California courts are increasingly active in trying to clarify the question of when a government action becomes a "project" under the California Environmental Quality Act. Three recent appellate court rulings have turned on the answer to this question, and a fourth case involving a project definition is pending before the California Supreme Court. So far, however, the resulting picture is less than clear. All three recently decided cases involved instances when public agencies did not conduct environmental review, and in two of three the court ruled the public agency was correct — the agency action did not require environmental review. Courts ruled that the Tuolumne Park and Recreation District's sale of historic railroad right-of-way to an Indian tribe did not require environmental review, and neither did the McCloud Community Services District's conditional agreement with Nestlé regarding a potential water bottling plant. In the other case, the Second District Court of Appeal ruled that the City of West Hollywood should have completed an environmental impact report before entering into a conditional agreement with a nonprofit housing developer for the sale of city-owned real estate. Meanwhile, the State Supreme Court is scheduled to hear oral arguments this month in a case that also involves the definition of a project. In Muzzy Ranch v. Solano County Airport Land Use Commission , the First District Court of Appeal ruled that Solano County should have completed an environmental study before adopting the Travis Air Force Base Land Use Compatibility Plan, which froze the zoning on tens of thousands of acres around the base (see CP&DR Legal Digest , March 2005). Muzzy Ranch is a bit different from the three recent appellate court cases, but all involve the trigger for environmental review. "The real test ought to be whether the public agency has taken a step to go forward with a particular project or development," said Stephen Kostka, an attorney with Bingham McCutcheon and co-author of Practice Under the California Environmental Quality Act . "I think the West Hollywood case is sort of the outlier, but you might be able to explain it on its facts." However, Michael Jenkins, West Hollywood's attorney, contended that the facts in his case were similar to McCloud in that both cases involved public agencies approving agreements for projects that were not fully defined. Both agreements were conditioned upon compliance with CEQA once the projects were defined. But the ruling in Save Tara v. City of West Hollywood "seems to say that something is a project the moment you think about it," Jenkins said. "We obviously agree with McCloud. It's analogous." West Hollywood intends to seek a rehearing and could ask the state Supreme Court to review the decision. In Concerned McCloud Citizens v. McCloud Community Services District , the Third District Court of Appeal ruled that the district's contract with Nestlé for the provision of 1,600 acre-feet of water and other measures relating to a bottling plant was not a project (see CP&DR Legal Digest , March 2007). "The agreement, while admittedly a binding contract, is conditional and does not grant Nestlé a vested right of use of the project. The agreement is predicated on a series of ifs and commits the district to sell water to Nestlé only if the described terms are successfully completed," the court ruled. Among the agreement's conditions was completion of an EIR. Project opponents have appealed to the state Supreme Court. Jenkins brought McCloud to the attention of the Second District Court of Appeal panel considering the West Hollywood case. But the panel, which divided 2-1, did not mention McCloud in the ruling issued three weeks later. The West Hollywood case involves the fate of Laurel Place, a colonial-style mansion built at least 84 years ago and divided into four apartments during the 1940s. The previous owner donated it to the city. In June 2003, the city signed an option agreement with WASET, Inc., and West Hollywood Community Housing Corporation that permitted the developers to apply for Department of Housing and Community Development (HUD) funding. Later that year, HUD awarded the developers $4.2 million to help pay for 30 to 35 units of very low-income senior housing through rehabilitation of Laurel Place and construction of a U-shaped apartment building around the mansion. In May 2004, the city and developers signed a new "conditional agreement for conveyance and development of property." A group of project opponents called Save Tara (so named because the previous owner of Laurel Place loved "Gone with the Wind" and the West Hollywood estate slightly resembles the movie's mansion) filed a lawsuit. Opponents argued that the city had violated CEQA by not conducting an EIR before signing the agreement. In August, the city amended the agreement to state that CEQA must be complied with. Los Angeles County Superior Court Judge Ernest Hiroshige ruled against opponents because the city had not given final approval for the housing project. On appeal, the Second District, Division Eight, overturned Hiroshige. "The trial court's error is two-fold," Justice Madeline Flier wrote for the two-judge majority. "First, an EIR is not to be delayed until a ‘final' decision has been made. Second, the finding that the agreement was ‘expressly conditioned on compliance with CEQA' indicates a misunderstanding of the EIR review process. That process is intended to be part of the decision-making process itself, and not an examination, after the decision has been made, of the possible environmental consequences of the decision." The court noted that the HUD application and subsequent agreements between the city and the developers were extremely detailed. The May 2004 agreement "presents a project for which the planning in practical fact is complete. … It is not a ‘land acquisition agreement,' as city contends." " nce HUD approved the $4.2 million grant for the project in November 2003, the EIR review process should have been initiated," the court ruled. Since the litigation was filed, the city has completed an EIR for a 28-unit senior housing project and approved the development. The EIR was certified in October 2006 and not challenged in court. Thus, the city argued, Save Tara's suit was moot. The majority disagreed, ruling that the city must "engage in the EIR review process based on the project as described in the HUD application, and without reference to the May and August 2004 agreements." In a dissenting opinion, Presiding Justice Candace Cooper agreed with the city. The opponents sought a certified EIR and they didn't contest the one the city completed, she noted. Attorney Jenkins said the court's decision essentially invalidates the EIR, even though the court never reviewed it. "The court seems to presume that just because we entered into a conditional agreement, our EIR is tainted," he said. In the case involving Tuolumne Park and Recreation District's sale of railroad right-of-way, the Fifth District Court of Appeal went the other direction. Although the Tuolumne Band of Me-Wuk Indians is already developing a 300-acre parcel through which the railroad right-of-way runs, the court held that environmental review of the sale would have been premature because the tribe had announced no plans for development on the right-of-way. " rdering CEQA review in the absence of a plan involving an identifiable impact would not be meaningful," the court ruled. Originally constructed from 1897 to 1900, the Sierra Railroad ran 56 miles from Oakdale in the San Joaquin Valley to Tuolumne in the Tuolumne County foothills. It served the mining, logging and hydroelectric industries, and carried passengers. A private operator still uses a portion of the line to haul freight and provide tourist rides. In 1986, the Tuolumne Park and Recreation District purchased a 6.2-mile segment between the communities of Standard and Tuolumne. This segment had fallen into disuse, but the district proposed operating its own passenger excursion train. That idea was not politically popular, and by 1991 the district had abandoned it. A 2002 county recreation master plan, which the district helped write, called for extending a multi-use trail along the length of the right-of-way within Tuolumne County. Nevertheless, the district in 2005 sold the 6.2-mile-long, 100-foot-wide right-of-way to the Tuolumne Band in exchange for an office building and corporation yard, and $75,000. A group called Friends of the Sierra Railroad opposed the sale. Friends contended the railroad is an historic asset, with its track alignment, rolling stock, and railroad structures making for the most intact historic railroad system in California. The State Historic Resources Commission found that the entire railroad is eligible for the National Register of Historic Places. Friends argued the district had to study whether the sale would impact the railroad's historic value. The tribe already owned a 300-acre former lumber mill site that it is developing with offices, houses and a golf course, all related to the tribe's nearby Black Oak Casino. A 0.6-mile section of the right-of-way runs through the former mill site. The district declined to perform an environmental review, so the preservationists sued. The Tuolumne County Superior Court ruled that, although the right-of-way meets the definition of an historic resource under CEQA, the transfer of title was not a project. On appeal, a three-judge panel of the Fifth District agreed. The court's decision suggests that it is not always clear when a government action becomes a "project" for CEQA purposes. Friends argued that the transfer of the right-of-way was the "first step toward a physical change in the environment." The court conceded that the Tribe was already developing land along the right-of-way but, because no plans had been revealed for the right-of-way, there was no project to study. "The reasonably foreseeable likelihood of some development on the West Side Lumber Company property, combined with the possibility that the development could impact the historical resource included within the larger property, does not trigger CEQA review," Justice Rebecca Wiseman wrote for the court. "CEQA review has to happen far enough down the road toward an environmental impact to allow meaningful consideration in the review process of alternatives that could mitigate the impact." "As it was, no specific plans were on the table," Wiseman continued. "The tribe has not proposed any development that would affect the historic resource." Friends accused the tribe of a "lack of candor." The court said even if that were true, there still was no plan to review. Friends cited Bozung v. Local Agency Formation Com. , (1975) 13 Cal.3d 263, in which the state Supreme Court ruled that the commission's approval of a land annexation for a contemplated development was a project under CEQA. The group also cited Fullerton Joint Union High School Dist. v. State Bd. of Education , (1982) 32 Cal.3d 779, in which the court ruled that Yorba Linda's secession from a school district was a project. But the Fifth District said those cases were different. In Bozung , the court found that a planning process to subdivide land had already occurred. In Fullerton , the secession necessitated construction of a new high school. With the railroad right-of-way, "no planning has taken place and no building is expected to go forward in the near future that could cause an impact on the historical resource," the court concluded. Whitman Manley, attorney for Friends of the Sierra Railroad, said the decision is consistent with McCloud , but conflicts with Save Tara and with other cases that have "expanded on what is a project." Perhaps most frustrating to the preservationists, is that Indian tribes do not necessarily have CEQA obligations. "This decision is basically dumping the fate of the right-of-way into a jurisdictional black hole," Manley said. "It means they could do things with the right-of-way without ever disclosing the impacts on the historic resource." First Case: Save Tara v. City of West Hollywood , No. B185656, 2007 DJDAR 2360. Filed February 21, 2007. The Lawyers: For Save Tara: Jan Chatten-Brown, Chatten-Brown & Carstens, (310) 314-8040. For the city: Michael Jenkins, Jenkins & Hogan, (310) 643-8448. For WASET, Inc.: James Arnone, Latham & Watkins, (213) 485-1234. Second Case: Friends of the Sierra Railroad v. Tuolumne Park and Recreation District , No. F050117, 07 C.D.O.S. 1502, 2007 DJDAR 1878. Filed January 12, 2007. Ordered published February 8, 2007. The Lawyers: For Friends: Whitman Manley, Remy, Thomas, Moose & Manley, (916) 443-2745. For the district: Jerome Levine, Holland & Knight, (213) 896-2400.

