Despite a sluggish California economy, the state agency charged with business development and job creation appears to be in for a substantial downsizing. The administration's proposed 2003-04 fiscal year budget for the Technology, Trade and Commerce Agency keeps the agency's Infrastructure and Economic Development Bank spending at a constant level, but the proposal reduces spending on all other agency programs by about 70%. Under the proposed budget, many programs would be eliminated and more than half of the agency's employees cut. Those cuts follow a 15% agency spending reduction during the current fiscal year. The governor's budget proposal is widely seen as a non-starter at the Capitol. However, while schools, housing, transportation and other programs have their defenders in Sacramento, almost no one has rushed to aid the trade agency. The Legislative Analyst's Office (LAO) supports the administration's proposed reductions — and actually urges further reductions. The LAO also recommends returning the agency to department status. Exactly why the trade agency is being cut so severely is unclear. The Department of Finance budget summary simply states that because of the current-year budget cuts, "the agency has reorganized to maintain operational integrity within the reducing funding levels." The governor's office referred to the trade agency, whose spokesman did not return telephone calls. It is worth noting that the spending reductions follow a late 2001 State Auditor's report — prepared at the request of lawmakers — that found the agency's planing for economic development was "fragmented and incomplete." The auditor also questioned the agency's method of quantifying program success (see , March 2002). The auditor recommended big changes at the agency, but it is unclear how the agency followed up. The proposed budget provides no money for tourism promotion, the manufacturing technology program, a state and regional technology investment program, various rural technology efforts, and the Office of Military Base Reuse and Retention. Spending on science, technology and innovation programs would be cut to $131,000 — down from $17.9 million only two years ago, according to the LAO. The only parts of the trade agency budget that would not get whacked are the infrastructure bank, which provides loans to local governments (see , October 2002), and a program to subsidize movie and television production. The infrastructure bank is pegged for $76.2 million, which would amount to about 70% of the agency's total budget in 2003-04. The filming subsidies would become the agency's second-largest program at $8.2 million. The LAO recommended eliminating the filming subsidies of up to $300,000 per project, which cover things such as public safety expenses and public property use fees. The LAO found that the subsidies typically amounted to only 0.2% of production costs — not nearly enough to compensate for currency exchange rates and labor discounts that have drawn some film and television production out of California and the United States. "It is unclear what the rationale is for this particular subsidy," the LAO stated. "These film-related fees are part of the cost of doing business and we have no information suggesting that they are either inappropriate or unreasonably high in California." The LAO also recommended eliminating the foreign trade offices. The administration proposes $3.8 million to keep open 12 foreign trade offices — down from $5.6 million in 2001-02. The LAO has previously recommended eliminating the program because other entities, including the federal government, do similar work, analyst Todd Clark said. The state has exports of about $100 billion annually, yet the state's foreign trade offices claim a role in only $200 million to $300 million of that total — and there is no evidence those $200 million to $300 million in transactions would not have occurred anyway, Clark said. Carol Whiteside, president of the Great Valley Center and an official who worked on economic development in the Wilson administration, said the state should eliminate its foreign trade offices before cutting other economic development programs. In particular, she said, the state should maintain programs for rural areas, including the rural "e-commerce" grant program. "If you have cities with 15% and 25% unemployment, like we do in the Central Valley, you have to have some kind of intervention," Whiteside said. The rural e-commerce grants, which the Great Valley Center has received in the past, help rural areas that otherwise would see no investment in technology infrastructure, she said. Meanwhile, City of Oceanside Economic Development Director Jane McVey questioned the proposed elimination of tourism promotion. The state's tourism website and the California Welcome Centers are more important than ever, she contended. "To not have a tourism budget is detrimental in the long term because there are lots of spin-off benefits," McVey said. Facilities that serve tourists can also benefit locals, and efforts to attract tourists result in more attractive communities, she said. Furthermore, state fiscal policy makes the hotel bed tax attractive to local governments because locals can set the rate and spend the money on anything. Eleven years ago, in the midst of a serious recession, then-Gov. Wilson elevated the Department of Commerce to its current agency status. Before then, the entity had been a department within the Business, Transportation and Housing Agency. The LAO did not favor the structural change at the time and has now recommended returning the agency to department status. The move would not necessarily save much money. "It's a matter of size and function," Clark said. With the proposed budget cuts, the agency will be down to 100 full-time employees. And, like a department, the agency implements programs — unlike other agencies that manage departments which carry out the programs. But Whiteside disagreed with the LAO. "If it has agency status and it has a secretary in the governor's cabinet, it makes economic development and job creation a high priority," she said. The governor's "May revise" of the budget is due this month, and it could tell even more about the fate of the trade agency. Contacts: Todd Clark, Legislative Analyst's Office, (916) 445-4656. Carol Whiteside, Great Valley Center, (209) 522-5103. Jane McVey, City of Oceanside, (760) 435-3352. LAO's website: www.lao.ca.gov Department of Finance budget summary: www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm

Throughout the high-stakes poker game that coastal cities and a giant irrigation district have been playing for the past seven years in the California desert � with a rich pot of Colorado River water the prize � the Salton Sea has been a peripheral presence, like a high-roller's mistress standing just outside the glare of the lights. But events earlier this year suggest that the ecologically ailing drainage sump at the heart of the Imperial Valley has really been manipulating the game all along. And as California grows more desperate to resolve the lingering dispute that has cut deeply into one of its key sources of water, the Salton Sea's future seems likely to become a matter of pressing interest in every corner of the state. It will, in fact, provide a test of whether the state's voters and political leaders regard California's vast water-supply infrastructure as a single interconnected system, or whether they reserve their interest only for the plumbing in their own neighborhoods. The primary poker players in this game are the Imperial Irrigation District (IID), the San Diego County Water Authority (SDCWA) and the Metropolitan Water District (MWD). They have been haggling for years over a proposal to shift some Colorado River water from IID to SDCWA, which now gets most of its water from MWD (see CP&DR Environment Watch, December 2002). That transfer would allow MWD to send less water to San Diego, making it possible for the Met to reduce its withdrawals from the Colorado River. That reduction is, in turn, key to California's ability to keep its use of Colorado River water at 4.4 million acre-feet annually, the quantity to which it is legally entitled. California has been exceeding that amount by as much as 800,000 acre-feet a year, and failure to reach final agreement on the IID-SDCWA transfer caused Interior Secretary Gale Norton's January 1 order to reduce the state's Colorado River allocation by 620,000 acre-feet. At least publicly, the failure of the deal during the waning days of 2002 was blamed initially on the negotiators' inability to agree about mechanisms preventing the water transfer from economically harming the Imperial Valley. In order to free up the water for sale to San Diego, Imperial farmers planned to take some of their land out of production. Over the long term, conservation measures would take the place of fallowing, allowing the land to again be planted in crops. But any mention of fallowing alarmed many in the county's agriculture-dependent towns, who feared it would mean lost jobs and reduced sales of farm-related products in an area with California's highest unemployment rate. While a hit on the local farm economy may still be a leading concern, developments during the first few months of 2003 indicate that Imperial County farmers had a much bigger fear: The water transfer's effect on the Salton Sea, which is both the valley's boon and its curse. Without the sea to accept irrigation runoff from Imperial Valley farms, there would be no Imperial Valley agriculture. The valley's fields require flooding with irrigation water to flush salts from the soil that would otherwise poison crops. There is no place for that irrigation runoff to drain except the Salton Sea. That runoff is the primary source of inflow to the sea, which has no outlet. If too much flows in, the sea expands, flooding