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

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

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

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

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

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

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

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

The California Coastal Commission has adopted a Local Coastal Plan (LCP) for the City of Malibu, despite objections from city officials. The commission voted 10-1 for the plan. Litigation is likely. It is only the second time the commission has imposed an LCP on a local jurisdiction. Two years ago, the state Legislature gave the commission until September 15, 2002 to adopt a plan for Malibu, and the commission met the deadline with two days to spare. Malibu is one many local governments that never adopted an plan to guide land use in the coastal zone, even though the Coastal Act required such plans to be completed more than 20 years ago. Because there has been no LCP for Malibu, every project has required Coastal Commission review, and the panel often spends a quarter of its monthly meeting dealing only with small projects in that one city. Approximately 150 people testified during a two-day public hearing in September. Rock star Don Henley and environmentalists spoke in favor of the plan, while property owners complained that the plan would block even minor home remodeling projects. The plan designates about half of the city as "environmentally sensitive habitat area," and limits new development in an ESHA to 25% of a parcel. The plan also calls for beach access points every 1,000 feet for the length of Malibu's 27 miles of coastline. But the plan allows development of the proposed civic center project, which includes a hotel, offices, stores, a public plaza and park. That project remains subject to voter approval, as required by a 2000 ballot measure. A Southern California developer lost another round in a legal and political fight against a competitor. Los Angeles County Superior Court Judge David Yaffe upheld the City of El Segundo's environmental impact report for a 2.1 million-square-foot office and retail development near Los Angeles International Airport. Thomas Properties Group is behind the project, but Kilroy Realty, whose headquarters is nearby, has unsuccessfully fought the project (see CP&DR Local Watch, May 2002). During the last four months, El Segundo voters have rejected a Kilroy-sponsored referendum on the project, and Yaffe has upheld both the city's processing of the project, and now the EIR. Ventura County Superior Court Judge Henry Walsh has refused to block a vote on a ballot initiative that would allow development of 1,390 housing units on 730 acres of hillside pasture. Opponents of the "Open 80 plan" — so named because 80% of the 3,800-acre site would be designated open space — argued that the state constitution bars initiatives that benefit a corporation. But Walsh ruled the constitutional provision did not apply to a limited liability partnership such as project proponent Lloyd Management Corporation. A 2001 ballot initiative aimed at blocking expansion of Burbank airport has been struck down. The initiative prohibited any construction at the airport unless a 7 a.m. to 10 p.m. curfew and a 10% cap on future growth were imposed. The city sued over the initiative, arguing that the measure conflicted with state law and environmental regulations. Los Angeles County Judge Richard Montes agreed with the city and called the initiative "unconstitutionally vague." For the third time, Kern County supervisors have approved two proposed dairies for a combined 28,000 cows southwest of Bakersfield. The fate of the controversial Borba dairies project is now in the hands of a Superior Court judge, who has twice before rejected the county's environmental impact report. Kern County is also negotiating with dairy industry representatives for funding of a program EIR, which the county hopes to use as a basis for allowing up to 35 additional "by-right" dairies, Planning Director Ted James said. To the north, Kings County officials this summer adopted a dairy element of the general plan and a program EIR. A proposal that the Bush administration says would make forests more fire resistant