less. And like its state counterpart, the federal gas tax is a flat amount – 18 cents per gallon or so – which means that it doesn't rise upward with gasoline prices. As a result, the gravy train isn't likely to have a whole lot of gravy in it over the next few years. In fact, both the Highway Trust Fund and the federal transit program are likely to be many billions of dollars short of what they need to meet even current obligations. So it might be a little tough to use the next TEA bill to usher in sweeping policy change, as many of the environmentalists and smart growthers would like. Many environmentalists are trying to get the next transportation bill to be named, "GREEN TEA." But that's already been nixed by Barbara Boxer, the California senator who chairs the Environment and Public Works Committee. "If I use the word ‘green,' Inhofe won't support it," she said recently. (The ranking Republican on the committee, Sen. James Inhofe (R-Oklahoma) argues there is no such thing as global warming.) One possibility that's often kicked around is a "VMT tax" – that is, a tax on driving, rather than a tax on gasoline. That would more accurately serve as a "user fee" and Boxer has expressed interest in it. But environmentalists – especially those focused on energy efficiency and global warming – fear that a VMT tax would eliminate the incentive for consumers to buy fuel-efficient cars. Which brings us to Lieberman-Warner. Yes, it's a climate change bill that's likely to be policy-based. As written, Lieberman-Warner will cut carbon emissions by 80% by 2050, and it will create a national cap on greenhouse gas emissions in order to achieve the goal. In the process of doing so, however, it will create the next big federal gravy train. As it is currently written, Lieberman-Warner would not simply give away the "right to pollute." For some sectors, such as electricity generators, the bill would require the federal government to auction off "emission allowances" to the highest bidder. That will bring in billions and billions of new federal dollars per year. One estimate is $4.5 trillion by 2050. Everybody agrees changing land use patterns is part of the solution in reducing greenhouse gas emissions, but it remains to be seen whether much of the allowance auction money will make its way toward the world of planning and development. Currently somewhere between $500 million and $1 billion per year is earmarked for public transportation – most of it, apparently, for "new starts" of rail lines in large cities. This is either a lot or not much, depending on how you look at it. Boxer has said that this is an impressive amount. But, as I reported in a recent blog , Beth Osborne, an aide to Sen. Thomas Carper (D-Delaware) warned that transportation and land use are unlikely to get much federal money for climate change because the electric utilities and coal companies are doing a better job of lobbying Congress. "Impacted industries such as utilities, coal, and manufacturing have been extremely aggressive about making their case to us about the help they need to meet these standards," Osborne told the American Public Transit Association. "We've provided funding support to meet those standards. Noticeably absent from the debate is driving and transit alternatives – transportation interests have not been engaged in this climate change bill." And it's true that the buzz in Washington, D.C., in transportation and smart growth circles revolves around the TEA bill. All the interest groups are gearing up for a big lobbying effort next year. But considering the fizzle in gas tax revenues – and the trillions emerging from carbon regulation – maybe the planning and development world would be better served by focusing on the Lieberman-Warner bill instead.

After five years, a planning effort for a new growth area in south San Jose has halted because a coalition of developers has ceased funding the effort. Coyote Housing Group, which includes Shapell Homes, Citation Homes and other developers, announced in mid-March that it would suspend funding for work on the Coyote Valley specific plan. The group cited the "extremely complex planning process" and complications with existing industrial entitlements in North Coyote Valley. "Given these circumstances, there is simply too much uncertainty surrounding the plan and the market to continue as is," said Chris Truebridge, president of Shapell Homes. "It means that we're done," said Laurel Prevetti, San Jose's assistant planning director. "The city does not have the money to complete the specific plan process." Coyote Valley is a swath of about 7,000 acres of mostly undeveloped farmland and open space along Highway 101 in South San Jose. The city has already approved 6.6 million square feet of industrial development in North Coyote Valley. The specific plan process was intended to incorporate the development of 25,000 housing units in an integrated community with the industrial job centers. Development of Coyote Valley is controversial with environmentalists, south county interests and some San Jose community activists who fear an emphasis on the area could shift services away from existing neighborhoods. The planning process started in 2003 and the Coyote Housing Group reported it has spent $17 million on planning. Although the specific plan and an environmental impact report remain incomplete, development of the industrial areas could go forward at any point, according to Prevetti. Prevetti said the city will use some of the specific plan information and analysis in a comprehensive general plan update, which commenced last year. In addition, work on the Coyote Valley specific plan provided lessons regarding mixed use, urban school siting and parks that can be incorporated into planning other parts of town, she said.