Placer County is finalizing its first land conservation plan, designed to keep 60,000 acres from being developed in the rapidly-growing region northeast of Sacramento. An initial conservation map for the western part of Placer County was adopted by the Board of Supervisors during late January, and a final map could be approved later this year. The Placer County Conservation Plan marks a big turn for a pro-growth county where voters rejected a quarter-cent sales tax for land acquisition in 2000. While not stopping additional development, the new plan directs it away from some rural areas. And there is plenty of growth to direct. The county is planning major urban development in the western county with three large projects: Placer Vineyards, a university and associated community, and the Placer Ranch project. Placer Vineyards alone is planned to include 14,132 housing units on 5,230 acres west of Roseville. The plan accommodates these big projects, as well as large-scale growth plans in the City of Lincoln. "It will allow Lincoln a huge amount of new growth," said County Supervisor Robert Weygandt, who represents Lincoln. "It will probably provide the ability to double the population from the current 35,000." Placer County is bisected by Interstate 80, and much of the growth is along the I-80 corridor. The county's population has increased dramatically in recent years to about 320,000. In the first half of this decade, population grew by 17.6%, and for a few years, Placer was the fastest growing county in the state by percentage. By 2015, Placer County is projected to grow by an additional 90,000 residents — more than 25%. Most of the growth is in unincorporated areas, Lincoln and Roseville, the county's largest city. Roseville has not signed onto the land conservation plan, something county officials are hoping will happen. A Roseville city official said the city is participating in regional committees related to the county's conservation plan, including a technical advisory committee and one on biology. "After it's a little bit more defined, if it makes sense for Roseville to join, we might consider a different level of participation," said Mark Morse, environmental coordinator with Roseville's Community Development Department. The conservation plan is an outgrowth of longstanding efforts to save open space in the county, according to Terry Davis, Mother Lode Chapter Coordinator for the Sierra Club. "It seems like an anomaly, in a way, that a long-term planning effort would have progressed this far in a conservative county like ours, one whose political nature is inherently suspicious of big new government programs," Davis wrote in an op-ed article for the Auburn Journal. But the plan offers certainty for builders and the promise of quick issuance of permits, rather than lengthy court battles over large-scale development that have been the norm in recent years. The 50-year conservation plan only covers land in the western part of the county, along its borders with Sutter, Yuba and Nevada counties. These low-lying regions are home to rice fields, orchards and rolling oak-studded hillsides. They are also home to more than 30 species of concern or listed species under the federal or state laws, Davis said. Conservation plans for the remaining two- thirds of the county will be drawn up later. Much of the land in the conservation area will remain in agricultural use, said Fred Yeager, the retired county planning director who today is president of the Placer Land Trust. Cattle grazing around vernal pools, for example, may benefit those habitat areas, he explained. Boundaries for the proposed conservation plan area now encompass 80,000 acres, but the actual conservation area land is expected to be winnowed down to 60,000 acres after negotiations are completed with agencies such as the U.S. Fish and Wildlife Service. The conservation plan will function as a habitat conservation plan (HCP) under federal law and a natural communities conservation plan (NCCP) under state law, providing developers certainty over what regulatory issues they will have to contend with as they move to develop land outside protected areas. Under the Placer County plan, developers are expected to be able to mitigate any destruction of habitat by purchasing conservation easements within the protected conservation plan area. Although the plan focuses primarily on conservation easements, some of the land will be in public ownership as well, Yeager said. Federal and state funds are also expected to help pay for funding the conservation area, he said. According to a county staff report, programs like the county's "are increasingly seen as a solution to problems associated with project-by-project review of land development projects. The interest on local agencies' part is to solve the numerous and complicated problems associated with balancing growth with the mandate of the state and federal agencies to protect sensitive species and their habitats." But some wonder whether a recent decision to limit permits issued under San Diego County's multiple species conservation plan will mean that Placer County's plan is open to legal challenges (see CP&DR Environment Watch , February 2007). In the San Diego case, the focus was on permits related to development of property containing vernal pools — shallow, seasonally flooded ponds and puddles that constitute one of the rarest and most threatened habitat types in California. In Placer, too, much of the developable land is in an area that has many vernal pools. Brigit Barnes, a land use attorney in Placer County, is concerned that Placer County will run into the same problems that San Diego County did on its multi-species plan. "I think the plan is in violation of the San Diego order," said Barnes, who worries that environmentalists will seize on the discrepancy. The Center for Biological Diversity brought the San Diego lawsuit. Peter Galvin, the group's conservation director, said the environmental group is not involved in the Placer County HCP. But he said the San Diego ruling should help the group in its work on other HCPs in the state. Supervisor Weygandt is unperturbed. "San Diego had a problem because it excluded the vernal pool habitats," he said. "We're seeking coverage for all protected habitat types." "Our effort," added the Sierra Club's Davis, "has been to make this a very good HCP that could withstand any legal challenge." The Placer County Conservation Plan's legality is one question; its popularity is another. Barnes said that many Placer County landowners oppose the plan. Ranchers and farmers think of their land as "an estate plan for their grandchildren," she said. "It's controversial," Yeager conceded. "Folks believe it will result in more onerous requirements. I don't." Yeager said that every major project in Lincoln, Roseville and in unincorporated areas has been challenged in court during recent years over mitigation issues, primarily environmental ones. With the new plan, developers will be able to meet their mitigation needs for federal, state and county requirements in one fell swoop, he said. "Developers know what their obligations are going to be." Weygandt expects the additional costs of mitigation to be borne by new homeowners, but he sees many benefits of the new plan thanks to a "conservation strategy being as specific as possible." "I'm very optimistic," Weygandt said. "It's very likely we'll have a product that'll serve our citizens over 50 years." Contacts: Robert Weygandt, Placer County supervisor, (530) 889-4010. Fred Yeager, Placer Land Trust, (530) 887-9992. Terry Davis, Mother Lode Chapter of the Sierra Club, (916) 557-1100, ext. 108. Brigit Barnes, Barnes & Associates, (916) 660-9555. Peter Galvin, Center for Biological Diversity, (707) 986-7805. Mark Morse, City of Roseville Community Development Department, (916) 774-5499. Placer County Conservation Plan website: www.placer.ca.gov/CommunityDevelopment/Planning/PCCP.aspx

Disney has opened two new fronts in its fight to block a 1,500-unit condominium project adjacent to a third theme park site in Anaheim. At the same time, the Anaheim City Council has scheduled a new hearing on the project after a councilwoman who had abstained earlier learned that she has no conflict of interest. In late February, Disney sued the City of Anaheim over the environmental impact report for SunCal's 1,500-unit housing project on the site of two existing mobile home parks and a strip mall inside Anaheim's resort district. The suit arrived only days after the City Council deadlocked 2-2 on the project, meaning the Planning Commission's denial of the project stood. In March, Disney unveiled an initiative that would require a public vote on any land use changes within the 2.2-square-mile resort district. Disney and local business organizations said they hoped to get the initiative on the February 2008 ballot. The day after Disney's initiative announcement, the City Council voted 3-2 to reconsider SunCal's project. At Disney's urging, Councilwoman Lucille Kring had abstained from the earlier decision because she is planning to open a wine bar in the GardenWalk development, near the SunCal project site. But the Fair Political Practices Commission determined that Kring has signed only a nonbinding letter of intent, and that she may vote on the housing proposal. Kring and two other council members then voted for the rehearing, which is likely to be set for April 24. Disney argues that new housing would compromise the integrity of the resort district around its theme parks and the Anaheim Convention Center. Housing and labor advocates, however, argue that the tens of thousands of people who work in the resort district need close-by places to live. Fifteen percent of the units in SunCal's project would be available to moderate-income families. The League of California Cities has written a statewide initiative that would prohibit the taking of owner-occupied residences for economic development purposes. The "Homeowners and Private Property Protection Act" would still permit the condemnation of owner-occupied residences for public works projects, or for health and safety reasons. The proposed initiative offers no additional protections for renters. The league filed the initiative with the attorney general's office in late February and could begin collecting signatures this spring. The initiative could negate one of property rights advocates' chief arguments against eminent domain and redevelopment — that the government could take your house and give it to a private developer. Meanwhile, the Howard Jarvis Taxpayers Association continues to refine a competing property rights initiative (see CP&DR , January 2007). The Jarvis group has announced the same aim as the league, namely, protecting homeowners. However, the Jarvis initiative goes much further into property regulation and would, among other things, prohibit rent control. The