has sparked its own firestorm of controversy as it makes its way through Congress. The "Healthy Forest" initiative seeks to speed environmental review of forest-thinning projects, eliminates citizens' ability to appeal U.S. Forest Service decisions on some logging and brush-thinning, and prevents judges from issuing temporary injunctions to stop forest thinning projects. During a speech in Oregon in late August, President Bush said, "We have a problem with the regulatory body there in Washington. I mean, there's so many regulations, and so much red tape, that it takes a little bit of effort to ball up the efforts to make the forests healthy. And plus, there's just too many lawsuits, just endless litigation." Environmentalists are vigorously fighting the proposal, calling it a giveaway to timber companies. U.S. Sen. Dianne Feinstein has been working on a compromise. Major environmental groups have come out in opposition to a $1.6 billion bond to repair the Hetch Hetchy water system that serves about 30 Bay Area cities (see CP&DR Public Development, April 2002). San Francisco owns and operates the system, and voters there will decide on the bond. Groups including Environmental Defense, the Planning and Conservation League, and local Sierra Club chapters — all of whom wield great influence in The City — oppose Proposition A because the bond would not provide money for a study of restoring Yosemite National Park's Hetch Hetchy Valley, which Congress allowed San Francisco to dam during the early 20th century. The City of San Jose has doubled the size of its housing program, which was already the state's largest. In September, city officials approved a five-year plan to spend $2.1 billion in city, state, federal and private funds, with about one quarter of the money coming from the city and its redevelopment agency. The money is intended to build 6,000 additional housing units, acquire and renovate 2,000 units, provide rehabilitation loans for 7,200 units, and offer first-time-buyer loans to 500 school teachers. San Jose has established a task force to create a new growth plan for the city's rural southern end where the city earlier approved a controversial 6.6-million-square-foot campus for Cisco Systems (see CP&DR In Brief, November 2001, CP&DR, June 2000). Cisco has since put the project on hold. Mayor Ron Gonzales and the City Council appointed the Coyote Valley Task Force to draft a plan that permits at least 50,000 jobs and 25,000 homes, and maintains a greenbelt between San Jose and Morgan Hill. Environmentalists and affordable housing advocates, however, said the 20-member panel was tilted toward development interests. Two separate lawsuits have been filed over Sacramento County's approval of the 6,000-acre Sunrise-Douglas Community Plan and a subset of that plan, the 10,000-unit Sunridge Specific Plan (see CP&DR Local Watch, August 2002). A lawsuit by Legal Services of Northern California and the Western Center on Law and Poverty claims the county broke a 1996 agreement to earmark about 1,000 acres for affordable housing. Meanwhile, the Environmental Council of Sacramento has challenged the project EIR, arguing that it did not adequately address the impact of extensive groundwater pumping on the Cosumnes River. City officials from Woodland and Davis have signed a nonbinding agreement that prohibits either city from annexing territory in a two-mile-wide buffer of farmland between the two Yolo County cities. "I like to think of it as a friendly separation," Davis Mayor Susie Boyd said at the ceremonial signing in early September. The El Dorado Hills Incorporation Committee has sued the El Dorado County Local Agency Formation Commission. Incorporation proponents argue that the LAFCO violated their civil rights by demanding up front nearly a quarter of a million dollars for application process and an EIR. Yuba County has begun processing an application for what would be a new town in the oak savanna east of Marysville, near Beale Air Force Base. The 2,900-acre Yuba Highlands project would have 5,100 residential units and roughly 1 million square feet of retail and industrial space. Gallelli Real Estate of Roseville is the project applicant. The area has been the subject of large-scale development proposals in the past, and a community plan for the area calls for 9,000 housing units, but little has been developed so far.