It looks like the 2009 Los Angeles mayoral race has begun. And it looks a lot like the 1989 race. In the role of an incumbent determined to bring L.A. to the next level as a "world city" – the Tom Bradley role -- is Antonio Villaraigosa. And in the role of a crusading neighborhood activist seeking to protect the city from overdevelopment – the Zev Yaroslavsky role – is, well, Zev Yaroslavsky. Mayor Villaraigosa and L.A. County Supervisor Yaroslavsky have been sniping at each other over the densification of L.A. for weeks now. It began when Yaroslavsky got exercised about how Villaraigosa's planning department was increasing densities all over town – often in clever, technical end-runs around Zev's Prop. U, the 1986 initiative that cut densities in half on most commercial strips. This led the L.A. Weekly to run a snarky article about Antonio's "density hawks" – Planning Director Gail Golberg and Jane Blumenfeld, one of her chief policy deputies. Then L .A. Times columnist Steve Lopez, the Southland's king of snark, trailed Zev for a day and watched as the supervisor was shocked – shocked! – that taller buildings are being built in L.A. Though he's usually been pretty vocal about "elegant density," the mayor laid low through all this, apparently fearful of getting swift-boated on the density issue. But on Thursday he fired back strongly – without mentioning Zev by name – at the Regional Transit Summit sponsored by the Southern California Association of Governments . Villaraigosa framed his lunchtime remarks around his support of the "Subway to the Sea" and advocated for a third half-cent sales tax in L.A. County for transportation. "This is what a great metropolitan region must do," he said. Villaraigosa also went after the anti-development crowd by saying, "You can't oppose every development in the city," and claimed that when his own constituents complain about gridlock, he challenges them to get out of their cars and take the bus or the train. "We can't all complain about traffic as we drive two blocks to the market and wonder why there's gridlock," he added. Um, I think we've been here before, as I documented in my chapter on Bradley and Yaroslavsky in The Reluctant Metropolis . Back in 1987, shortly after Zev's slow-growth initiative passed, Bradley declared: "All cities must grow to survive and prosper. Every city that has ever tried to do otherwise has died." Meanwhile, Zev, then a city councilmember from the Westside, was boasting to the Los Angeles Times : "From the day I walked into this office … we have done nothing but roll back and impose limitations on development rights on every single commercial street in my district." It was clear that Zev's intent in sponsoring Proposition U in 1986 was to set himself up as the slow-growth alternative to Bradley in the 1989 mayoral race. Of course, as the yarn unfolded over the next couple of years, Bradley turned out to be a much more skilled politician than Zev was. He seized on Zev's support of the Westside Pavilion shopping center to outflank Yaroslavsky on the slow-growth front, thus forcing Zev out of the race, and won a fifth term easily. Villaraigosa is surely not unmindful of history. At the SCAG event on Thursday, he referred several times to Bradley's longstanding support for a subway in L.A. And in a rare moment of humility, he called Bradley "the greatest mayor in the history of Los Angeles." But what will Antonio do next year? Will he take a page from Bradley's book and outflank his opponents as a slow-growther? Or will he decide that the 21st Century is a different era in L.A. – and conclude that challenging his constituents to ride the bus will help him get re-elected? -- Bill Fulton

An air pollution fee on new development in the San Joaquin Valley has been upheld by a Fresno County Superior Court. Judge Donald Black rejected numerous arguments against the fee in a lawsuit filed by the California Building Industry Association (CBIA), the Modesto Chamber of Commerce, Valley Taxpayers Association and affordable housing developer Coalition of Urban Renewal Excellence. The San Joaquin Valley Unified Air Pollution Control District adopted the "indirect source" fee (also called Rule 9510) in December 2005. It applies to housing developments of at least 50 units and all but the smallest commercial, industrial and office projects (see CP&DR Environment Watch , April 2006 , January 2004 ). The fee starts at $780 per residential unit. Developers may offset or even eliminate the fee by increasing residential densities, mixing uses, providing bicycle and pedestrian facilities, constructing energy-efficient buildings, or taking other steps that reduce driving and energy use. The district spends the fee revenue on off-site mitigation, such as replacing old farm equipment and buses. During the program's first two years, developers have mostly implemented the offsets and have paid far less in fees than the district anticipated. The CBIA and other opponents argued that the fee violated the Mitigation Fee Act, was an illegal special tax and an illegal exaction, and was pre-empted by a variety of state laws. Judge Black rejected all of the contentions. Black found that the fee was not subject to the Mitigation Fee Act because the district does not decide on development projects. "While plaintiffs argue that the fees are ‘in connection with approval of a development project' because defendant (the district) can compel plaintiffs to comply with the fee requirement, there is no evidence that defendants can prevent approval of the projects if the fees are not paid," Black wrote in a 46-page decision. "At most, the district can levy fines against plaintiffs for failing to comply with Rule 9510, which is not the same as preventing approval of the project." The fee is not a special tax because it is triggered only when a developer chooses to develop property and not implement sufficient mitigation, Black ruled. As for the argument that the fee is an illegal exaction or taking, Black determined the fee was subject only to the "reasonable relationship" test, which the district passed. The judge further ruled that the fee was not in conflict with the California Environmental Quality Act or the Subdivision Map Act. The case is California Building Industry Association v. San Joaquin Valley Unified Air Pollution Control District , Fresno County Superior Court Case No. 06 CE CG 02100. An appeal is likely.