Jarvis group's "California Property Owners Protection Act" is pending at the attorney general's office. San Francisco has adopted a six-month, interim ordinance that requires a conditional use permit for the destruction of any dwelling unit. Advocates said the measure, which could become permanent later this year, would protect affordable units in danger of being demolished and replaced with higher-end units. Opponents, however, said the new requirement would slow or block small developments opposed by neighborhood groups. "Effectively, what it is is a moratorium on residential demolition," said Joel Karr, of Group 41 Architecture, who argued that the measure does nothing to ensure housing affordability. "It's sort of a rampant NIMBYism." The Board of Supervisors passed the measure on a 6-5 vote. Litigation is likely. Stanislaus County supervisors have chosen to negotiate with Sacramento developer Gerry Kamilos on redevelopment of the closed Crows Landing Naval Air Station, on the Central Valley's west side south of Patterson. On a 3-2 vote, the board chose Kamilos's West Park proposal over one submitted by Hillwood Development, which is undertaking a similar base redevelopment in San Bernardino (see CP&DR Economic Development , July 2002). The Pentagon closed the Crows Landing base in 1996 and gave the 1,500-acre property to the county in 2004. County officials would like to see the base converted into a center of commerce on the valley's west side, which is dominated by farms and subdivisions for Bay Area commuters. A steering committee composed of various local representatives recommended Hillwood, which proposed a warehousing and manufacturing business park. Instead, supervisors picked Kamilos, who presented plans for not only the base, but 3,000 surrounding acres. The project envisions a short-haul rail link to the Port of Oakland. Trains would unload imports at warehouses, and load up agricultural products for export. Stanislaus County hopes to win state transportation bond funds for the rail line. Opponents of the Kamilos project say the chances of getting state funding are slim, and that the developer will turn to residential development instead — a charge Kamilos has denied. Solana Beach voters narrowly approved a "residential mansionization" ordinance during a special election in March. The city-sponsored initiative applies to about 1,200 parcels west of Interstate 5, where pressure to replace or add onto existing houses has peaked during recent years. The City Council approved the ordinance in 2006, amended it after a mistake was found, and then placed it on the ballot for confirmation. Proposition A passed with 50.8% of the vote. Ordinance supporters said it is necessary to preserve the ambiance of the city's modest beach neighborhoods. Opponents, including the North San Diego County Association of Realtors, argued the measure tramples on property rights. The ordinance establishes floor area ratios in a "scaled residential overlay zone." The ratios slide based on the size of the lot. For example, a 6,000-square-foot lot could have a house of 3,000 square feet, plus a 400-square-foot garage. A 10,000-square-foot parcel could have a 3,700-square-foot house, plus a garage. Alhambra's Redevelopment Agency spent up to 60% of low- and moderate-income housing set-aside funds on planning and administration, charged 35% of agency salary and operating expenses to the housing fund, and double-counted units for replacement and production purposes, according to an audit by the Department of Housing and Community Development (HCD). Auditors reported that the agency dedicated 60%, 40% and 51% of low-mod housing expenditures to planning and administration during the 2003, 2004 and 2005 fiscal years, and made no findings regarding the necessity and proportionality of such expenditures. Plus, charging 35% of salaries and overhead to the housing fund "seems to be a disproportionate share of the costs," HCD concluded. Alhambra officials responded that they would conduct an annual analysis and make required findings beginning with the current fiscal year. Auditors found that Alhambra has double-counted units as both replacements for lost housing and as new units to meet production requirements. "The agency has not provided a complete list of the project names and number of units as its basis for production-unit count, nor has it identified the projects associated with removed units; therefore, we are unable to determine to what extent the double-counting has occurred," HCD's audit states. Alhambra should revise and correct its implementation plan and records, and produce more units if necessary, HCD recommended. The agency said it would consider doing so. Advocates of incorporation in Carmel Valley have sued the Monterey County Local Agency Formation Commission (LAFCO) because the commission refused to let incorporation go forward without an environmental impact report. The LAFCO last fall determined that proponents of the 40-square-mile city would have to pay for the EIR, expected to cost more than $300,000. LAFCO also insisted on an updated fiscal analysis and a revenue neutrality agreement with the county. The incorporation advocacy group Carmel Valley Forum pointed to an Economic and Planning Systems study that found the proposed town would be fiscally viable. Carmel Valley Forum's lawsuit contends LAFCO's decision arbitrarily prevents voters from deciding on incorporation.

With the passage of $42 billion in bonds last November, infrastructure spending has risen to the top of the state Legislature's agenda. More than 60 bills attempt to allocate portions of the money or establish criteria for spending the funds, according to the California Budget Project. Still, there is plenty of legislative activity surrounding other planning and development staples, including housing, the California Environmental Quality Act, flood control and economic development. A number of failed, controversial measures from 2006 have returned in new form: Senate Bill 303 (Ducheny) would require cities and counties to zone for 10 years worth of housing need. Assembly Bill 70 (Jones) would assign local governments some financial liability for levee failures. SB 103 (Cedillo) would require hearings on any economic development subsidies. SB 2 (Cedillo) would make emergency shelters and transitional housing by-right uses in multi-family residential zones. But while many issues in Sacramento are familiar, many of the players are not. No fewer than 30 of the Assembly's 80 members are freshmen, mostly from city councils and boards of supervisors. Some freshmen are even committee chairs, including Democratic Assemblywoman Anna Caballero, who previously was the mayor of Salinas. Some former local officials appear to forget their "roots" when they enter the Capitol, but Caballero is carrying two housing bills sponsored by the League of California Cities. Assembly Bill 1256 would exempt from the state's density bonus law cities and counties that have inclusionary zoning policies. Those policies require developers to provide a certain percentage of new housing units affordable to low- or moderate-income residents or to pay an in-lieu fee. About 170 cities and counties have inclusionary requirements. In recent years, lawmakers have worked with affordable housing advocates and the building industry to expand the density bonus law. The statute now provides for bonuses of up to 35% and the waiver of some local regulations. Pete Parkinson, vice president of policy and legislation for the California Chapter of the American Planning Association, said Caballero's bill is attractive because local governments are getting slammed with density bonus projects. Yet the threshold for density bonus eligibility is low, said Parkinson. A project with as little as 5% of units designated for very low-income residents or 10% for low- or moderate-income residents earns at least some density bonus and a waiver of some regulations. In addition, developers "double-dip" by demanding density bonuses for meeting inclusionary zoning requirements. Affordable housing advocates are skeptical. Brian Augusta, who heads the California Housing Law Project, contended that developers should receive density bonuses for providing affordable units that are mandated by inclusionary zoning. "We want to encourage density bonuses," he said. Caballero's AB 1254 is more complicated. Currently, cities lose a portion of their property tax revenue to "ERAF," a fund for school districts. Also, most affordable housing projects built by nonprofit developers are property tax-exempt. Under AB 1254, cities could deduct from their ERAF payment to schools the amount that a new nonprofit, affordable housing project would have provided in property tax revenue had the project been taxable. "We think the bill would be a great reward for cities that are trying to do the right thing," said Daniel Carrigg, the League's legislative director. It also removes one of the NIMBYs' arguments — that affordable housing projects cost a city money, he said. Caballero's housing bills might be considered minor compared with SB 303. Similar to last year's failed SB 1800, which had the backing of the Schwarzenegger administration and the California Building Industry Association, SB 303 would rewrite big portions of general plan law. Among other things, the bill would require that cities and counties zone up-front for 10 years worth of housing need and make findings about the suitability of parcels zoned for residential development. The bill also would mandate that every element of the general plan encompass a 20-year planning period, and that every element except the housing element be updated every 10 years. The bill specifies retention of the current 5-year housing element updates. In introducing the bill, Ducheny said it would "ensure responsible planning" and boost affordable housing. "Our local governments have the right and responsibility to plan for places for people to live," Ducheny said. "We just want them to go the extra step of making sure that their process provides places that are truly appropriate for the housing they're planning." But the League's Carrigg said the bill conflicts with state and local infill policies. The bill specifies that local governments must make findings that each site zoned for residential development "will realistically accommodate construction of the maximum number of units allowed by the density range applicable to the site." The findings must be based in part on availability of infrastructure and services, environmental constraints, and "market demand for the density and type of housing." It would be difficult to make such findings for many infill sites, said Carrigg, because, "a lot of infill sites are hard work." Plus, nothing in the legislation limits development to the sites in the 10-year zoning. "How can we plan our regions?" Carrigg asked. "This is really going