private property along its shoreline; if too little flows in, the sea shrinks through evaporation, becoming too saline to support life and exposing salt flats to the wind, which whips them into unhealthy dust clouds. Reducing irrigation so the water can be sold to San Diego means the sea � its salinity already increasing because salt flushed into it cannot leave � could shrink and grow saltier even faster, quickly threatening its viability as a critical food source, nursery and wintering habitat for millions of migratory birds. The obvious solution is to stabilize and restore the sea, but all of the methods that have so far been studied are expensive, with costs estimated at between $1 billion and $35 billion. Imperial farmers, whose activities created the sea and the ecological mess it has become, have grown increasingly nervous as details of those solutions have been made public. They grew even more nervous when the federal government indicated it did not consider restoring the sea a high priority and would be unlikely to pick up the tab. Two months before the January 1 deadline for the transfer deal, negotiators announced that they'd reached an agreement. But at the last minute, the IID board rejected the pact. The agreement's failure to immunize Imperial farmers from financial and legal responsibility for saving the Salton Sea was a major factor. At that point, the Department of Interior made good on its threat to cut California's allocation of Colorado River water. IID's board sued the federal agency � and was in turn sued by some of the district's own farmers � and won an injunction preventing the reduction from taking effect. Frantic negotiations ensued, spearheaded by the state, whose representatives in March cautiously announced yet another deal to settle the lawsuits and satisfy the federal government. This deal makes it clear that IID's goal had been to secure assurances it would not be left on the hook for an expensive ecological rescue effort. With backing from the governor, lawmakers have proposed allocating $200 million in Proposition 50 funds for Salton Sea restoration. IID also asked for $150 million in state loan guarantees to help it finance conservation measures. In an op-ed published in April in the Sacramento Bee, California Resources Secretary Mary Nichols defended the use of Proposition 50 funds for the project. Responding to a Bee editorial that criticized the plan for using state bond proceeds to grease a deal that will benefit Southern California farms and cities, Nichols emphasized the interconnectedness of the state's plumbing system. "Why is a subsidy for a water transfer that benefits the entire state � by maintaining our ability to purchase surplus supplies of water from the Colorado River � more distasteful than a subsidy for a fish screen that allows more pumping of water from the Delta?" Nichols wrote. It remains to be seen whether that logic will be embraced by lawmakers from regions that have more experience squabbling with each other over California's water supply than viewing it as a common resource. Contacts: Mary Nichols, California Resources Agency, (916) 653-5656. Imperial Irrigation District, (760) 482-9600. San Diego County Water Authority, (858) 522-6600.

If you have driven up Interstate 5 through the Grapevine from L.A. recently, you've undoubtedly noticed those 9,000 houses located on the west side of the freeway just as you drop down into the San Joaquin Valley. These are the houses built as the result of the San Emidio Ranch Specific Plan, a plan proposed by developer Dale Poe and approved by the Kern County Board of Supervisors more than a decade ago. At least you might have been looking for those houses if you had been recently flipping through the back issues of from the early '90s. But now that it's 2003, the reality is quite different. Dale Poe died in an auto accident. San Emidio Ranch went into bankruptcy. Eventually, almost 100,000 acres, including San Emidio Ranch, was purchased by the Wildlands Conservancy. It's now called "Wind Wolves Preserve." If you flipped a little bit more through our old issues, you'd find articles about big projects proposed throughout the state, including Otay Ranch near San Diego, Gold Rush City in Lathrop, Mountain House in San Joaquin County, and the infamous Ahmanson Ranch on the Los Angeles/Ventura County line. And you would be equally surprised about almost all of them. At 23,000 acres, Otay Ranch was the largest of these development proposals, and it is being built out more or less as planned in both San Diego County and the City of Chula Vista. After years of battles between San Joaquin and Alameda counties, Mountain House is moving forward, too. But Gold Rush City never went much of anywhere, and now it has been reborn as River Islands, an 11,000-home project that was approved early this year by the local City Council. And everybody knows what's up with Ahmanson Ranch, which is still mired in litigation 11 years after the Ventura County Board of Supervisors approved the project. California is a big state, and even today — when the coastal metropolitan areas are approaching the "post-sprawl" era — California is still a state characterized by big development projects. Not only are some of the projects above still in play, but the plans are moving forward for Newhall Ranch in L.A. County (21,000 housing units), Rancho Mission Viejo in Orange County (14,000 units), and Tejon Ranch's Centennial project in L.A. County (23,000 units). Tejon already has a separate, industrial project approved on 1,500 acres in Kern County. Sacramento developer Angelo Tsakapoulos has won approval for 10,000 units in the Sunridge development in Sacramento County. And in the eastern L.A. basin, the San Bernardino County Agricultural Preserve is being broken up, creating big new opportunities — especially for Lewis Homes, which has been purchasing chunks of dairy property. Planners in some parts of California — as in other fast-growing states with big landholdings, such as Nevada, Arizona, and Florida — are skilled at managing the planning and approval of very large development projects. In fact, there is a good case to be made that California planners are much better at doing specific plans than general plans, and that specific plans are the primary tool shaping the urban landscape of the state today. But her is another twist in California that makes our state different from others when it comes to large-scale development projects: The Big Buyout. Californians have so little taste for large-scale projects these days that simply proposing one usually mobilizes a group of opponents who not only want to kill the proposal but, in fact, want some government agency or land conservancy to buy the property. Indeed, this is how opposition to Ahmanson Ranch has evolved. Having gone about as far as they can go in attempting to bat the project's construction down, opponents are now focused on trying to dig up hundreds of millions of dollars -- presumably in public funds -- to acquire the property. All this focus on large-scale development is the result of California's still-strong pattern of land ownership in large blocks. Because of original Spanish land grants and the state's lackadaisical attitude toward land ownership patterns after statehood, most of undeveloped California is owned as large "ranches." And over the last half-century — from the creation of Irvine onward — California's urban expansion has been, in essence, the story of developing large ranches. That is why the Specific Plan has emerged as such an important planning tool — maybe important tool — in the remaining undeveloped parts of California. By focusing the efforts of a local government and a landowner jointly on developing a large amount of acreage, the specific plan allows a planning process at a more meaningful scale — one that contains a specific strategy for development, infrastructure finance, and open-space protection — than in the long-range and often vague general plans that cities and counties adopt. Also, there is little doubt that the specific plan is on a scale that citizens can understand. In a 2001 report released by the Reason Public Policy Institute, Solimar Research Group found that development projects tied to specific plans are more likely to win approval at the densities called for in the plans than are housing projects that are consistent with the general plan but which lack a specific plan. In a follow-up report scheduled for release on May 22, Solimar and Reason examined six case studies and found that planners, developers, and citizen opponents are often floundering when a general plan is applied to a development project, but that a specific plan provides a strong basis for review that is easier for everybody involved to grasp and buy into. For two reasons, the Big Buyout is also a result of California's historical pattern of large-scale development. First, large-scale development projects make a much more attractive target for environmentalists and other opponents of development. They are able to rally opposition around a big development project owned by a big landowner; while many small projects slide through the process. And second, large-scale ownership patterns make the Big Buyout easy to achieve. Saving the ranch is simply a matter of negotiating one price with one landowner. Other states may have more money to throw at open space -- Florida, for example -- but they don't always have the other pieces in place that make the Big Buyout possible. Hence the patchwork that is emerging from those projects that were approved a decade ago -- a Wind Wolves preserve here, a Mountain House there, and so on. The next generation of new suburban growth -- the Newhall Ranches and Rancho Mission Viejos, the River Islands and so forth -- will be shaped by the peculiar dynamic of the Big Specific Plan and the Big Buyout.