Food substitution is among the household arts that make daily living possible. One cup of buttermilk, for example, can be substituted with a tablespoon of lemon juice or vinegar plus enough whole milk to make one cup. Or two cups of tomato sauce can be replaced with three-quarters cup of tomato paste, plus one cup of water. A few substitutions do not spoil the dish. They may even improve the taste. At a certain point, however, the cook can substitute no further, or the dish will be spoiled. At very least, the dish will end up very differently from the one the cook originally set out to make. It is a matter of opinion whether downtown Pleasant Hill is a dish that has been spoiled. What is indisputable is that the final product, from a site-planning perspective, looks very different than the original site plan. One might ask why we should care. This five-block area in little Pleasant Hill — a city 30 miles east of San Francisco with a population of 32,000 — accomplishes most of its original aims: The city now has a readily identifiable center, and provides a walkable downtown area where one did not exist before. Still, something is troubling here. The final, built version of downtown Pleasant Hill has lost much of the coherence, and possibly the charm, that was promised in the original site plan. A clear arrangement of streets and open spaces has been replaced by something that looks very much like a conventional power center. The story of downtown Pleasant Hill, in short, is an object lesson in the depredations that developers can inflict on urban design if not constrained by firm guidelines. The experience of the Bay Area city might provide an argument against the time-honored practice of cities relying wholly on retail developers to design pedestrian-oriented downtowns. If not a masterpiece, the original site plan of downtown Pleasant Hill — designed, in succession, by Heller Leake and Field Paoli — was intriguing. Much, perhaps too much, was going on in this plan. It incorporated in a very small area some of the fanciest moves in city planning. Small shops are arranged along a crescent-shaped street. Influenced by Hollywood set design, curving streets provide the intriguing illusion of an endless vista, with something new always emerging around the corner. Another powerful device is a diagonal street, which creates a visual connection between the shopping center and City Hall to the northeast. Two plazas — one in the center of the shopping area and one directly in front of City Hall — are oriented along this diagonal axis. The plan can be faulted for striving for spectacular effects rather than focusing on the already difficult task of creating a set of attractive, coherent streets. Notwithstanding, the original site plan was clear in its intent: The quality of the pedestrian experience was paramount, and that buildings should be molded around open spaces, rather than the opposite. Were the developers and the money-men the culprits? It is hard to say. A presentation by the city's redevelopment director, Rich Bottarini, outlines the general requirements of commercial development. There are few surprises here. The developers need to realize an "acceptable" return on investment. To do so, they need to lease space to a certain number of "national credit" tenants. The developer and retailers both need flexibility — meaning that the city's plans must be altered to meet the inflexible needs of retailers for both architecture and signage. Naturally, retailers want "an abundance of convenient parking," while both retailers and lenders want a shopping area to offer a mix of local and national tenants. As in any large commercial project, city officials compromised with the developers. Architecture is part of the branding of national credit tenants, so the site plan must bend to accommodate them. In Pleasant Hill, the developer and major tenants substituted their own designs for the city's own site plan. There is nothing wrong with this, as long as the integrity of the site plan was preserved. But without firm planning principals, the recipe was quickly adulterated. Tenants demand abundant parking, so the site plan opened up hundreds of spaces of additional surface parking. But there was plentiful surface parking in the original scheme. So the final, built version of downtown Pleasant Hill offers the familiar sight of buildings floating on a sea of asphalt, like any other suburban shopping center. Here, "accidental," undesigned open space — that is, the space between big box retail buildings — competes with the designed plazas. The crescent street fares little better. For reasons I do not understand, the promise of curving, Piccadilly Circus-type buildings along the crescent become a series of irregularly shaped lumps that do not deliver the charming novelty of the curved façade. And the central plaza that was a centerpiece of the original site plan has been eaten away by irregularly shaped retail buildings. Compromise does not in itself savage good planning. Planning thrives on a certain amount of irregularity, even some dissonance, as long as there is a well-established harmony from which we make a brief departure. In downtown Pleasant Hill, however, there is neither harmony nor dissonance. There is just retail. A pedestrian-oriented plan has turned into an automobile-oriented plan. The use of structured parking would have prevented the sprawling parking lots, and helped preserve the continuity of the "walk streets." True, retailers often ask for surface parking in suburban areas, but the same retailers have learned to live with structured parking in other cities, as long as customers show up. More to the point, the city itself should have built the streets and the plazas, and subsequently invited in the retail developers. There are ingredients — streets and open space — that cannot be sacrificed in urban design. But in downtown Pleasant Hill, too many cooks have substituted their own agenda in place of coherent urbanism. In doing so, they have spoiled the broth.