to result in sprawl." The APA's Parkinson, who heads Sonoma County's Permit Resource Management Department, said the concept of a 20-year land use plan is appealing. But he said it is "impractical" to have 10 years worth of zoning in place because it would hinder the ability to plan and phase growth. Flood legislation, which went nowhere in 2006, returns this year with a focus on the Central Valley and the Sacramento-San Joaquin River Delta. The key bill could be SB 5 by Sen. Michael Machado (D-Linden), whose Stockton-based district has extensive flood-prone areas under heavy development pressure. Machado has made clear he is not afraid to fight the building industry over flood control, and SB 5 would prohibit new residential development in areas lacking 500-year flood protection. The bill also tasks the Department of Water Resources with updating flood control plans and flood risk maps. Meanwhile, AB 70 (Jones) is similar to failed legislation from 2006. The idea is to make local governments financially liable for approving development in flood-prone areas. Builders generally oppose the concept because they fear local governments would reject subdivisions in low-lying areas, and local governments oppose because they have little control over levees and regional flood management systems. There also is a great deal of interest regarding climate change in the Legislature. However, legislation concerning land use planning and climate change has not coalesced. Interest in redevelopment reform and eminent domain limitations appears to have faded this year. Contacts: Daniel Carrigg, League of California Cities, (916) 658-8222. Brian Augusta, California Housing Law Project, (916) 446-9241. Pete Parkinson, California Chapter, American Planning Association, (707) 565-1925. California APA legislative platform: www.calapa.org/en/art/?109 Land Use Legislation Introduced This Year These bills have been introduced since December. "Spot bills" are essentially placeholders with few details. The legislative year ends September 14. Economic Development • AB 89 (Garcia). Directs the Business, Transportation and Housing secretary to study financing mechanisms for infrastructure along the border with Mexico. • AB 232 (Price). Spot bill regarding an integrated investment and development strategy for low-income neighborhoods in San Diego, Los Angeles, San Francisco, Oakland and Sacramento. • AB 831 (Parra). Requires the Legislature to review annually all tax breaks and repeal those that do not serve a public purpose. • AB 1272 (Arambula). Requires the Infrastructure and Economic Development Bank (I-Bank) to provide technical support to small and rural communities for local infrastructure and capital projects. • AB 1398 (Arambula). A complete overhaul of the system for awarding hiring tax credits. Among other things, the bill would eliminate the ability to claim multiple tax credits under different programs. • AB 1606 (Arambula). Requires several state agencies to coordinate preparation of a statewide economic development strategic plan, and to develop a system for measuring the performance of all state policies, programs and tax expenditures intended to stimulate the economy. • ABs 1719, 1720, 1721 and 1722 (Arambula). A series of bills concerning economic development, trade and investment policies. • SB 103 (Cedillo). Requires local agencies to conduct hearings on the details of proposed economic development subsidies of at least $25,000 and provide reports after approval. A similar bill failed last year. Flood Control • AB 5 (Wolk). Prohibits cities and counties in the Central Valley from approving new development in flood-prone areas. The bill also authorizes local agencies to adopt their own flood protection plans. • AB 26 (Nakanishi). Exempts Delta flood control maintenance projects from Department of Fish and Game streambed alteration regulations. A similar bill failed last year. • AB 70 (Jones). Makes local governments partially liable if a flood control project fails. • AB 156 (Laird). Increases the Department of Water Resources (DWR) role in Central Valley flood protection. The bill requires DWR to report on levee conditions, map flood-prone areas, undertake levee maintenance, provide annual warning notices to landowners, and establish mitigation banks. • AB 162 (Wolk). Requires cities and counties to make various provisions for flood control in general plans. • SB 5 (Machado). Addresses numerous aspects of flood management and planning. Among other things, the bill prohibits new residential development in any area with less than 500-year flood protection. • SB 6 (Oropeza). Requires local governments to consider global climate change before deciding on new developments. Substantial amendments are likely. • SB 17 (Florez). Renames the Reclamation Board the Central Valley Flood Protection Board and requires the board to review local and regional land use plans for compliance with standards adopted by the board. • SB 34 (Torlakson). Authorizes DWR to collect user fees and assessments to fund flood control in the Delta. Funds for planning • AB 1253 (Caballero) and SB 292 (Wiggins). Spot bills regarding Proposition 84 funding for local and regional planning. • SB 167 (Negrete McLeod). Commits $45 million from Proposition 84 for general plan revisions, general plan implementation, regional blueprint projects, and LAFCO municipal service reviews and spheres of influence. • SB 669 (Torlakson). Makes regional recreation corridors eligible for Proposition 84 planning funds. Housing • AB 239 (DeSaulnier). Authorizes Contra Costa County to increase its real estate recording fee to fund affordable housing. A similar measure failed last year. • AB 414 (Jones). Limits cities' and counties' use of land zoned for nonresidential uses in meeting regional housing needs. • AB 641 (Torrico). Requires that local governments defer all fees on projects with at least 49% affordable units until the certificate of occupancy stage. • ABs 723 and 1096 (DeVore). Spot bills declaring a five-year "CEQA holiday" for urban infill, affordable, employee and farmworker housing projects. • AB 763 (Saldaña). Increases the required notice given to tenants of apartments being converted to condominiums. • AB 872 (Davis). Spot bill providing a CEQA exemption for urban infill projects of fewer than 300 units. • AB 1254 (Caballero). Reduces the shift of property tax revenue from cities and counties to school districts when the city or county approves an affordable housing project. • AB 1256 (Caballero). Exempts local governments from the state density bonus law if the local government has an inclusionary zoning ordinance that mandates a portion of new units be available to low- or moderate-income residents. • AB 1449 (Saldaña). Tightens eligibility for density bonuses and waivers of local regulations. • AB 1497 (Niello). Exempts from land suitable for meeting regional housing needs land that is covered by Williamson Act contracts. • AB 1675 (Nuñez). The speaker's spot bill regarding transit-oriented development. • SB 2 (Cedillo). Makes emergency shelters and transitional housing by-right uses in areas zoned for multi-family residential uses. The bill is similar to last year's SB 1322, which the governor vetoed. • SB 12 (Lowenthal). Revises the Southern California Association of Governments' regional housing needs assessment process to align with the regional transportation plan (see CP&DR Insight, August 2006). The bill has passed the Senate. • SB 303 (Ducheny). A detailed, complex bill that, among other things, requires cities and counties to zone for 10 years worth of housing demand. The legislation is similar to last year's failed SB 1800. • SB 375 (Steinberg). Increases the CEQA exemption for urban infill projects. • SB 900 (Corbett). Increases the ability of local governments to block the conversion of mobile home parks to resident-owned condominiums. Such conversions are used by park owners to avoid rent control. Local government finance • AB 373 (Wolk). Expands the use of Mello-Roos financing to include flood protection, snow removal and graffiti abatement. • AB 934 (Lowenthal). Authorizes creation of up to 100 housing and infrastructure zones in which tax-increment financing would pay for a variety of housing and infrastructure projects. • AB 1221(Ma). Permits a city or county to engage in tax-increment financing to fulfill the goals of a transit village plan. • SB 670 (Correa). Prohibits the imposition of transfer fees when property is sold. Transfer fees have become popular ways to finance affordable housing and open space. AB 980 (Calderon) requires greater disclosure of transfer fees. Natural resources • AB 82 (Evans). Spot bill concerning preservation of agricultural land through local planning. • SB 634 (Wiggins). Requires owners of land covered by the Williamson Act to receive local government approval for the division of land and the construction of any road or building. The bill is partly a response to a situation in Humboldt County in which a Williamson Act landowner acting on an old subdivision map has sold parcels for residential development. • SB 421 (Ducheny). Authorizes the Department of Parks and Recreation to acquire property under a conservation easement or similar restriction. Redevelopment • ACA 2 (Walters) and SCA 1 (McClintock). Constitutional amendments to limit use of eminent domain. • AB 987 (Jones). Permits any low- or moderate-income person to enforce affordability covenants on subsidized housing units. • AB 1169 (DeVore). Spot bill prohibiting adoption or amendment of a redevelopment plan, or the merging of project areas, unless an unnamed state agency approves. • AB 1553 (DeSaulnier). Allows use of tax increment for loans to firefighters for the purchase or rehabilitation of homes in a project area. Other • AB 665 (DeSaulnier). A spot bill calling for creation of the California Growth Management Act. • AB 704 (Eng). Requires local governments to establish a resident advisory commission on the environment to make planning recommendations. • AB 889 (Lieu). Creates a new authority to construct a rail line from Los Angeles International Airport to a Metro Green Line station on Aviation Boulevard. • AB 1066 (Laird). Requires local governments to consider climate change when preparing or updating local coastal programs. • SB 10 (Kehoe). Makes the San Diego Association of Governments responsible for planning a new airport in San Diego County. Currently, an airport authority has the responsibility. • SB 157 (Wiggins). Ratifies a compact between the state and two Indian tribes (The Big Lagoon Rancheria of Humboldt County and the Los Coyotes Band of Cahuilla and Cupeño Indians of San Diego County) to permit development of side-by-side casinos in Barstow (see CP&DR Deals, August 2006). • SB 162 (Negrete McLeod). Requires local agency formation commissions to consider environmental justice when considering boundary changes.