A 2002 appellate court decision that subjected a proposed water treatment plant to local zoning and building ordinances appears to be on shaky ground. The state Supreme Court had accepted for review the Sixth District Court of Appeal's ruling in (see , April 2002). However, in late March, the state Supreme Court transferred the case back to the Sixth District, directing the appellate panel to reconsider the case in light of legislation approved last year. That legislation, SB 1711 (Costa), was written in direct response to the Sixth District's ruling in . The Sixth District had declined to exempt a proposed water treatment plant from local land use ordinances because the exemption in the Government Code specified only "facilities for the production, generation, storage or transmission of water" — and did not specify the treatment of water. The decision came in a case in which a small group of residents was trying to block the Soquel Creek Water District from buying a parcel in their subdivision and building a water treatment plant. The ruling "has thrown existing understanding of the law into turmoil," according to a state Senate bill analysis. The state Supreme Court voted unanimously to send the case back to the Sixth District with directions to reconsider — a small step short of ordering the lower court to abandon its earlier decision. The case is , state Supreme Court No. S104952, Sixth District Court of Appeal No. H022122.

I admit that I had a knee-jerk reaction when I heard that the U.S. Navy planned to auction off the former Marine Corps base at El Toro this coming fall. Auction? It sounded as if military were colluding with big business to divvy up 4,700 acres of prime Orange County real estate that rightly belonged to the local community. The Pentagon traditionally has not sold its surplus real estate, but has given it to local governments for free in the form of "economic development conveyances." Now, in the case of El Toro, it looked as if the military were getting greedy. Well, so much for knee-jerk reactions. While it might be hard to convince some of my left-leaning brethren of the case, the forthcoming auction of El Toro will likely benefit the local community, the military and private business, in that order. The City of Irvine, not known to be a pushover on matters relating to the former Marine Corps base, seems just short of ecstatic about the arrangement. The auction is a test case for the military, which has never disposed of an entire base in this way before, although last year it did auction off three portions of the former Tustin Marine Corps Base, also in Orange County. El Toro has been the subject of perhaps the nastiest base reuse fight anywhere (see CP&DR , April 2002, November 1999, January 1997, July 1996, February 1995; CP&DR Legal Digest , April 2002, January 2002, July 2000). During the early 1990s recession, some Orange County business leaders and politicians decided that the county needed an international airport at El Toro. A number of regional transportation planners agreed. Surrounding cities, among the newest and most affluent in the county, of which Irvine was the largest, strongly opposed the idea. Orange County voters flip-flopped on the airport issue through four ballot measures, but the anti-airport faction ultimately prevailed. In the most recent initiative, voters in March 2002 designated a 1,500-acre "great park" at the heart of the former base, which will contain a university for 7,800 students, a 200-acre sports park, trails and other amenities. The remaining acreage will go toward 3,500 housing units, including a transit-oriented community, 1.6 million square feet of commercial space and 300,000 square feet of retail. In short, El Toro is an immense city-building project. The area is entirely within Irvine's sphere of influence, and the city is in the process of annexing the site. Orange County LAFCO is expected to decide the application this summer. The proposed auction divides the immense base into four sections, each of which includes a sizable chunk of the great park and open space. The former base has already been planned, zoned and entitled under a development agreement by the city — a factor that makes the land far more valuable to developers than unzoned land, because it is a "sure thing," that does not require years of negotiation with government for entitlements. But these entitlements are offset by the fact that there is essentially no infrastructure serving the site. Although Dan Jung, the city's director of strategic programs, would not predict the value of the base, he did cite sales figures of about $1 million per developable acre in the recent auctions at the Tustin base. If the winning bidders pay a similar amount for the developable land at El Toro, that translates to a cool $800 million. In addition, the city plans to charge the developers an additional $200 million in "development agreement" fees, which will go exclusively toward developing the public amenities of the great park. That money, together with an additional $153 million to be raised through assessment districts and special levies, will pay for both infrastructure and park development. The military, for its part, will have cash in hand to clean up the hazardous substances on the base. To understand the appeal of auctioning the land for the military, one must remember that the original purpose of the Base Realignment and Closure Act was to decrease costs by shedding redundant or surplus property. But the economic conveyance vehicle was not working in many cases for either local government or the Defense Department. Pentagon officials have complained that under the previous system of conveying land to local government, the military has ended up owning the bases for far longer than anticipated because local governments had to find developers interested in redeveloping the bases. Further, the military was not making much money on the deals. At a recent presentation, Wayne Arny, principal assistant secretary to the Navy, said he recently received a check for $51 million from the sale of one of the Tustin parcels. According to Arny, that sum doubled the total return the Navy had received from base closures since the program began in 1983. The auction process makes base reuse much more like a conventional real estate deal than before. Irvine controlled its destiny, so to speak, by doing a good deal of advance planning. The city identified the land uses it wanted, rezoned the area, and entitled it. As mentioned earlier, this provides certainty to developers, 22 of which have submitted statements of qualifications in anticipation of the auction. The same process of entitlements also provides certainty to the city, which knows exactly what should get built. At the same time, the city avoids the development business, where most cities do not belong. "We let all three parties play the role they do best," Jung said. "The Navy is the landowner, and in selling they provide an economic return to the taxpayer. The city does what it does best, which is regulate land use through its general plan. The developers do what they do best, which is develop property." Although it may seem common-sensical, real estate has no value unless it is capitalized, and the auction is one way to capitalize the immense value of El Toro and use the proceeds for public benefits. For some people, the idea of a conventional development process offering the most desirable planning outcome might seem hard to accept. When a city plans properly in the first place, however, the developer ceases to be an adversary and becomes an implementer of the public will. So if your knee continues to jerk, try a calcium pill. Better yet, take a long walk in the Meadow Park soon to materialize just east of the Irvine Spectrum.