A school district may charge only limited mitigation fees on a redevelopment project in which new houses replace demolished residential units, the Fourth District Court of Appeal has concluded. The court held that the Tustin Unified School District could levy fees only on the difference in square footage between old apartments and the new houses that replaced the apartments. The school district appeared to lose the case because its fee study did not satisfy the court. "The fee study did not address the burden created by redevelopment construction, as opposed to new residential construction that did not displace existing housing, and thus did not show the requisite connection, or ‘nexus,' between the amount of the fee imposed and the burden created," Justice Eileen Moore wrote for the unanimous three-judge panel. The redevelopment project in question was the demolition of 56 apartments and construction of 38 single-family homes by Warmington Old Town Associates in Tustin. The school district levied its usual mitigation fee of $1.93 per square foot on the new houses, for a total fee of $122,080. Warmington said it should get credit for the demolished square footage and paid the fee in protest. Most school districts grant a square-footage credit for replacement housing, although the Education Code is unclear. When Tustin Unified refused to offset the full fee, Warmington filed a lawsuit. The developer argued that it should get credit for the 56 units it demolished, and that the district's fee study did not show a nexus between the new homes and student generation. Orange County Superior Court Judge John Woolley ruled that the school district was entitled only to the difference between the new construction (63,254 square feet) and the demolished units (47,500 square feet). The court ordered the district to refund $92,640 plus 10% annual interest. The Fourth District upheld the decision, but on a different basis than Woolley used. The trial court judge found that Education Code § 17620, subdivision (a)(1), distinguished between "new construction" and additions of more than 500 square feet. Woolley ruled that the Warmington project amounted to an addition, and he allowed the fee only for the difference between the old buildings and the new buildings, minus 500 square feet. The appellate panel held that the statute Woolley cited "was intended to refer to residential remodeling projects, not to total demolition and replacement." Instead, the court found that the school district had run afoul of the Mitigation Fee Act (Government Code § 66000 et seq.), which required the district to show a reasonable relationship between the impact of the project and the fee. The school district argued that its 1998 fee study provided adequate basis to levy the fee. But the court said the study fell short in the area of redevelopment projects. A school fee study must contain three elements, the court held, citing Shapell Industries, Inc. v. Governing Board, (1991) 1 Cal.App.4th 218 (see CP&DR Legal Digest, January 1992). The study must forecast the total amount of new housing expected to be built, it must determine the approximate number of students the housing will generate, and it must estimate the cost of providing school facilities to the additional students. Tustin Unified's study, "failed to meet the first and second prongs of the Shapell test," the court ruled. "It failed to meet the first prong to the extent that the projection of the total amount of new housing failed to take into consideration the demolition of housing units for redevelopment," Justice Moore wrote. "Similarly, it failed to meet the second prong because the fee study did not approximate the number of students to be generated by redevelopment (i.e., the difference between the number of students that previously inhabited redevelopment sites and the number of students projected to subsequently inhabit those sites)." The school district argued that it was too late to challenge the fee study, but the court disagreed, saying the district's compliance with the Mitigation Fee Act "was squarely before the court." The court upheld the entire refund, but lowered the interest rate to the 8% rate prescribed by Government Code § 66020, subdivision (e). The Case: Warmington Old Town Associates v. Tustin Unified School District, No. 02 C.D.O.S. 8013, 2002 DJDAR 10022. Filed August 30, 2002. The Lawyers: For Warmington: Don Fisher, Palmieri, Tyler, Wiener & Wilhelm, (949) 851-9400. For Tustin Unified: Wendy Wiles, Bowie, Arneson, Wiles & Giannone, (949) 851-1300.