The California Supreme Court has accepted a case of considerable importance to regional park and open space districts. The court will review a decision by the Fourth District Court of Appeal, which ruled that the Riverside County Regional Park and Open Space District could not sell about 80 acres to a community college district without voter approval. Park districts say the Fourth District ruling, if upheld, would require districts to conduct elections not only for the sale of land, but also for routine matters such as land transfers and boundary adjustments. One upshot would be a reluctance to acquire new parkland, the districts warn. The ruling is the first published interpretation of a 75-year-old law, amended in 1985, regarding the disposition of parklands. Public Resources Code § 5540 says that a regional park and open space district "may not validly convey any interest in any real property actually dedicated and used for park or open-space, or both, purposes without the consent of a majority of the voters of the district." The question for the court concerns when a property is "actually dedicated" for park or open-space use. The appellate court ruled that the land is automatically dedicated when acquired by a regional park and open space district. But that ruling is "contrary to decades of practice," said Carol Victor, assistant district counsel for the East Bay Regional Park District, which § 5540 helped create. East Bay does not consider property "dedicated" for park and open-space use until the Board of Directors approves a resolution, she said. Like similar districts, East Bay acquires property when it becomes available and often decides on the details of usage and park boundaries at a later date, Victor explained. Sometimes, pieces of an acquired property turn out to be unnecessary, so the district adjusts boundaries and sells the surplus. The district does not seek voter approval beforehand. "It's just not practical to run an election to sell property," said Victor, noting that an election could cost $1 million and delay a transaction by a year. If the ruling stands, the East Bay district would be reluctant to acquire property, she said. The Sonoma County Agricultural Preservation and Open Space District sounded a similar warning in an amicus letter to the state Supreme Court. "While a large majority of the real property interests acquired by the district are dedicated by board resolution for park and/or open space purposes, the ability of the district's board to decide when and whether to formally dedicate such property is critical to the district's overall effectiveness," Deputy County Counsel Phyllis Gallagher wrote. "The district does not have the power of eminent domain. Its dependence on willing sellers makes the district beholden to market exigencies, and requires flexibility in structuring acquisitions so that the district can take advantage of opportunities as they become available. The Court of Appeal's opinion eliminates this flexibility." In 1995, the Riverside County Regional Parks and Open Space District (for which the Board of Supervisors serves as the governing body) acquired 161 acres from a Wildomar property owner through a purchase and gift. Eight years later — after Wildomar voters dissolved a local park maintenance assessment district — the park district agreed to sell about half of the land to the San Jacinto Community College District, which intends to build a campus for up to 15,000 students on the site. However, Gerard Ste. Marie, who lives nearby, sued, arguing that the district could not sell the land without voters' consent. The county park district argued that it never "actually dedicated" the land for park and open-space purposes and could therefore dispose of the property as surplus county-owned land. Nothing in the 1995 purchase agreement offered the land for dedication, and the district took no action to dedicate the property for specific use, the agency argued. But Ste. Marie, who did not hire an attorney for his lawsuit, pointed to Public Resources Code § 5565. That statute says all property acquired by a regional park and open space district is automatically "dedicated and set apart for" park and open-space purposes. Riverside County Superior Court Judge Gloria Trask agreed with Ste. Marie. Although it employed slightly different legal reasoning than Trask used, a three-judge panel of the Fourth District, Division Two, also sided with Ste. Marie. On appeal, the district emphasized the term "actually dedicated," contending that it infers an affirmative act, such as board adoption of an ordinance or resolution. Only then does the property become subject to § 5540's requirement for voter approval. A 1985 amendment to the statute confirmed this view, the district argued. But the court said the 1985 amendment concerned only easements, not the underlying property. "In light of the legislative purpose in enacting the 1933 legislation, it simply makes no sense that the Legislature's use of ‘actually' was intended to have the effect to which district ascribes," Justice Douglas Miller wrote for the court. "Indeed, to accept district's interpretation would, in essence, render meaningless the language and import of § 5565." The state high court voted 5-0 (with two justices absent) on February 27 to accept the case. No date has been set for oral argument. Ste. Marie told the North County Times that the decision to sell the parkland should remain in voters' hands. "They don't want the voters in this area to decide. They want politicians in places other than Riverside County to make the decision," he told the newspaper. The case is Ste. Marie v. Riverside County Regional Park and Open Space District , No. S159319.

Don't miss Morris Newman, Senior Editor of California Planning & Development Report at the California Redevelopment Association's Annual Conference in Anaheim on March 26 . Morris will be participating in the panel on subprime mortgages and redevelopment Wednesday afternoon at 3:45 p.m. at the Disneyland Hotel.