One of the top 10 things that everybody loves is a top 10 list. Some people take such lists very, very seriously and get furious when, for example, their favorite Eagles' number doesn't appear on a list of top 10 songs from the 1970s. Most people take such lists with a few grains of salt. We at CP&DR are not going to be compiling the top 10 songs from any era. But we are going to be putting together some other lists. Best downtowns. Best municipal parks. Most walkable cities. Least walkable cities. Best examples of historic district preservation. Best use of a waterfront in an urban development. You get the idea. We may limit these to the top three or five, depending on the category and the "quality" of the potential entries. Or, heck, maybe we'll blow out some to the top 20. Do you have any ideas for top 10 lists that would interest CP&DR readers? If so, please add a comment at the bottom of this blog. If you've got top 10 lists of your own, go ahead and post those. If you're shy, feel free to email me at pshigley@cp-dr.com. Just remember, our universe is limited to California places. We don't much care about the best zocalo in South America, or the best Danny DiVito movie. We intend to start running the our lists about once a month beginning in July. We might spark a little fury, but mostly we intend to have some fun. - Paul Shigley

One of the most ambitious transit-oriented redevelopment projects in the state is taking shape in an unlikely location. Union City, a mostly working-class suburb just north of Fremont in Alameda County, is converting about 175 acres into a dense urban environment surrounding what city planners hope will become a regional transit hub. Hundreds of housing units are under construction or approved in Union City's Station District, and a developer is negotiating with the city to acquire land for as many as four residential towers of 10 to 24 stories apiece � a project that is also planned to include retail and office space and a pedestrian paseo. Construction on improvements to an existing BART station is beginning this month, and the City Council recently approved a design concept for a public plaza around which much is planned, including a fine arts building and possibly a library. "It will be the new downtown because of the retail, because of the public building, because of the East Plaza. It will be just a great place to hang out," said Mark Evanoff, Union City redevelopment manager. James Corliss, a senior planner for the Metropolitan Transportation Commission, said Union City is located in a critical position along the East Bay transit corridor. "They've got quite a quilt. They've got the multi-modal transit station and an aggressive development plan," Corliss said. "As we look to the future of the Bay Area, we need a lot of these older suburbs to reinvent themselves, as Union City is doing." A 48-year-old city of about 72,000 people, Union City lacks a discernable center of town. Old Alvarado, which dates from the era before incorporation, provides something of an historic district, but it's not really a downtown. Instead, the Station District redevelopment project seeks to convert two longtime eyesores adjacent to a BART station into downtown: a 30-acre former Pacific Gas & Electric pipe storage yard, and the 60-acre site of a long-closed steel mill. Union City's redevelopment agency acquired the PG&E site four years ago for $18 million. The agency acquired the Pacific States Steel Corporation site in a complicated bankruptcy proceeding that lasted more than two decades (see CP&DR Legal Digest , May 2003). Not surprisingly, both sites were contaminated. PG&E handled cleanup of its site, and redevelopment agency land sales paid for remediation of the old steel plant property. While things are moving along now, redevelopment proceeded slowly for years. So, in 2000, the city began an update of the redevelopment plan and its general plan. "It compelled us to really create a vision for our Station District," recalled Planning Manager Joan Malloy. The vision, adopted about five years ago, includes high-density housing, offices and mixed-use development around a multi-modal transit station. At the time, Silicon Valley's tech sector seemed indestructible, so, not surprisingly, the vision was for lots of offices. But the Bay Area's office market has been sluggish for a number of years. Now, Station District planners are emphasizing housing. Developers have already built about 120 single-family houses on the old Pacific States Steel property, and KB Home is developing 216 townhouses on the site. Those projects were aided by the redevelopment agency's provision of road access. The next project to break ground (possibly this month) will be Avalon Bay's 436-unit apartment complex on six acres that used to be a car repair shop, next to the BART station. This is a market-driven project without any redevelopment agency participation, Evanoff said. The project that is generating the most excitement, though, is the proposal from Barry Swenson Builders to construct four residential towers in three phases on the old PG&E site. The first phase would include a 10- to 14-story tower of 100 to 140 units. The second phase would have a slightly taller tower of 120 to 160 units. The third phase would include one tower of 12 to 16 stories and one tower of 12 to 24 stories with as many as 400 units between the two structures. The towers are planned to be for-sale condominiums. Each phase also would include smaller numbers of townhouses and below-market units, and there would be a total of about 60,000 square feet of office, retail and commercial space developed, much of it along a pedestrian paseo. Although negotiations are not complete, the agency anticipates selling the property to Swenson for $30,000 per market-rate residential unit. City officials began negotiating with Swenson last year after other potential deals bogged down when developers told city officials that their goal of up to 80 housing units per acre was not realistic. "Barry Swenson exceeded our expectation, based on what other developers told us was marketable," said Malloy, noting the Swenson project averages more than 110 units an acre. Jessie Thielen, a development project manager for Swenson, said typical four-story condominiums would not be the best use of a site so close to a transit center. Swenson has developed and is developing similar residential towers in San Jose. "Anywhere in the Bay Area where there is a transit hub is the right location," Thielen said. Of course, building condo towers in a city of 1 million people is one thing. Building them in a suburb with few urban amenities is another. But Thielen said the Swenson project will quickly create a "critical mass. You see a lot of transition in the neighborhood when a project like this starts going up," she added. The Swenson project is in the midst of the planning approval and environmental review processes, which both sides hope to complete by the second half of 2008. Although there has been some public concern expressed about traffic, there generally is acceptance of the high-density project. "I've never gone into community meetings where the level of opposition is so little to a project that is so different for a community," Thielen said. She credited city officials for laying the groundwork. While the private-sector component of Station District development is progressing, much of the public portion is more tentative. What the city wants is a station that brings together BART, the Altamont Commuter Express (ACE) train that runs from Stockton to San Jose, Amtrak's Capital Corridor train from Sacramento to San Jose, and the planned Dumbarton rail line that will connect the East Bay with the Peninsula. Alameda County Transit buses (which serve three counties and San Francisco) and local Union City buses would also converge at the station. Only San Jose's Diridon Station and San Francisco's Transbay Terminal would match the Union City station's multiplicity of transit services. Work started this month on BART station improvements, which are planned with an eye toward creating one large concourse for all rail passengers. Negotiations are ongoing with Union Pacific for a deal that would let the Capital Corridor and ACE trains use the UP right-of-way, according to Evanoff. The Dumbarton service is tentatively scheduled to start in 2012, although estimated project costs have doubled. In fact, money for most of the transit portion of the Station District project is not assured. "We're a small community that is trying to facilitate a big regional project," Malloy said. "We're looking at all options for how to keep this moving forward. It gets really complicated when you get into the regional aspects." Plans for other public facilities are also tentative, but progressing. The City Council in February approved a concept plan by ROMA Design Group of San Francisco for the East Plaza, adjacent to the transit station. The plaza would have space for a farmers market and outdoor events, a fountain, public art, and small retail spaces. ROMA has also prepared conceptual drawings for a 30,000-square-foot fine arts building that would provide meeting and performing spaces, studios and exhibit halls. A library is planned either as part of the East Plaza or next to the existing civic center, which is farther from the transit station but within the Station District. Contacts: Mark Evanoff, Union City Redevelopment Agency, (510) 675-5345. Joan Malloy, Union City Planning Division, (510) 675-5319. Jessie Thielen, Barry Swenson Builders, (408) 938-6312. James Corliss, Metropolitan Transportation Commission, (510) 817-5709.