A city may prohibit or regulate a boarding house with at least three tenants in a low-density residential zone, according to a state Attorney General's opinion. " reserving the residential character of a neighborhood is a legitimate government purpose that may be reasonably achieved by prohibiting commercial enterprises such as operating a boarding house business," Deputy Attorney General Anthony DaVigo wrote. The opinion came at the request of Lompoc City Attorney Sharon Stuart. Lompoc proposed an ordinance prohibiting in an R-1 zone a boarding or rooming house business, which was defined as a single-family home wherein at least three rooms were rented under separate oral or written agreements. An owner, agent or manager may or may not live on the site. In reaching his conclusion, DaVigo cited , (1980) 27 Cal.3d 123, in which the state Supreme Court held that a city may exclude a boarding house from a residential zone. This is because in zoning matters, the term "residential" is distinguishable from "commercial" or "business." Setting the threshold for regulation of boarding houses at three tenants is within the City Council's discretion, DaVigo found. He cited , 234 Cal.App.3d, 1579 (see , November 1991), which upheld a city's authority to regulate short-term rentals. "Line drawing is the essence of zoning," the Sixth District Court of Appeal ruled in . " he line must be drawn, and the legislature must do it. Absent an arbitrary or unreasonable delineation, it is not the prerogative of the courts to second-guess the legislative decision." Drawing the line at three tenants is not clearly arbitrary or unreasonable, DaVigo wrote. "It is ‘at least debatable' that prohibiting boarding house businesses operated for as few as three boarders in a low-density residential zone is a reasonable exercise of legislative powers," he wrote, citing the standard the U.S. Supreme Court used in , (1981) 449 U.S. 456. Furthermore, the ordinance would not deny property owners all commercial use of their property, as they could still rent to one or two tenants, DaVigo concluded. The Attorney General's opinion is No. 01-402 and was published March 19. It can be found at 03 C.D.O.S. 2502 and 2003 DJDAR 3101.

Contra Costa County and its 19 cities are considering a "growth management compact" for the next 20 to 30 years that emphasizes efficient development patterns, redevelopment and improved job distribution. The proposed compact — important components of which remain unsettled — is a key part of "Shaping Our Future," a multi-agency effort to address growth, conservation and transportation on a regional basis. The compact and the draft plan released in late March contain a number of "smart growth" principles. The compact and plan assume the county will continue to have an urban limit line, but determining exactly where the line will be and how often it can be adjusted are potential sticking points in the entire process. A "summit" of government leaders is scheduled for May 17, and that meeting could set the tone for the next phase of the project. Thus far, the atmosphere has been one of cooperation. All 19 cities, the county and the transportation authority have participated in the regional "visioning" process, which started in early 2002. But the groundwork for the process was prepared during the late 1990s, when a group of elected officials and city managers began talking about evidence that transportation authority plans for spending $1.5 billion would have little impact on congestion, said Don Blubaugh, Shaping Our Future project manager and a retired Walnut Creek city manager. The idea behind Shaping Our Future is to get all of the land use jurisdictions to consider the county as a whole when making development decisions. The project uses Envision Utah — a vaunted visioning effort in the Salt Lake City region — as a model. It took about a year to get every city to buy into the project, and even today just about everyone expects some cities to go their own ways in the end. "We know going in that there is nothing in California law that can make anyone do this," Blubaugh said. "It has to be a volunteer effort." "No one wants to give up their ability to make land use decisions," said Mike Oliver, Oakley City Manager and a member of the Shaping Our Future management committee. But those local land use decisions need to reflect shared regional interests, he said. The draft compact calls for cities and the county to amend their general plans to include the Shaping Our Future principles and implementation tools. That means the project is more advanced that many visioning processes that result in simply a collection of feel-good policies that no one is committed to using. "The project is oriented toward implementation more than other visioning projects have been" said John Fregonese, of Portland's Fregonese Calthorpe Associates, the project consultant who has also worked on the Envision Utah and other visioning efforts. Contra Costa County has the chance to go farther with its regional planning than other places, said Fregonese, because the county has a base on which to build: The urban limit line "is effective and it seems ingrained in the public's mind;" the transportation authority has used a growth policy in making funding decisions since the early 1990s; there is a history of cooperation at the subregional level; and several of the cities have undertaken downtown mixed-use redevelopment and transit-oriented development. With a population right at 1 million, Contra Costa County is very much a suburban county. In recent years, the county has provided about one-quarter of the Bay Area's new housing. But the county is not homogeneous. The Lamorinda area (Lafayette, Moraga and Orinda) in the hills west of Oakland, is an upscale, mostly residential subregion. Cities along Interstate 80 in the western end of the county, such as El Cerrito, Richmond and San Pablo, are largely working class towns with at least some industrial job base. In the middle of he county, Walnut Creek is home to many offices. The eastern county cities of Pittsburgh, Antioch, Brentwood and Oakley have seen rapid development of single-family housing for people who work elsewhere in the Bay Area. The cities of Danville and San Ramon are part of the silicon-tinged Tri-Valley region, the rest of which lies in Alameda County. Still, Shaping Our Future participants say that Contra Costa's cities have plenty in common — especially congested freeways and thoroughfares. The draft compact and plan have addressed the congestion by calling for increased housing densities, more multi-family housing near existing and proposed BART stations, and greatly increasing jobs in the east county. The preamble to the compact states, in part: "The process generates a future vision for Contra Costa County and its cities that focuses on more efficient use of land; encouraging good urban development in ‘centers' throughout the region; preserving the integrity of many existing neighborhoods; reducing traffic congestion in key areas; developing transit strategies and funding sources; improving dilapidated or underutilized business districts; and how and where to conserve valuable open spaces and hillsides." Government and community leaders have reached a general consensus on these concepts. Most Contra Costa County jurisdictions are already using, or at least moving toward, these concepts, Fregonese noted. Shaping Our Future leaders have tried to involve the public as much as possible. Workshops have drawn several hundred people each, and Blubaugh has made about 75 public presentations. Development interests have participated in the process, but they wonder how feasible the final plan will be. "I think there is general consensus about what needs to happen in the county," said Guy Bjerke, president and CEO of the San Ramon-based Home Building Association of Northern California. "Where things seem to break down is in the implementation details. Putting a bunch of jobs in the east county makes sense, but is the transportation system over the next 20 years going to be able to keep pace?" Developers also have serious concerns about the urban limit line. In fact, if any issue dooms the project, it could be the growth boundary. Over the strong objection of some cities, county supervisors contracted the line by 14,000 acres in 2000 (see , September 2000). The draft compact presents a number of potential approaches to determining the boundary, including reviewing the boundary as often as every five years. The draft plan says vacant and underutilized land within the existing