A dispute between owners of property in northern San Diego County and a public utility district is headed for a new trial after the Fourth District Court of Appeal overturned a $2.3 million award of damages and compensation to the property owners. A jury awarded the property owners $2.3 million for inverse condemnation and breach of contract by the Fallbrook Public Utilities District, and for the district’s later taking of the property via eminent domain. However, the Fourth District ruled that San Diego County Superior Court Judge Lisa Guy-Schall erroneously interpreted an easement agreement that gave the landowners access via the district’s property. The error was a factor in the judge’s ruling that actions of the district to deny use of the easement constituted inverse condemnation. Thus, the Fourth District ordered a new trial on all aspects of the case. At issue is land adjacent to Red Mountain Reservoir, near the town of Fallbrook. In 1977, two investors purchased 710 acres from movie director Frank Capra with the intent of developing estate homes. The following year, the Fallbrook Public Utilities District acquired 18 acres from the investors. Part of that deal included a 60-foot easement across the district’s property so the investors could access their land from Mission Road. After the investors died in a 1978 plane crash, the family of one of the investors ended up with the property. A few years later, the family agreed to sell 3 acres for a reservoir expansion project that obliterated the dirt road on the easement. In 1999, the property owners, calling themselves Red Mountain LLC, began working toward a 44-lot subdivision on a portion of their property. They notified the district they intended to use Red Mountain Dam Road for access to the proposed subdivision. The district refused to grant access because hundreds of cars would be traveling within a few feet of the reservoir. The district uses the 22-acre reservoir to store water purchased from the San Diego County Water Authority. The district only lightly treats the water before providing it to customers. In 2001, Red Mountain LLC filed a lawsuit alleging inverse condemnation and breach of contract. The district followed that with its own action to take 134 acres of Red Mountain’s property, which included some of the potential subdivision site, via eminent domain. The litigation was combined, and Judge Guy-Schall ruled that the 1978 agreement granted Red Mountain access on the dam road. But she also ruled that Red Mountain was bound by a 1949 “sanitary easement” intended to preserve the lake’s purity, a ruling that appeared to block any potential subdivision. In late 2003, the district offered $900,000 to settle all litigation. Red Mountain asked for twice as much, so the matter went to trial. Judge Guy-Schall made a finding of inverse condemnation and directed a jury to determine whether there were damages. The jury awarded $1.4 million for inverse condemnation and breach of contract, and nearly $900,000 as fair market value for the land the district directly condemned. The court also awarded Red Mountain all litigation expenses, which totaled nearly $450,000. The district appealed, and a unanimous three-judge appellate panel reversed the judgment. The case turned on the court’s interpretation of the 1978 access easement. The district argued that the trial court’s interpretation was wrong because Civil Code § 1069 required the court to interpret the easement in the district’s favor. The Fourth District agreed. Under § 1069, a grant is to be interpreted in favor of the grantee (here, Red Mountain), except when the grantor (here, the public utility district) is a public entity. If there is ambiguity, and the grantor is a public entity, then the grant is to be construed in favor of the government, according to the Fourth District. In this case, the district contended that the easement was granted only for personal ingress and egress, not to accommodate a housing development. “ hen a grant by a public body is ambiguous, the controlling rule is the provision in § 1069 that every grant by a public body is to be interpreted in favor of the grantor,” the court ruled, saying that the property owners’ contrary evidence was “irrelevant.” The Fourth District further reasoned that if the trial court had determined the easement access was limited to personal use, there was a “reasonable probability” that the court would not have ruled that refusal to grant the easement resulted in inverse condemnation. Thus, a new trial is in order. Because the inverse condemnation question must be reconsidered at a new trial, the issue of compensation for the direct condemnation must also be retried because the jury had established the fair market value based on “mitigation land with no access.” “If there was no inverse condemnation/breach of contract, Red Mountain would have had a contractual right to an access easement until Fallbrook directly condemned that right,” Justice Cynthia Aaron wrote for the court. “Under that scenario, a jury on retrial could find that the value of the property that was directly condemned was higher than the value the jury awarded for direct condemnation in the first trial.” The Fourth District declined to consider Fallbrook’s argument that the sanitary easement precluded any subdivision. The issue was rendered moot by Fallbrook’s direct condemnation of the land within the sanitary easement, the court ruled. The Fourth District did overrule the lower court’s award of litigation expenses to Red Mountain because a retrial could result in a different outcome. The Case: , No. D044546, 06 C.D.O.S. 9065, 2006 DJDAR 13023. Filed September 25, 2006. The Lawyers: For Red Mountain: Steven A. McKinley, Asaro, Keagy, Freeland & McKinley, (619) 297-3170. For Fallbrook PUD: Bruce Beach, Best, Best and Krieger, (619) 525-1300.