The right combination of zoning changes and decreased parking requirements can make infill projects feasible in some of the state's most urban settings. That is the conclusion of Solimar Research Group, which continues to investigate land use options for crowded urban areas. Recently, we explored how regulatory changes affect the financial feasibility of infill projects, and then applied our models to the land use surrounding a major rail extension in Los Angeles. The results should prove interesting to any agency that is approaching the issue of rapid growth with a strategy of high density, transit-oriented development. We sought to calculate the degree to which changes in parking and density policy, as well to zoning, will shrink the notoriously stubborn gap between planning ideal and development reality. Our comprehensive pro-forma analyses revealed that while parking policy affects feasibility more than density allowance, reliance on one or the other is politically unrealistic. A combined strategy is essential. On the other hand, key zone changes may prove a powerful, singular tool in getting infill development off the ground. We further explored how these proposed policy strategies would play out in the very real built environment of the planned Exposition Line extension of the Los Angeles Metro Rail system. Our parcel-by-parcel GIS analysis of infill opportunities surrounding proposed rail stations highlights the infill potential of underutilized industrial land along transit corridors. Grounded Analyses To ensure the "real-time" relevancy of our calculations, we consulted local developers to identify actual development models. Five infill prototypes were selected, and examples of each — from an 8-10 unit townhouse to a 100-200 unit mixed-use project — are currently under construction. We then applied an "as is" pro-forma feasibility model to each, one based on current zoning standards and the industry's minimum expected 15% net margin. With our feasibility baselines established, we analyzied the fiscal impact of incremental increases or decreases in density and parking requirements. The selection of these two policies as regulatory variables was straightforward: one is a powerful determinant of gross revenue, the other a huge booster of project costs. We also calculated the impact on each prototype of building in either industrial or commercial zones. Combined Regulation Our pro-forma for development prototype 2A exemplifies the political near-impossibility of relying on a single regulation to promote infill in Los Angeles. Prototype 2A is a small, mixed-use project of 54 units, with a current feasibility gap of $1.2 million. A 50% density bonus reduces that gap to only $900,000; a 100% density bonus to only $700,000. While feasibility may arrive with 150% bonus, attendant density, height and FAR changes to the C-1 and C-M zones in which this project would be built are unlikely. Construction of prototype 2A also is unlikely without a change in parking requirements. We found that only a 50% decrease in the number of required parking spaces reduces the $1.2 million gap down to $400,000. That is still too much. But a synergy of more modest changes produces a viable alternative. Our study indicates that a 75% density bonus combined with a 25-50% parking reduction provide enough incentive for developers to pursue projects of this size. This outcome repeated itself in our calculations for prototype developments of various sizes. EXPO Application After calculating needed regulatory and zoning incentives, we took our prototypes to a built environment of high infill potential. The Exposition Line is scheduled for completion in 2010. It will serve an almost entirely developed area. We drew circular study zones around the planned La Brea, La Cienega, Crenshaw, Western and Vermont stations. Our GIS "screening" of parcels around the La Cienega stop reveals a repeated pattern of industrial under-use that, as our pro-formas indicate, should be targeted for infill. Nearly 25% of the half-mile area surrounding the station is zoned industrial/light manufacturing, much of that characterized by large parcels. In addition, many parcels are underutilized and ideal for infill redevelopment. Finally, we identified parcels along the La Cienega Boulevard commercial strip that could be assembled into spaces that would increase the feasibility of projects the scale of Prototype 2A. These projects become even more realistic with the regulatory changes identified above. Solimar's complete fiscal and land-use analysis of infill potential along the Expo line is available at: http://www.solimar.org/pdfs/Expo_Final_3-30.pdf . Greg Goodfellow is a research associate and project manager for Solimar Research Group, parent company of CP&DR .

The water supply analysis for one of the largest housing developments ever approved in the Central Valley has been rejected by the state Supreme Court. The court faulted the water study in the environmental impact report for the 20,000-unit Sunrise-Douglas community plan outside Sacramento because the study did not adequately describe long-term water sources and the impacts of using those sources. "While the EIR identifies the intended water sources in general terms, it does not clearly and coherently explain, using material properly stated or incorporated in the EIR, how the long-term demand is likely to be met with those sources, the environmental impacts of exploiting those sources, and how those impacts are to be mitigated," the state's highest court ruled. The court also rejected the EIR's analysis of the impacts of groundwater pumping on the Cosumnes River, which provides critical habitat for federally protected steelhead trout and fall-run Chinook salmon. Sacramento County approved the community plan for 6,000 acres of pastureland south of Highway 50 in 2002 (see CP&DR Local Watch , August 2002 ). The plan calls for approximately 20,000 housing units and nearly 500 acres of commercial and office development. At the same time, the county also approved the 10,000-unit Sunridge specific plan covering nearly half of the community plan site. The property lies within the City of Rancho Cordova, which incorporated a few months after the county approved the plans and zoning. The city has been implementing the plans. Angelo Tsakapoulos's AKT Development is the primary developer. Residents of the area and environmentalists sued the county (the city has since become the defendant) over the EIR for the plans. The lawsuit centered on the water supply, as local residents feared the impacts of large-scale groundwater pumping. Essentially, the project called for using a well field about four miles south of the plan area for short-term supplies. Long-term, the project would be supplied by the wells and Sacramento County Water Agency's new diversion of Sacramento River water. A Sacramento County superior court judge ruled against the project opponents. In an unusually terse opinion, the Third District Court of Appeal concluded the opponents were guilty of "misstatements and omissions" and rejected the opponents' contentions (see CP&DR Legal Digest , April 2005 , March 2005 ). But in a 6-1 decision, the state Supreme Court found it was the county — not the opposition — that was less than forthcoming. "The principal disputed issue," Supreme Court Justice Kathryn Mickle Werdegar wrote for the majority, "is how firmly future water supplies for a proposed project must be identified or, to put the question in reverse, what level of uncertainty regarding the availability of water supplies can be tolerated in an EIR for a land use plan." Justice Werdegar laid out the evolution of case law at the appellate court level. The first case was Santiago County Water Dist. v. County of Orange , (1981) 118 Cal.App.3d 818, in which the court rejected an EIR for a mining project because the EIR did not address the impacts of supplying the mine with up to 15,000 gallons of water per day. The next case in line was the landmark Diablo Grande decision, Stanislaus Natural Heritage Project v. County of Stanislaus , (1996) 48 Cal.App.4th 182. In that case, the court threw out an EIR for the 5,000-unit Diablo Grande project that listed possible long-term water supplies but deferred analysis of the water acquisitions until later phases of project development (see CP&DR Legal Digest , September 1996). The next case was Napa Citizens for Honest Government v. Napa County Bd. of Supervisors , (2001) Cal.App.4th 342, in which the court disapproved an EIR that did not disclose possible alternative water sources and the impacts of using them (see CP&DR Legal Digest , September 2001 ). Finally, in Santa Clarita Organization for Planning the Environment v. County of Los Angeles , (2003) 106 Cal.App.4th 715, the court rejected an EIR that relied on "paper water" from the over-subscribed State Water Project (see CP&DR Legal Digest , April 2003 ). While these decisions provide no definitive standard, according to state Supreme Court, they provide four principles: • The California Environmental Quality Act (CEQA) is not satisfied unless decision-makers are presented with sufficient facts to evaluate how water will be supplied to a project. • An EIR for a project to be built over a number of years cannot be limited to water supply for the first few years. • Future water supplies must "bear a likelihood of actually proving available. • When water sources are uncertain, there must be a discussion of possible replacement sources or alternatives, and the impacts of those contingencies. It is not enough to say that development will not proceed if anticipated water fails to materialize. The court also discussed legislation of recent vintage. In 1995, lawmakers approved SB 901 (Costa), requiring cities and counties considering a large development proposal to obtain a "water supply assessment" from the appropriate water supplier. Six years later, the Legislature approved two more bills: SB 221 (Kuehl) requires a city or county considering a residential subdivision of at least 500 units to obtain written verification that adequate water is available for the project and other planned uses for 20 years. Meanwhile, SB 610 (Costa) attempts to close loopholes in SB 901 and emphasizes the importance of 20-year urban water management plans (see CP&DR , October 2001 , October 1995). After laying out this background, the court then considered the specifics of the Rancho Cordova project. The community and specific plans contemplate the use of 5,000 to 10,000 acre-feet of water from the well field during the near-term. (These wells are serving the 1,800 houses built since project approval.) Opponents contended the EIR did not adequately describe competing uses for this groundwater, but the court was satisfied with this portion of the environmental study. Long-term supply, however, was a different story. According to the court, the EIR discussed long-term needs — based on the county general plan — within the county water agency's "Zone 40." This zone encompasses much of southern Sacramento County, including the project area. The EIR also addressed water sources and the Sacramento Water Forum, a collection of agencies and stakeholders that adopted a plan for competing American River water uses. These estimates of demand and supply, though, were not consistent throughout the EIR, the court noted, and it appeared that a supply gap for Zone 40 remained. "The general answer given in the EIR, and echoed by real parties and Rancho Cordova, is that the new surface water supplies are to be used conjunctively with groundwater supplies. But this explanation is vague and unquantified," Werdegar wrote. "How much groundwater, existing and new, will be used with how much new surface water? In what combinations will these sources be used during wet and dry years, respectively? No such description of planned future water use appears in the FEIR." The EIR appeared to tier off of a future analysis of what was at the time a pending water agency plan for Zone 40. But an EIR may not tier of off a document that doesn't exist. The Rancho Cordova project EIR, the court ruled, could have tiered off of an earlier analysis for the Water Forum proposal. However, the EIR's relationship to the Water Forum proposal was unclear, even though the EIR included a discussion of impacts and mitigations in the Water Forum EIR. "The reader attempting to understand the county's plan for providing water to the entire Sunrise Douglas development is left to rely on inference and speculation," Werdegar wrote. Developers pointed to a condition of project approval that prohibits approval of entitlements if water is not available. But the court dismissed the argument and cited Stanislaus Natural Heritage: "‘It must be borne in mind that the EIR must address the project and assumes the project will be built.'" As for impacts of groundwater pumping on the Cosumnes River, the court found that the EIR's brief dismissal of concerns expressed by environmentalists and wildlife agencies was not supported by substantial evidence. In a dissenting opinion, Justice Marvin Baxter said the majority was imposing requirements beyond those contained in CEQA or the Water Code. "Under the majority's new rule … once a city or county approves a general plan, it could not approve a project in furtherance of that plan unless or until it had secured water sources for build out of the entire general plan. Northing in CEQA requires such a result," Baxter wrote. To this, Werdegar responded, " ong-term local water planning is not a burden that must be taken up anew, for CEQA purposes, each time a development is proposed; rather, cities and counties may rely on existing urban water management plan's future demand accounting." The Case: Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova , No. S132972, 07 C.D.O.S. 1131, 2007 DJDAR 1453. Filed February 1, 2007. The Lawyers: For Vineyard Area Citizens: Stephan Volker, (510) 496-0600. For the city: Julia Bond, Meyers, Riback, Silver & Wilson, (510) 808-2000. For Sunrise Douglas Property Owners Association: James Moose, Remy, Thomas, Moose & Manley, (916) 443-2745.