urban limit line can provide 20 years worth of development — 30 years if the boundary takes in a closed Naval weapons station next to Concord. Fregonese Calthorpe has emphasized the need to remain flexible with the urban limit line, while environmentalists have vowed to fight any effort to expand the growth boundary. Bjerke contended the draft plan's projections are faulty. Much of the land identified as undeveloped or underutilized is in that state for good reason, Bjerke said. The project could also get derailed based on how city officials perceive the plan. Thus far, most grumbling has remained in the background. But some people would like to see more growth in Lamorinda, others question east county cities' commitment, and some elected officials question whether their constituents will accept the plan's high-density areas. A roll-out of the plan to the public in early April generated a mixed response. "We're not an island," said Orinda Mayor Pro Tem Joyce Hawkins. "We need to be part of the process and part of the solution. But at the same time, we need to defend our general plan." Orinda has some small areas that could be redeveloped with multi-family or senior housing, and downtown is ripe for some mixed-use redevelopment, said Hawkins, a member of the Shaping Our Future policy committee. But, she added, "We really are built out." Fregonese said no city is going to like every aspect of the plan. But he contends that just about everyone will accept — and help carry out — the plan's fundamentals: More redevelopment in working class cities on the west end, more jobs in the east county, and increased social equity throughout the county. At this point, project leaders hope to get jurisdictions with 80% of the population to sign the compact. That would be enough of a critical mass for the project to make a difference, and the other jurisdictions might come on board eventually, Blubaugh said. Contacts: Don Blubaugh, Shaping Our Future project manager, (925) 256-3585. John Fregonese, Fregonese Calthorpe Associates, (503) 228-3054. Mike Oliver, Oakley city manager, (925) 625-7025. Joyce Hawkins, Orinda mayor pro tem, (925) 253-4220. Guy Bjerke, Home Builders Association of Northern California, (925) 820-7626. Shaping Our Future website: www.shapingourfuture.org

A developer's lawsuit that claimed the San Diego Unified Port District and one of its commissioners conspired to kill the developer's proposed waterfront project has been thrown out as a strategic lawsuit against public participation (SLAPP). The Fourth District Court of Appeal upheld a trial court, which found that a Tuchscher Development Enterprises (TDE) lawsuit against the port district and Commissioner David Malcolm was a SLAPP. The unanimous three-judge appellate panel also affirmed the trial court's award of attorneys' fees to the Port District, and the appellate court awarded attorneys' fees for the appeal portion of the case. In 1998, Tuchscher entered into an exclusive negotiating agreement with the City of Chula Vista for development of bayfront property known as Crystal Bay. Tuchscher then obtained an option to purchase the land from the primary owner, Chula Vista Capital. However, the purchase option expired in February 2000, and the negotiating agreement expired three months later. Tuchscher then filed its lawsuit against the Port District, Malcolm, the city and developer Lennar Corporation. Tuchscher alleged the defendants induced breach of contract, interfered with Tuchscher's "prospective economic advantage" and violated the unfair competition law. The gist of the lawsuit was that the Port District and Malcolm conspired with Lennar to disrupt the city's negotiations with Tuchscher. The defendants argued that their actions fell within the anti-SLAPP statute (Code of Civil Procedure § 425.16) because their alleged oral and written statements regarding Crystal Bay were part of a governmental review of a development project, and because the issue was of public interest. The anti-SLAPP law is intended to block lawsuits that chill the exercise of free speech in matters of public interest. San Diego County Superior Court Judge William Nevitt Jr. ruled for the defendants and blocked the suit from going forward. Tuchscher appealed, arguing that the anti-SLAPP law did not apply because there was no "public issue" and because no formal public process had begun. And even if the anti-SLAPP law applied, Tuchscher contended that it had presented enough evidence for the lawsuit to go to trial. The anti-SLAPP statute requires the court to undertake a two-step process, the Fourth District explained. First, the defendant must show that the challenged action arose from protected activity. If the defendant makes that showing, the plaintiff must demonstrate a probability of prevailing at trial for the case to continue. Both the trial court and the Fourth District ruled that the defendants showed that their activities were protected under the anti-SLAPP law and that Tuchscher failed to make its case. The Fourth District ruled that "the prospect of commercial and residential development of a substantial parcel of bayfront property, with its potential environmental impacts, is plainly a matter of public interest." The court rejected Tuchscher's argument that if it there was a public issue, it did not involve the Port District and Malcolm and the argument that Tuchscher's motivation for the suit was not to chill free speech. The court called the arguments irrelevant. As for Tuchscher making its case, the Fourth District ruled that the developer provided little admissible evidence. A declaration by Tuchscher President and Chief Executive Officer William Tuchscher detailed the alleged behind-the-scenes activities of Malcolm, Port District officials, city officials and Lennar. And Tuchscher argued that these activities were intended to discourage further negotiations between the city and Tuchscher, and between the Crystal Bay landowner (CVC) and Tuchscher. These activities constituted a breach of contract and interference with Tuchscher's prospective economic gain, the developer argued. But the court called William Tuchscher's declaration hearsay, and "argumentative, speculative and impermissible opinions." " he record is absent of any admissible, direct evidence or evidence from which we may infer respondents' actions induced a breach or disruption," Justice Terry O'Rourke wrote for the court. Besides, O'Rourke continued, "such talks do not by themselves establish the city improperly negotiated with Malcolm or Lennar, abandoned the negotiating agreement, or otherwise refused to meet and confer or negotiate in good faith with TDE." Even if the Port District and Malcolm helped draft an agreement between CVC and Lennar, the activity would not necessarily be illegal, the court ruled. "Although the point is obvious, Malcolm, the Port District, Lennar and CVC were not parties to the negotiating agreement and thus they were not bound by any contractual obligation or duty to refrain from taking steps — either among themselves or with the city — to push their own development ideas for Crystal Bay," O'Rourke wrote. "Absent any contractual obligation to avoid discussing the issues with the city, respondents' conduct does not amount to a breach of contract or other independently wrongful act sufficient to support the plaintiffs' interference with economic advantage claim." The Fourth District further ruled that the trial court correctly ignored new evidence that Tuchscher presented when requesting reconsideration. The new evidence was that Malcolm and the Port District argued in an unrelated lawsuit that the district had jurisdiction only over tidelands, submerged lands in San Diego Bay, Lindbergh Field airport, and some limited annexations. If that were the case, the Port District and Malcolm would not have jurisdiction over the proposed Chula Vista development. Tuchscher argued that the doctrine of judicial estoppel prevented the Port District and Malcolm from having it both ways. The appellate court, though, ruled that the doctrine did not apply because the court in the other case rejected the description of limited jurisdiction and because the Port District and Malcolm gained nothing from that ruling. Plus, the court ruled, Tuchscher did not explain how the Port District's jurisdiction was relevant to its case. The Case: , No. D038811, 03 C.D.O.S. 2244, 2003 DJDAR 2827. Filed March 12, 2003. The Lawyers: For Tuchscher: Joel Pressman, Kolodny & Pressman, (858) 453-0309. For the Port District: David Noonan, Post, Kirby, Noonan & Sweat, (619) 231-8666.