Of all the Election Day upsets in congressional races across the country, none was more surprising than the defeat of veteran Central Valley lawmaker Richard Pombo, who has represented California’s 11th District in the House of Representatives since 1992. The seven-term congressman, chair of the House Committee on Resources, was unseated by a candidate with virtually no political experience and little name recognition outside his immediate family. Despite representing a district where Republicans hold an edge over Democrats in voter registration, Pombo garnered only 47% of the vote on November 7, versus 53% for opponent Jerry McNerney, an engineer whose resume identifies him as a wind-energy consultant and novelist. “Pombo’s defeat sends a clear message to those who share his ideology that when it comes to the elections, the environment is now a giant-killer,” Sierra Club Director Carl Pope told the . Pombo’s loss, although celebrated with almost giddy enthusiasm by his critics, will no doubt lead to a marked change in congressional debate over national environmental and energy policy. But his successor as leader of the Resources Committee, which has tremendous influence over matters near and dear to the hearts of Californians, such as water, energy and public lands, won’t have to spend a lot of time trying to unravel Pombo’s legacy. That’s because there is not much of a legislative legacy to unravel. Despite tireless and occasionally hyperbolic efforts to revise some of the nation’s most far-reaching environmental statutes — mainly the Endangered Species Act (ESA) and the National Environmental Policy Act (NEPA) — Pombo has almost nothing concrete to show for his 14 years in Congress. Environmental advocates have long regarded him as Public Enemy No. 1, and can justifiably claim the lion’s share of credit or blame for his defeat last month. But their antipathy toward the former rancher had more to do with ideology than with his record of legislative achievement. And there was more to Pombo’s defeat than his hostility toward environmental regulations. Some political analysts have noted that Pombo’s district, once reliably Republican and conservative, has been changing as exurban refugees from liberal bastions in the Bay Area seek more affordable housing on the edge of the Central Valley. Hopeful Democrats have been predicting for several years that liberal commuters might finally spell defeat for a congressman wedded to the policy priorities of farmers, real estate investors and oil-patch workers. But of the forces that finally conspired to send Pombo packing, changing demography likely played the smallest role. The 11th District was created after the 1990 Census, when California gained seven House seats. The district originally included the southern and eastern parts of Sacramento County and nearly all of San Joaquin County, and Democrats led Republicans in voter registration 48% to 41%. The district was still Democratic, on paper at least, when Pombo first won election in 1992, and it remained that way through 2000, although the margin had narrowed by then to 45% Democratic and 43% Republican. Redistricting in 2002, however, shifted Sacramento County out of Pombo’s district and added inland portions of Alameda, Contra Costa and Santa Clara counties. And the balance of power flipped. Republicans led Democrats in voter registration that November 47% to 38%. That margin has since narrowed, and in fact it fell this year from 6.5% during the runup to the June primary to 5.6% for the November general election. Still, Pombo won re-election repeatedly, and by large majorities, even when he represented a Democrat-dominated district. Scandal probably played a more important role this year than demography. Pombo’s critics hammered relentlessly on his ties to convicted influence peddler Jack Abramoff, from whom Pombo accepted campaign contributions, as well as his reliance on campaign money from oil and gas companies that stood to benefit from the changes he promoted in federal energy policy. They also raised questions about money he directed from campaign funds to his wife and brother. Ultimately, however, it was Pombo’s environmental record that finally did him in. Probably not directly — his attitudes toward environmental policy have been consistent since he first went to Washington, and voters resoundingly re-elected him anyway — but because it finally drew the attention and money of big-name advocacy groups such as the Sierra Club and Defenders of Wildlife. Pombo’s signature issue has been revising the ESA to make it friendlier to business and property owners, a responsibility GOP leadership handed to him shortly after the party took control of Congress in 1994. His first 11 efforts were stymied either by a certain White House veto or opposition by moderate Republican colleagues. However, the stars finally seemed to align for him last year, thanks to strong support from the Bush administration and a larger Republican majority in Congress. In October 2005, the House approved Pombo’s 12th ESA rewrite on a vote of 229 to 193, sending it to a still-uncertain fate in the Senate (see , November 2005). Pombo also drew heat, but not much support, for