Yes, it's been 37 years since Gov. Ronald Reagan signed the California Environmental Quality Act (CEQA) into law. But we're still arguing about the statute's most basic definitions. The California Supreme Court will get another crack at a very basic question — what constitutes a "project" that is subject to CEQA — in a case with the memorable name Save Tara v. City of West Hollywood (No. S151402). Surprisingly, the Cal Supremes have emerged as a force for strict CEQA enforcement. However, the latest case may offer the court an opportunity to swing the other way. The specific question in the West Hollywood case is this: Does the agreement between the city and the developer that describes the proposal in detail — but which expressly withholds any commitment to a definite course of action and is conditioned upon CEQA compliance — constitute "approval" of a "project" necessitating environmental review? The case involves a Colonial revival mansion called Laurel Place, which the previous owner donated to the city. Preservationists want to protect the approximately 90-year-old mansion as-is. The city wants to restore Laurel Place for apartments and build a U-shaped apartment building around the mansion — all to provide housing for poor senior citizens. A state appellate court ruled 2-1 that West Hollywood should have completed an environmental impact report before entering into a conditional agreement in 2004 with a nonprofit housing developer for the sale of Laurel Place (LINK). The city argued that the agreement was contingent, in part, on completion of environmental review — and the city certified an EIR for the 28-unit project last year. But the court said the city waited too long to commence the CEQA process. The ruling appeared to conflict with a decision issued only a few months earlier in which a different appellate panel ruled that the McCloud Community Service District's conditional agreement with Nestlé for construction of a water bottling plant was not yet a project under CEQA . The California Supreme Court accepted only two CEQA cases in the 10 years from 1993 to 2003. Since then, the court has accepted five cases. In two rulings thus far, the court has hewed a strict CEQA line. Last year, the court said California State University must mitigate off-campus impacts of development at the Monterey Bay campus. And earlier this year, the court rejected a water analysis for a 20,000-unit development near Sacramento. By July 2, the court is scheduled to rule on a whether the Solano County Airport Land Use Commission should have undertaken environmental review of a compatibility plan for areas surrounding Travis Air Force Base — a ruling that will likely call for an environmental analysis. (The other pending case involves the EIR for the Cal-Fed Bay Delta project.) The West Hollywood case invites the court to tilt the other direction. A number of CEQA experts said the appellate court went too far and noted that the decision in effect invalidated the 2006 EIR, even though no one sued over that document and no court ever reviewed it. Of course, the other side argues that the city essentially committed itself when it approved the conditional agreement, so any future EIR would amount to after-the-fact rationalization, which CEQA prohibits. - Paul Shigley

LAS VEGAS _ Everywhere you go on the planning and development circuit these days, people are talking about mixed use. But does everybody really want to build it? Or lease it? Or live in it? Or finance it? Sometimes I'm not so sure. I figured the ultimate test was here during the 50th annual convention of the International Congress of Shopping Centers, where 50,000 people in the retail business gathered in one of the biggest conventions in America. (It's so big that the convention center has streets with names – 20th Avenue, D Street – and the biggest retailers and developers have special business cards made up with their Convention Center address on them.) As I expected, everybody is talking about mixed use. But the real estate business, like the planning business, is segregated by sector. You know how the New Urbanists are always complaining about a segregation of uses created by the zoning code? Well, that segregation is also institutionalized in the real estate business as well. There are retail developers, single-family developers, condo developers, business park developers. They each tend to do only one thing and they have specialized lenders and financial partners behind them, who also understand only one of these "asset classes," as real estate people call them. Nevertheless, mixed use was a big topic of discussion at ICSC for a variety of reasons, mostly having to do with money. Some shopping centers have excess land in the form of surface parking lots that could be developed or sold off. In urban areas, the mall owners recognize as well that they can generate more revenue by "going up" – developing housing or office space or some other use in a second, third, or fourth floor. One thing you get at ICSC – which we don't always get at planning events – is the private-sector take on things. Jon Peterson of The Peterson Co., a Northern Virginia-based developer, pointed out that while mixed-use can sometimes minimize market risk by diversifying the real estate development you're building, it can also increase the risk if you lay your chips on something that is out of fashion. "If you're trying to put some office space above a retail component and that office market isn't there and this building is a centerpiece of your project, you can't go forward with it," Peterson said at a mixed-use session. "You're not going to build a 100,000 square foot office building in the middle of your project just to get the ground-floor retail." At the same time, if you don't build the building, you may have a critical hole in the middle of your project. Still, there's a sense that the retail real estate folks are beginning to catch on that mixed use is not entirely newfangled. At the same mixed-use session, Tom D'Alesandro of General Growth in Chicago, which has worked on many master-planned communities, said that in developing Reston Town Center – a New Urbanist downtown in a '70s master-planned community in Virginia – "we took the DNA of the large-scale master-planned community, concentrated it, and condensed it into a more vibrant focus point." They also had to make lemonade out of lemons. Squeezed between three large malls, downtown Reston was never going to get a department store, so they used mixed-use as a substitute. Still, there's always a sense at ICSC that somebody else is making a lot of money off of your idea and you're somehow not realizing that value. One veteran retail broker told me that retail doesn't get a big financial pop from mixed-use – but seems to create value for offices and condos, which get big increases in value as a result. And although he cast his viewpoint as a lament, I think it's not so bad. If tunnel-vision retail developers think more broadly about the mixed-use district and towns they're located in, that's all to the good. - Bill Fulton

A proposal to develop what amounts to a 5,000 housing-unit new town in the foothills of Yuba County is advancing, but the project still faces numerous hurdles. In addition to concerns raised by environmentalists and slow-growth advocates, numerous government agencies have questioned both the project's environmental impact report (EIR) and the wisdom of building a new town in a very rural location nearly 15 miles from the nearest services. Proponents of Yuba Highlands counter that the project is consistent with a 1993 community plan for the area and provides a preferable alternative to additional development of Yuba County's farmland and floodplains. In late May, the Yuba County Board of Supervisors began considering whether to put the project on the ballot. But only one week earlier, the supervisors voted 3-2 to deny an appeal of the Planning Commission's certification of the Yuba Highlands EIR. But, because local practice requires a four-fifths vote for statements of overriding consideration — which the EIR contains because of the project's significant, unavoidable impacts — the effect of the 3-2 vote was unclear, and supervisors are scheduled to make a final decision on the EIR in June. Assuming the EIR is in place, the board could also consider an area plan, a development agreement and a general plan amendment in June. The county's approval of the EIR and project would almost guarantee lawsuits. At least six government agencies — the attorney general's office, Caltrans, the Department of Fish and Game (DFG), the Central Valley Regional Water Quality Control Board, the Sacramento Area Council of Governments (SACOG) and the Northern Sierra Air Quality Management District — have called the EIR inadequate, and some surrounding local governments have expressed concern about the project's traffic, air quality and housing impacts. "They really just bulled their way through and didn't address any of the city's concerns," Marysville Community Development Director Gary Price said. "We think the EIR is completely inadequate." "You are not seeing the complete picture," Jeff Finn, a DFG biologist, told the Board of Supervisors during a standing-room-only public hearing for the EIR appeal. Supervisors Hal Stocker and Mary Jane Griego agreed, saying the traffic, water, wildlife and air quality analyses were incomplete. "If this is a good EIR, I'd hate to see a bad one," said Stocker, an outspoken project opponent whom the developer has tried to disqualify from considering the project. "It has more holes than Swiss cheese." Complicating things further is the project's location adjacent to Beale Air Force Base. Although the Air Force is officially neutral on Yuba Highlands, project detractors say the development would unnecessarily encroach on the 22,000-acre base, potentially threatening its future viability. Yuba County has long been one of the poorest in California. Although it has increasingly become a home to Sacramento-area commuters, the county's unemployment rate remains high: It was 9.5% in April, roughly double the state rate, according to the state Employment Development Department. Per capita income is approximately one-third less than the state average. Partly because of the weak local economy, the county has warmly greeted numerous development proposals. Depending on who is counting, at least 15,000 housing units in a county of only 70,000 people are somewhere in the pipeline — and that estimate doesn't include thousands of houses proposed for the tiny City of Wheatland. During the 1980s and 1990s, Yuba County designated new growth areas. One of them is River Highlands, a 21,800-acre area approximately 20 miles east of Marysville, between Beale and the Nevada County line. The River Highlands community plan, adopted