A REPORT prepared by a group of New Urbanist planners for the Governor's Office of Planning and Research (OPR) recommends that cities and counties adopt form-based codes to govern development. The report knocks typical zoning codes, which are based on land uses. The authors contend this type of zoning has led to 50 years of suburban-style development, which has caused people to rebel against growth. "Just two generations ago, before sprawl fully took hold, when a green field was developed, a new neighborhood or town was gained," the report states. "Citizens then saw a fair transaction: A piece of nature traded for community, wealth and opportunity. But today, with only the suburban pattern available, citizens expect the farm field to become merely another housing subdivision, or a shopping center, or a business park rather than more of their town, and therefore as a net loss transaction." A form-based code places heavy emphasis on the design of streets and buildings — but not their uses. "The form-based code process … begins by defining the public spaces — the boulevards, the system of parks and greenways, the vistas to rivers, bays and nature preserves — and then within carefully measured neighborhoods lays out a network of streets and blocks that are scaled first to the pedestrian, then to the lots and buildings, and finally to the automobile," the report continues. "The automobile is accommodated, but at lower speeds — precisely what one wants in a neighborhood." To assist local governments, the authors recommend that ORP prepare at least one model form-based code. They also recommend that the state provide tax advantages and infrastructure funding to support compact, pedestrian-oriented and transit-oriented development. And they urge the state to commission a program-level environmental impact report so that "smart growth can be offered preferential permitting procedures, and can be found to be an environmentally superior alternative to sprawl under CEQA." The "White Paper on Smart Growth Policy in California" was prepared by planning consultants Robert Alminana, Paul Crawford and Laura Hall, architects Andres Duany and David Sargent, and Hercules Community Development Director Steve Lawton. ******* SAN BENITO COUNTY growth wars have heated up. In early April, the Board of Supervisors decided to adopt a growth control initiative rather than place the measure on the ballot. Landowners responded by starting a referendum drive to overturn the supervisors' decision. A rural county within long commuting distance of Silicon Valley, San Benito County has been the site of some bloody fights over housing developments during recent years. The county grew at a rapid percentage during the 1990s. Still, two-thirds of the county's 56,000 residents lives in the City of Hollister, according to the Department of Finance. The county has also seen real estate prices rise rapidly. The initiative sought to ensure that the Board of Supervisors could not back down from growth-control policies adopted since the late 1990s. (An initiative can be changed only by subsequent voter approval.) The initiative encompassed an existing policy that requires voter approval of upzoning to accommodate more than 100 units, and a two-year-old growth management ordinance that caps growth at 1% annually. Additionally, the initiative rezoned most agricultural land from five-acre minimum parcel sizes to 20-acre minimums. The initiative increased the minimum parcel size on rangeland from 40 acres to 160 acres. Initiative petitions presented to supervisors contained 5,600 signatures — more than four times the number of valid signatures needed for the initiative to qualify for the ballot. So supervisors adopted the initiative, which made landowners go on the offensive with the referendum. County Planning Director Rob Mendiola said the board's decision forces the county to go forward with a transfer of development credits program that the county was already designing. ******* THE CALIFORNIA COASTAL COMMISSION has approved a 313-unit housing development and 675,000-square-foot outlet mall on the Marblehead coastal plateau in San Clemente. Landowners have tried to develop the 250-acre site for 30 years. Previous proposals have ranged from 2,100 housing units to the Nixon presidential museum to a 60-acre shopping mall and houses. Those proposals all hit stiff opposition from San Clemente residents and environmentalists. Over the years, the size of the development proposal continually shrunk. Finally, the landowner and developer, the Lusk Company, revised the plan to its final shape. During the April Coastal Commission meeting, longtime opponents of earlier proposals lined up to support the development, and the Coastal Commission voted its unanimous approval. The approved plan designates about 105 acres for habitat and public open space with hiking trails. Buildings must be at least 250 feet from the edge of the bluffs and at least 100 feet from wetlands. Additionally, stormwater runoff from the site will be collected and piped to a wastewater treatment plant. ******* SAN MATEO COUNTY'S Midpeninsula Open Space District needs to improve its commitment to agriculture before expanding its boundaries to the county's coastal areas, the San Mateo County grand jury has concluded. One of the state's most aggressive open space districts, Midpeninsula proposes to grow by 140,000 acres, from the county's ridgeline to the coast. The expansion, which still needs Local Agency Formation Commission approval, would allow Midpeninsula to protect land along the coast and in the hills facing the ocean. Coastal farmers have opposed the planned expansion, fearing the agency would attempt to shut down some agricultural operations. The grand jury found that the agency lacks agricultural expertise and has not made preservation of farming a priority. Agency officials responded that planning behind the proposed expansion addresses the grand jury's concerns. "We're not interested in curtailing agricultural uses," district General Manager Craig Britton told . ******* THE ONGOING CORRUPTION SCANDAL in San Bernardino County continued to unfold during April. Former San Bernardino Councilmembers Valerie Pope-Ludlam and Edward Negrete were charged with taking bribes from a developer during the mid-1990s. Also charged were a grandson of Pope-Ludlam and Negrete's wife. The state Attorney General's office alleges Pope-Ludlam and her grandson accepted $50,000 from developer Allan Steward. Negrete and his wife allegedly received $10,000 in bribes from Steward. Prosecutors did not name the favors that Steward received for the payments. During the 1990s, Steward received a number of economic development loans and loan guarantees from the city. Two years ago, Steward pleaded guilty to separate federal charges that he bribed San Bernardino County and City of Colton officials. Also, Riverside businessman Gaylord Singletary pleaded guilty in April to bribing Colton City Councilman James Grimsby. Singletary paid the councilman $5,000 for his influence in getting a road built to Singletary's property, which he wanted to develop. Grimsby is scheduled to be sentenced in federal court this month after pleading guilty to accepting bribes from Steward. In a different case, Riverside County Superior Court Judge Patrick Magers ruled that there was enough evidence for corruption charges against San Bernardino County Supervisor Jerry Eaves and businessman William "Shep" McCook to proceed to trial. McCook is charged with bribing Eaves, former County Administrator James Hlawek and two Colton city councilmen to gain approval for the erection of billboards along Interstate 15. Eaves is charged with accepting the bribes, which in his case allegedly amounted to 10 free visits to a Las Vegas resort and $32,000 in campaign contributions. The other public officials allegedly accepted cash bribes. McCook and Eaves have pleaded not guilty. Federal prosecutors brought similar charges against Eaves, who remains in office through 2004 despite pleading guilty in 2001 to seven misdemeanors for not reporting gifts. However, a federal judge said the billboard case belonged in state court. ******* FORMER PITTSBURG City Councilman Frank Quesada pleaded no contest to three conflict-of-interest misdemeanors and was sentenced to 300 hours of community service in April. According to Contra Costa County prosecutors and a investigation, Quesada was in debt to the family of developer Albert Seeno Sr. by as much as $370,000. Yet Quesada voted to approve several Seeno projects before losing a re-election campaign in 2001. ******* NAPA COUNTY SUPERVISORS have approved a controversial Stream Setback Revision Ordinance, which prohibits construction of non-residential structures near rivers and streams. The new setbacks range from 25 feet for small drainages to 150 feet for larger creeks and rivers in hilly areas. Grapegrowers and other farmers opposed the new regulations, saying they will harm production and provide negligible benefits. Agricultural interests say they will pursue a referendum. Supporters, however, contend the rules will decrease flood danger, maintain water quality, and aid wildlife. The county has had a stream setback ordinance since 1991, but the new regulations increase the amount of land covered by setbacks from 23,000 acres to 53,700 acres, according to a county Conservation, Development