proposals to sell off portions of the national park system to finance transportation projects, expand oil and gas drilling offshore and in the Arctic National Wildlife Refuge, allow mining companies to claim ownership of public lands, and revamp NEPA. Environmental groups have been battling Pombo’s legislative proposals for more than a decade, but the groundswell of anti-incumbent sentiment this year offered a chance to eliminate him altogether from the policy debate. Although Pombo raised and spent twice as much as his opponent — $3.8 million vs. $1.6 million as of the close of the October 18 reporting period — that margin was narrowed by environmental groups, which spent more than $1 million on McNerney’s behalf and mobilized volunteers to knock on thousands of doors in the district. Pombo’s defeat opens the door for Resources chairmanship to Rep. Nick Rahall of West Virginia, the committee’s ranking Democrat. Environmentalists may welcome any Democrat as an improvement over Pombo. But Rahall represents a coal-mining state, and he has pressed for federal investment in coal liquefaction and gasification technologies, which have the potential to boost greenhouse gas emissions and accelerate destructive mining practices. Federal Election Commission records show he’s received substantial campaign contributions from coal mining companies, coal-hauling railroads and the coal-burning electricity industry. Nevertheless, the League of Conservation Voters gave Rahall a 92 rating for his votes in the 109th Congress. Pombo scored a 3.

In November 1986, was born as a four-page “sample.” We haven’t missed a month since. Darned few publications survive for 20 years. To celebrate two decades — and to thank our loyal readers — we are publishing our most ambitious edition ever. In addition to our usual news stories, columns and updates, you’ll find reflective pieces by Publisher William Fulton and Associate Editor John Krist. Former longtime contributor Stephen Svete makes a return with a provocative column about new urbanism. Charter subscribers Marsha Rood and Peter Detwiler provide guest commentaries. Larry Sokoloff and I bring you up to date on a number of projects and controversies that has followed over the years. We also have collected some of our favorite stories from the past two decades. Included in this “greatest hits” section, which begins on Page 26, is our original coverage of the landmark Supreme Court decisions in and . See if you think we got it right. You will also find a 1995 Ken Jost piece about the lack of a firm legal definition for the taking of property rights. Ken, our Supreme Court correspondent, could have written essentially the same piece yesterday. We’ve also included two classic Morris Newman columns. I hope our friends in the fair City of Lancaster can forgive us. What you have in your hands, I think, is an excellent resource for anyone interested in California land use. Thanks for reading. We’ll see you again next month. - Paul Shigley

Several pieces of land use legislation have been vetoed by Gov. Arnold Schwarzenegger, including two bills aimed at affordable housing and a bill that would have decreased local discretion over the siting of emergency shelters and group homes. Meanwhile, state lawmakers and lobbyists are already starting to prepare housing bills for the 2007 legislative session. Detecting a philosophy in the governor’s vetoes is not easy, but it appears that bills that would have made the biggest changes to current law or practices were most likely to get the red pen. For example, bills that would have substantially expanded groundwater monitoring, amended the Mello-Roos finance law to fund affordable housing, or given Indian tribes larger planning roles received vetoes. Lawmakers are likely to reintroduce expansive bills that failed with the governor or their colleagues. Among the anticipated bills are measures that would mandate an increase in redevelopment agency spending on affordable housing, and one that would ease California Environmental Quality Act (CEQA) review of housing projects that comply with long-range plans. Among the vetoed housing bills was AB 2922 by Assemblyman Dave Jones (D-Sacramento), which would have permitted tenants to enforce affordability restrictions for housing units subsidized by redevelopment agencies. In his veto message, the governor said that he was “concerned that this bill will allow individuals without a direct interest in a housing project to bring suit against the property owner.” Jones expressed surprise at the veto and promised to try to work with the governor’s office next year. “The stated concern was not an issue we had been worried about,” Jones said. The problem, the assemblyman said, is that the affordability of a subsidized unit often gets lost when a unit is resold because a redevelopment agency has not recorded an affordability covenant or does not enforce other affordability restrictions. “We’re using state and local money to provide affordable housing, and tenants are losing that affordability,” Jones said. Originally, AB 2922 was a more ambitious measure that would have required redevelopment agencies to spend 50% of tax increment revenues on housing, up