as part of the general plan, designated much of the area for five-acre parcels. A core area, however, was designated for two units per acre. In 2001, developer Gary Gallelli proposed the Yuba Highlands project for the core area. The review process ground on for years until October 2006, when the county released a final EIR. At that point, what had been a proposed specific plan became an area plan because the proposal lacks aspects required of a specific plan, such as detailed infrastructure and financing plans. Early this year, a divided Yuba County Planning Commission certified the EIR and recommended project approval. The project proposes 5,100 dwelling units on about 1,900 acres of the 2,900-acre site. Also proposed are 85 acres of commercial development in three locations, a business park, a golf course, an 81-acre park and three schools. Proponents say the site is ideal for growth because it is not in a floodplain (unlike many new Yuba County developments), nor is the mostly treeless grassland valuable farmland or high-quality oak woodlands. But opponents contend the site is simply too remote, and that its proximity to Beale and the 11,000-acre Spenceville State Wildlife Area is a drawback. The project site has no municipal services, infrastructure, schools, shopping or anything else, Supervisor Griego pointed out. "Just because you're not in a flood zone doesn't mean you are in a proper place to develop," Griego said. "We have enough development to supply us for many, many years to come. We have no shortage of houses." Yuba Highlands would be a 15- to 20-mile drive on two-lane country roads to the nearest urban areas, and, according to the EIR, would generate 24,000 automobile trips a day on only one county road to Marysville. Yet Caltrans, SACOG and the City of Marysville question even that high number, as they contend the EIR's traffic analysis is inadequate because it is based on outdated statistics. They also argue that the EIR improperly defers mitigations. Related to the traffic concerns are air quality — and global warming — worries. The attorney general's office urged county supervisors to reject the EIR because it "completely ignores impacts from greenhouse gas emissions." Yuba County received the attorney general's protest letter only a few weeks after the attorney general sued San Bernardino County for not addressing global warming in a general plan update. Meanwhile, downwind Nevada County is concerned about air pollution from the development. Western Nevada County is a "non-attainment" area because of ozone pollution. Emissions blowing in from Yuba Highlands would more than offset every measure that the Northern Sierra Air Quality Management District has planned for western Nevada County to reach attainment, the district's Sam Longmire said. Richard Thomas, a longtime Sierra Club organizer and chair of Friends of Spenceville, said the development would send 7,000 cars a day on a road through the wildlife area, threatening its integrity. Department of Fish and Game representatives have raised similar concerns and contend the EIR does not fully address the impacts of Yuba Highlands and other new developments on the wildlife area. The DFG's Finn said the EIR contains conclusions without scientific support. And then there is Beale. For decades, the Air Force base has been the cornerstone of Yuba and Sutter counties' economy. The base has about 5,000 employees, making it by far the largest employer in the area. Recognizing that land use conflicts have been a factor in some California base closures, the Governor's Office of Planning and Research is managing a Beale joint land use study with the Department of Defense and other interested parties. So far, the process has identified a number of existing and potential conflicts, but a draft plan, originally due in March, has not been released. Two years ago, Beale's commander expressed concerns about Yuba Highlands. Since then, the commander has changed and the Air Force has gone publicly mute. During recent public hearings, project opponents and proponents have argued over whose position better supports Beale. Supervisor Griego said that a housing development adjacent to the base conflicts with Beale's operations and sends the wrong message to the Pentagon. William Kopper, an attorney for labor unions that appealed the EIR, said the environmental document uses the wrong noise standard. Instead of measuring single-instance noise from Air Force planes, the EIR relies on a 24-hour standard that is skewed by long periods of quiet to suggest that homeowners in the proposed development would not be bothered by military aircraft, he said. But Supervisor Dan Logue said that Beale leaders told him they want to see Yuba Highlands go forward because it would provide housing for Beale personnel, an argument also advanced by some community liaisons to Beale and by retired Air Force personnel. Water is also an issue. Developer Gallelli plans to rely on groundwater — supplied by the Yuba County Water Agency and distributed via a community services district — and the EIR says groundwater is plentiful. However, the Regional Water Quality Control Board contends that the groundwater source is "underflow" of the Yuba River and, therefore, is water under the state's jurisdiction. If that is the case, the state would conduct a lengthy process to determine who is entitled to use the water. Supervisors Logue and Don Schrader both said they were comfortable with the EIR's water analysis because the project will stop if the developer can't get access to water. Project opponents, however, note that courts have been reluctant to accept that line of reasoning. But project backers say the time has arrived to stop studying and move ahead. Richard Floch, a planning consultant for the developer, said Yuba County officials adopted the original River Highlands community plan because they could see growth coming. The Yuba Highlands plan is simply the next step, he said. Contracts are in place to provide water and the Wheatland-based school district is prepared to provide new schools. Planners have clustered housing away from areas that get the most noise from Beale, and they have proposed a mix of commercial and industrial uses to reduce vehicle travel — all of which improves on the original plan, he said. If the county rejects Yuba Highlands, Floch asked, then what is the value of long-term planning? To which Logue says: "I wish we could go back to 1993 because I guarantee I wouldn't have supported this project." Yet Logue appears to be a project supporter now, as does Schrader, albeit a wary one. "Why," asked Schrader, "do I have the feeling this is going to end up before a person with a black robe?" Resources: Yuba Highlands area plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/Yuba%20Highlands%20Area%20Plan/default.aspx River Highlands community plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/River%20Highlands%20Community%20Plan/default.aspx Beale joint land use study: http://www.cajlus.com/beale_home.htm Friends of Spenceville: http://www.spenceville.org/

A real estate company's purchase at a tax sale of townhouses owned by the Los Angeles County Housing Authority is not valid, the Second District Court of Appeal has ruled. How could real estate owned by a public agency get sold for nonpayment of taxes? Erroneously. During the 1980s, E.A. Reeves Partnership contracted with the state to build a low-income townhouse project on lots 14, 15 and 16 of the Springdale Tract, along Willowbrook Avenue, in South Central Los Angeles. After the housing was built, Reeves conveyed the property to the state. However, a scrivener's error in the grant deed omitted reference to parcels 15 and 16. When the state sold the project to the county Housing Authority in 1990, the error was perpetuated. The Housing Authority notified the county auditor of ownership by a tax-exempt entity, but failed to tell the county assessor, which continued to send tax bills for lots 15 and 16 to Reeves. The taxes went unpaid, and in 1995 Hector Nevarez acquired the two lots at a tax sale. When Nevarez failed to pay taxes, the assessor conducted another tax sale in 2003, at which L&B Real Estate acquired lots 15 and 16 for $99,000. When L&B learned that the Housing Authority was asserting ownership, L&B filed suit to clear up the title. The Housing Authority filed a counter-complaint contending the tax deed was void. Los Angeles County Superior Court Judge Alice Altoon ruled that the property could not be sold at a tax sale and the Housing Authority was the owner. Ordinarily, public property is exempt from taxation and, therefore, cannot be sold for nonpayment of taxes. On appeal, L&B argued that the usual rule did not apply because the Housing Authority had waived its tax exempt status by not complying with the Revenue and Taxation Code, because state law required L&B's and Nevarez's tax deeds to be presumed valid, and because the Housing Authority's attempted to invalidate the tax deed too late. A unanimous three-judge panel of the Second District, Division Eight, rejected all three arguments. The statutes cited by L&B for the proposition that the Housing Authority waived its tax exempt statues (Revenue and Taxation Code §§ 5082.1 and 4987) are inapplicable, the court ruled. The first section concerns cancellation of tax liens when property is acquired by the government, while the second regards cancellation of wrongly imposed taxes. As for the presumptive validity of the tax deeds, the court said, "Among the jurisdictional prerequisites to a valid tax deed is property legally subject to being taxed." In this instance, there was no tax liability. To L&B's argument that there was a one-year statute of limitations, the court said the time limit does not apply because "the defect in title was jurisdictional. The Authority remained in possession of the property since 1990." Only in a footnote did the court cut to the chase: The townhouse project straddles all three lots, and a large "Community Development Commission, County of Los Angeles" sign sits in front. L&B did not obtain a title report until after the sale, and that report mentioned documents in the chain of title indicating that all three lots were intended to be conveyed originally. "In short, L&B either knew or should have known it was buying property that belonged to the Authority," Justice Laurence Rubin wrote for the court. A lawsuit in Los Angeles County Superior Court in which L&B seeks return of the $99,000 purchase amount is pending. The Case: L&B Real Estate v. Housing Authority of the County of Los Angeles , No. B189740, 07 C.D.O.S. 3981, 2007 DJDAR 5013. Filed April 16, 2007. The Lawyers: For L&B: Michael Ezer, Ezer, Williamson & Brown, (310) 277-7747. For the Housing Authority: Wayne Grajewski, Brown, Winfield & Canzoneri, (213) 687-2100.