and Planning Department staff report. About 11,700 of those acres are vineyards. After getting blasted by homeowners during public hearings, county officials decided to exempt residential construction from the setback regulations. County planners later determined that the exemption would mean the loss of less than 1 acre of proposed setback annually. ******* A LAWSUIT over an Alameda County growth-control initiative has been given a second life. In an unpublished decision issued in March, the First District Court of Appeal upheld Measure D, which established growth boundaries around cities and unincorporated communities in central and eastern Alameda County (see , December 2000, October 2000). But in April, the court accepted the request of two developers and property owner to rehear the case. The development interests had argued in their lawsuit that Measure D, a Sierra Club-backed initiative approved by voters approved in November 2000, was counter to state housing element law and violated the single-subject rule for an initiative. A trial court and the First District rejected those arguments. It is very rare for an appellate court to grant a request for a rehearing. Filing such requests is typically only an administrative step on the way to petitioning for review by the state Supreme Court. The plaintiffs expressed cautious optimism, while initiative backers said they hoped the rehearing would lead to a published opinion in their favor. ******* A TRANSPORTATION PLAN that is heavy on alternatives to the single-occupant vehicle has been adopted by the San Diego Association of Governments (SANDAG). The plan forecasts spending about $42 billion through 2030 on transportation projects. Rail transit, buses and transit stations will get 38% of the money under the plan, while carpool and bus lanes will get 18%. Streets and road will get 23% of the funding, and highways 19%. Among other things, the plan calls for additional carpool lanes on Interstates 5 and 15, construction of a long-planned rail line from Oceanside to Escondido, expansion of San Diego's trolley system, and completion of a freeway loop south of San Diego. ******* ALSO RECEIVING SANDAG board approval was the North County Multiple Habitat Conservation Program (MHCP). The plan designates 19,000 acres as habitat for 60 plant and animal species in northern San Diego County (see , February 2003). Seven cities in the area still need to adopt companion plans to carry out the MHCP. ******* STANISLAUS COUNTY is scheduled this month to begin seeking bids for construction of the proposed Gallo Arts Center in downtown Modesto. The Board of Supervisors has approved the design of the facility, which will provide two performing arts theaters, museum space, offices and meeting rooms. A private nonprofit organization, The Central Valley Center for the Arts, will provide about half the money for the $32 million arts center project, with the county providing the rest. The facility will replace two dilapidated buildings on I Street. ******* TULARE COUNTY SUPERVISORS have adopted the state's most rigorous dairy monitoring program. The program applies to any agricultural operation with at least 25 confined animals; the county's approximately 300 dairies are the primary target. Livestock farmers will have to file annual reports that address the handling of manure, runoff and wastewater, and other issues. The county may later amend the program to require groundwater monitoring. ******* THE INTERIOR DEPARTMENT decided not to appeal a Ninth U.S. Circuit Court of Appeals ruling on offshore oil drilling. The Ninth Circuit ruled that the California Coastal Commission has the authority to review proposed extensions of federal offshore oil drilling leases (see , January 2003). Interior Secretary Gail Norton announced that her agency would negotiate with the state regarding the oil drilling. ******* A LAW INTENDED TO BLOCK a proposed open pit gold mine in eastern Imperial County received Gov. Davis's signature in April. The urgency legislation, SB 22 (Sher), would require Glamis Gold Ltd. to fill in and restore the 850-foot-deep pit that the mine would create. Glamis said such reclamation would make the mine too expensive to open. The 1,500-acre mine is proposed for federal lands next to the Quechan Indian reservation. The tribe considers the site a sacred area and opposes the mine. Then-Interior Secretary Bruce Babbitt rejected the mine application during the Clinton administration's final days, but Interior Secretary Gail Norton reversed the decision in late 2001.

A developer's lawsuit alleging that the City of Wasco breached a development agreement by withdrawing funding for infrastructure is not subject to the statute of limitations in the Subdivision Map Act, the Fifth District Court of Appeal has ruled. The court ruled that the dispute was over an interpretation of the development agreement, which was not an action arising out of the Subdivision Map Act. The map act's 90-day statute of limitations provision (Government Code § 66499.37) has been in effect since 1975 "and no published decision has applied §66499.37 to a breach of contract claim," the court held. The ruling sent the lawsuit back to the trial court, which had earlier ruled for the city. The dispute involves the 480-acre Valley Rose Estates subdivision. In November 1992, Wasco and the Valley Rose Estates developer, The Legacy Group, entered into a development agreement. Two months later, they signed an acquisition agreement, in which the city agreed to pay up to $5.2 million for streets, storm drains and other public improvements constructed by Legacy. The city created an assessment district and began the process of issuing bonds for the infrastructure. The bonds were eventually issued after the developer sued. What spurred the suit was the Wasco City Council's decision in October 1994 to invoke the lien-to-value ration of 1:3 that was contained in the acquisition agreement. The city contended Legacy had not maintained the ratio, so the city ceased funding the project until the lien-to-value ratio returned to at least 1:3. Almost six months later, Legacy filed its lawsuit. The city argued that the Legacy lawsuit was too late because of the Subdivision Map Act's 90-day statute of limitations, and that two agreements precluded Legacy from recovering monetary damages. Kern County Superior Court Judge Jon Stuebbe accepted the city's arguments and ruled against the developer. The Legacy Group appealed, and in a partially published opinion, a unanimous three-judge panel of the Fifth District overturned Judge Stuebbe. The published portion of the decision addressed the statute of limitations issue, for which the court found no precedent. The city argued that the Subdivision Map Act's statute of limitations applied because the lawsuit challenged a City Council decision "concerning a subdivision." The Legacy Group contended that its lawsuit stemmed from the city's failure to meet contractual obligations and from misrepresentations by city officials — and those were outside the scope of the Subdivision Map Act. The appellate court found three bases for siding with the developer: A book, a state Supreme Court decision in a case indirectly on point, and the lack of any published decision supporting the city's argument. The book was the 2002 edition of by Kenneth Manaster and Daniel Selmi. They wrote, "Since a development agreement is a contract, presumably the normal contract statute of limitations will apply if either party wants to sue for breach of that contract." The state Supreme Court case was the takings case , (1994) 8 Cal.4th 1 (see , September 1994). In Hensler, the court ruled that a "decision to adopt, amend or modify a development agreement is not an ‘action involving a controversy over or arising out of the Subdivision Map Act,'" Justice Gene Gomes wrote for the Fifth District. "It then follows," Gomes continued, "that a decision concerning only the interpretation of a clause in a development agreement — a decision less significant than a decision to adopt a development agreement — also is not a decision ‘concerning a subdivision' for purposes of §66499.37." Finally, there was the lack of any published opinion extending the Subdivision Map Act's statute of limitations to a contractual dispute. The only part of Legacy's lawsuit subject to the 90-day statute of limitations was a claim concerning the city's failure to approve final maps, the court held. The unpublished portion of the opinion addressed the merits of the lawsuit, although the court did not dig deeply before remanding the case to the trial court. The Fifth District did overturn the lower court decision regarding the agreements' limitations on damages. The appellate panel ruled that the agreements were not as clear as the trial court had found them to be and that the limitation in the contracts may have only restricted the amount of damages to the amount of funds the city had available. The question of whether or not The Legacy Group maintained the 1:3 lien-to-value ratio was also remanded to the trial court, as was the developer's contention that the city was required to carry out the agreements. The Case: , No. F038382, 03 C.D.O.S. 2291, 2003 DJDAR 2911. Filed March 13, 2003. The Lawyers: For Legacy: Robert Scapa, California Lawyers Group, (818) 981-3712. For Wasco: N. Thomas McCartney, (661) 334-8011.