A City of Cotati lawsuit against mobile home park owners who challenged the city's rent control ordinance was not a strategic lawsuit against public participation (SLAPP), the state Supreme Court has ruled unanimously. The city filed a validation lawsuit against Gene Cashman and other mobile home park owners in state court after the park owners sued the city in federal court over the rent control law. The park owners contended that the city's lawsuit was a SLAPP, and Sonoma County Superior Court Judge Laurence Sawyer agreed. But an appellate court overturned the decision, and the state Supreme Court upheld the appellate court's ruling. The state high court ruled that an actual controversy — the legitimacy of a rent control ordinance — was the basis for the city's lawsuit in state court. The city's lawsuit did not arise from the park owners' federal lawsuit, so the city's lawsuit was not subject to the anti-SLAPP statute (Code of Civil Procedure § 425.16). In 1998, the city adopted a mobile home rent stabilization ordinance to maintain the affordability of housing. Shortly thereafter, mobile home park owners sued the city in federal court, claiming the ordinance amounted to an uncompensated regulatory taking. The city then filed a lawsuit in state court seeking a declaration that the ordinance and the city's application of it to individual property owners were constitutional. The park owners called the city's lawsuit a SLAPP — an illegal lawsuit that project proponents sometimes wield in hopes of shutting down their opponents. The city conceded it filed the lawsuit because it saw state court as a more favorable venue, and that it intended to ask the federal court to abstain while the other lawsuit proceeded. But the city also argued that a valid controversy existed for the state court to decide. Judge Sawyer sided with the park owners, saying the city's lawsuit arose from the property owners' exercising their right to petition the government. The First District Court of Appeal reversed the decision and remanded the case back to the trial court in July 2001. The appellate panel ruled that Cotati's lawsuit sought to resolve the same constitutional issues that mobile home park owners had raised themselves. The court also held that Cotati's lawsuit served the public interest and did not result in additional expense or inconvenience for the park owners. At the state Supreme Court, the definition of the term "arising from" became the turning point. In the two-part test for determining whether a lawsuit is a SLAPP, a court must first decide whether the lawsuit is one "arising from" protected activity, such as speaking freely. If the answer is yes, then the court must determine if the plaintiff has demonstrated a probability of winning the lawsuit. If the plaintiff cannot do so, the lawsuit is subject to the anti-SLAPP law and the court can strike the lawsuit. The court held that "arising from" does not mean the same thing as "in response to." "[T[he mere fact an action was filed after protected activity took place does not mean it arose from that activity," Justice Kathryn Mickle Werdegar wrote for the court. "The anti-SLAPP statute cannot be read to mean that ‘any claim asserted in an action which arguably was filed in retaliation for the exercise of speech or petition rights falls under § 425.16, whether or not the claim is based on conduct in exercise of those rights,'" Werdegar continued, citing ComputerXpress, Inc., v. Jackson, (2001) 93 Cal.App.4th 993. To rule as the park owners urged "would in effect render all cross-actions potential SLAPPs," the court ruled. " he actual controversy giving rise to both actions — the fundamental basis of each request for declaratory relief — was the same underlying controversy respecting city's ordinance. City's cause of action therefore was not one arising from owners' federal suit," Werdegar wrote. Thus, the city's lawsuit was not subject to the anti-SLAPP law. Whether or not the city filed its lawsuit as a tactical response to the park owners' suit was irrelevant under the anti-SLAPP statute, the court held. Park owner arguments that the city's lawsuit was an attempt to chill free speech were also irrelevant, Werdegar wrote. In fact, requiring the defendant of a lawsuit to prove that the action had a chilling effect would deprive the defendant of anti-SLAPP protection, she wrote. Chief Justice Ronald George and Justices Joyce Kennard and Carlos Moreno concurred with Werdegar's opinion. Justices Janet Rogers Brown, Marvin Baxter and Ming Chin agreed with the portion of the opinion addressing the definition of "arising from" but called the rest of the opinion unnecessary. The state's high court issued two other SLAPP rulings the same day the Cotati opinion came down. The common ruling in all three cases was that a defendant in an alleged SLAPP lawsuit did not have to prove subjective motive behind the lawsuit. The Case: City of Cotati v. Cashman, No. S099999, 02 C.D.O.S. 7957, 2002 DJDAR 9950. Filed August 29, 2002. The Lawyers: For Cotati: Donald Lincoln, Endeman, Lincoln, Turek & Heater, (619) 544-0123. For Cashman: R.S. Radford, Pacific Legal Foundation, (916) 362-2833.