from the current 20% minimum. Redevelopment agencies opposed the bill, saying it would hinder revitalization efforts and slow the growth of property tax revenues that fund housing. But Jones said he plans to pursue a similar bill in 2007. “We have an affordability crisis, not a shopping center crisis,” Jones asserted. “It does seem reasonable to me to shift more of an agency’s resources to affordable housing, and away from commercial development.” Schwarzenegger did sign two of Jones’s other bills, AB 2511, which makes relatively minor changes to planning and zoning law with the intent of easing affordable housing development, and AB 1387, which expands a CEQA exemption for infill housing projects in urban areas. “I’m going to continue to look for ways to make infill easier and to incent infill development,” Jones said, noting that CEQA “has not been effective at stopping sprawl.” The former Sacramento city councilman also vowed to pursue additional curbs on local government authority over housing projects. “There are many applications of regulations at the local level that, either by design or inadvertently, impede affordable housing,” he said. Another proposal that appears certain to return in 2007 is a measure that would reduce or eliminate environmental review of housing projects that comply with long-term plans which themselves have been subjected to environmental review. That concept was embodied in SB 1800, a bill carried by Sen. Denise Ducheny (D-San Diego) and backed by both the California Building Industry Association (CBIA) and the Schwarzenegger camp. The bill emerged from a year-and-a-half of negotiations between the CBIA and the League of California Cities. When talks broke down, the CBIA went forward with a bill containing the provisions favored by builders. That caused local governments to join environmentalists in opposition to SB 1800, and the measure never escaped the Senate Transportation and Housing Committee. John Fleming, Ducheny’s chief of staff, said the intent of introducing SB 1800 was to open discussions among lawmakers, planners, environmentalists, local government officials and affordable housing advocates. He promised that Ducheny would introduce similar a bill during 2007. Under SB 1800, housing projects that complied with mandatory new “housing opportunity plans” would be exempt from environmental review. Environmentalists charged that the measure would “drive a truck” through CEQA, while local governments worried about an expensive new planning mandate and the loss of local control. Fleming conceded that bill proponents have not done a good job of explaining their intentions to opponents. “We’re not trying to truncate the process or streamline the process,” Fleming said. “We’re trying to front-load the CEQA process in the way that CEQA intended.” The key is ensuring that there is enough detail in environmental documents for long-range plans to ensure the documents are adequate when building permits are pulled, he said. “One thing everybody agrees on is that the system currently is not serving anyone’s needs,” Fleming said of the housing element update process. That process should ensure the designation of adequate land that is suitable for housing development, while also providing for open space, agriculture and environmental protection, he said. Marc Brown, who is stepping down as co-director of the California Housing Law Project, said that while the basic ideas of SB 1800 were sound, a more incremental approach might be warranted. “I think people can agree in concept on certainty for housing and certainty for environmental protection,” Brown said. “But when push comes to shove, neither side is willing to give up anything.” For his part, Schwarzenegger vetoed 262 of the 1,172 bills that lawmakers sent him during 2006, according to a report by the Senate Local Government Committee and the governor’s office. Other land use bills that received vetoes were: • AB 1020 (Hancock), which called on Caltrans and urban regional transportation agencies to prepare new transportation models that better account for land use policies. The governor said the bill was “well intentioned” but costly and unnecessary because his administration “is already moving forward with a comprehensive approach to integrating land use and transportation planning through the Strategic Growth Plan that I proposed earlier this year.” • AB 1962 (Berg), which would have allowed the Yurok Tribal Council to enter into a joint powers agreement with public agencies for the purpose of preserving and restoring the tribe’s natural resources, which include the embattled Klamath River. The governor called the legislation ambiguous. • AB 2158 (Evans), which would have required the fair-share housing needs allocation process to consider local agency formation commission growth policies. Schwarzenegger called the bill unnecessary. • AB 2762 (Levine), which would have permitted 16 Indian tribes to join the Southern California Association of Governments. Again, the governor called the bill poorly defined. • SB 1230 (Florez), which would have established a program for low-interest loans for economic development projects that would improve air quality in