A federal appeals court has upheld a lower court's decision to remove a special master who had been appointed to oversee redevelopment of an industrial site in Union City. The Ninth U.S. Circuit Court of Appeals also upheld a court order capping the former special master's compensation and ordering him to repay $113,000. The decision was a victory for Union City, which had contended the former special master stymied the city's redevelopment efforts at the site. The case's history is so extensive that the Ninth Circuit compared it to , the convoluted case that bogs down for decades in the Court of Chancery in Charles Dickens's . In 1978, Pacific States Steel Corporation closed its plant in Union City, "leaving a parcel of contaminated land and a bankrupt medical plan for retired steelworkers and their dependents," according to Circuit Judge M. Margaret McKeown. The pensioners filed a class action lawsuit. Federal District Court Judge Marilyn Hall Patel decided the best approach was to clean up and redevelop the Pacific States Steel site and use the proceeds of development to fund the medical benefits. Judge Patel appointed a special master in 1984, but she replaced him because he failed to make much progress. In 1990, she appointed Palo Alto attorney Bruce Train, and his associates Theodore Sorensen and Hans Lemcke, as a new special master. In 1995, Train proposed, and Patel approved, a plan in which Train formed an administrative services company and a development company to handle the site development and raise money for the medical plan. Train also reached agreements with Union City's redevelopment agency for funding development of part of the site, where homes were eventually built. But over the next several years, the project seemed to go no further. The sticking point amongst all the parties involved was the amount of Train's compensation, according to the Ninth Circuit. Patel began to have misgivings, so she suspended Train and commenced an investigation. In December 2000, Judge Patel terminated Train as special master. She followed up that action in early 2001 with a lengthy order describing Train's transgressions: Rejecting valid redevelopment agency offers while holding out for more compensation for himself; misappropriating creditors' funds and Pacific States Steel funds; overbilling for a legal assistant; lying and disloyalty to the court; and generally failing to accomplish the assigned task. Patel capped the special master's compensation at $3.6 million (the three men had already received $1.2 million apiece, but they sought an additional total of $39 million) and she ordered Train personally to pay back $113,000 that he had overbilled or diverted for his personal use. Patel also ordered Train to pay $24,000 in attorneys' fees. Train appealed to the Ninth Circuit. A three-judge panel of the Ninth Circuit called the situation unusual because it amounted to an officer of the court appealing an order of the court. The Ninth Circuit held that Train had the right to appeal, but that he could not appeal Patel's orders because they did not qualify as a "final judgment." "Although the matter of Train's compensation has been resolved, development of the property under a different special master and the allocation of funds among the various parties will continue," Judge McKeown wrote. If Train wants to appeal, he will have to wait for final resolution of the case, the Ninth Circuit held. "We are aware that these proceedings are nearly 20 years old and may continue for some time. But according to Judge Patel's report, Train helped create this quagmire by failing to carry out his responsibilities. We also note that adherence to the procedural rules governing appeals does not leave Train wholly uncompensated in the interim, as Judge Patel's disgorgement orders still permit Train to keep more than $1 million." The Ninth Circuit also rejected Train's argument that Judge Patel should be removed from the case. The Ninth Circuit found the conduct of which Train complained — such as private consultation with real estate experts — was consistent with the judge's administrative role. " e believe that Judge Patel carefully balanced Train's interest in receiving due process with her responsibility for supervising the special master's efforts and, above all, seeing that the plant site is developed and the pension fund paid," the court ruled. The Case: , Nos. 01-16638 and 02-15110, 03 C.D.O.S. 1473. Filed February 20, 2003. The Lawyers: For Bruce Train, Hans Lemcke and Theodore Sorensen: Robert Goodin, (415) 392-7900. For Cordoza: Arthur Lazear, (510) 763-5700. For Union City: Charles Reese, (510) 835-9100. As amicus curiae for the district court: Tamar Pachter, (415) 642-1331.

The state Supreme Court will review a case involving the awarding of attorneys' fees in a CEQA lawsuit. The lawsuit involved a tie vote to certify an environmental impact report for a housing development in Orange County's Trabuco Canyon. With one member recusing himself, the Orange County Board of Supervisors voted 2-2 on the EIR. The county then proceeded on the grounds that the Planning Commission's certification of the EIR — which had been appealed to the Board of Supervisors — stood and no further review of the proposed project was necessary. But the Fourth District Court of Appeal ruled that an EIR can be certified only with an affirmative vote; thus, the 2-2 vote was the same as taking no action and the project could not proceed until an EIR was approved (see , January 2001). After the appellate court decision, an Orange County Superior Court awarded the project opponents $400,000 in attorneys fees. The Fourth District overturned the award of fees, ruling that the lawsuit only sought clarification. The lawsuit did not meet the standard for awarding attorneys fees in such cases by enforcing an important public right or furthering important public policies, the court held. Five state Supreme Court justices voted to review the case. The issue for review is narrow: What standard of review should an appellate court use in determining whether a lawsuit justified an award of attorneys' fees? The Fourth District applied a de novo standard, meaning the court provided a completely new review without deference to the lower court. The case is , No. S112816.