the San Joaquin Valley. The governor called the proposal “overly prescriptive.” • SB 1322 (Cedillo), which would have required cities and counties to make emergency shelters and group homes by-right uses in certain zones, and would have required local governments to account for shelters in general plans. In vetoing the bill, Schwarzenegger noted that he signed AB 2634 (Lieber), which requires local housing elements to provide for the needs of “extremely low-income” households that have only 30% of median income. • SB 1395 (Ducheny), which would have required local governments that find a project is exempt from CEQA review to notify Indian tribes who have an interest in the area of the project. Schwarzenegger called the bill an “unnecessary obligation.” • SB 1432 (Lowenthal), which would have permitted the use of Mello-Roos bonds to fund affordable housing development. Schwarzenegger said he disagreed with the premise of taxing homeowners for the purpose of building affordable units. • SB 1509 (Soto), which called on the Office of Planning and Research to develop a model mixed-use ordinance for voluntary use by cities and counties. The governor said local governments should write their own ordinances. • SB 1523 (Alarcon), which would have required economic impact reports for proposed big-box retail stores. The governor said the measure would “only limit the authority of local communities to decide what kind of retail projects they want to embrace.” • SB 1640 (Kuehl), which would have required state agencies to better monitor the use of both surface water and groundwater for supply-planning purposes. Schwarzenegger called the measure an “unfunded mandate on state and local agencies and overlying landowners.” • SB 1798 (Florez), which would have re-formed the state Reclamation Board, which oversees flooding and levee issues in the Central Valley, and required preparation of a state flood plan for the valley. The governor offered no reason for the veto.

Hundreds upon hundreds of real estate developments, planning efforts, economic development projects and related matters have received coverage in the pages of CP&DR during the past 20 years. We present here an update on some of the most important, and some of the weirder, stories from that period — while keeping in mind that most of these stories still have not ended. Bolsa Chica One of the longest running land use battles in Southern California — the fate of the Bolsa Chica wetlands in Huntington Beach — opened a new phase in August when ocean water flowed freely into the wetlands for the first time in 107 years. Hunters diked the marshland in 1899 to gain better access to the thousands of migratory birds that used the area as a feeding ground. Oil drilling followed after World War II. By the 1960s, the oil was beginning to run out, and developers set their sights on ambitious waterfront housing. In 1985, the Orange County Board of Supervisors approved a plan for 5,700 homes, a marina, shops and an oceanfront hotel. But litigation by the environmental group Amigos de Bolsa Chica succeeded in stopping those and subsequent development plans. Under an agreement worked out in 2002, most of the wetlands are now restored, and development of 349 homes is being allowed on 68 acres of a mesa above it. Grading work on the mesa has begun, said Alexia Swanepoel, executive director of Amigos de Bolsa Chica. The wetlands area is now owned by the state, which acquired 300 acres in 1973, and nearly 900 acres in 1997. The tidal inlet that opened during August allows ocean water to flow through a 360-foot-wide channel. The water flowed following an extensive, $147 million clean up and dredging of the property. More than half of the cost was borne by the ports of Los Angeles and Long Beach, which paid mitigation fees in order to expand their facilities. Many oil wells were removed, while others will remain until they are tapped out. Bolsa Chica was once considered one of the world's greatest natural habitats for wildlife and game birds. Bird life is again increasing, Swanepoel said, and future studies will track what could be an important environmental turnaround. Celebrity City The low rolling hills between Redding and Red Bluff vaguely resemble the Ozark Mountains. During the 1990s, dreamers thought they could make the area into a West Coast version of Branson, Missouri, the Ozark Mountain town that has grown into a thriving country music destination resort. The proposed Celebrity City project envisioned performance centers with tens of thousands of seats, 20,000 hotel rooms, thousands of housing units and extensive retail centers on approximately 3,200 acres just west of Interstate 5. Eager for economic development, supervisors in rural Tehama County approved general plan amendments and rezoning for the project in 1994. The promoters, however, never lined up funding. They later floated the idea of building a large racetrack on the property. That idea also fizzled. Then Del Webb arrived. The development company and Pulte Homes proposed to build one of Del Webb's well-known planned communities for senior citizens on the Celebrity City property. Sun City Tehama would have about 3,500 units for people at least 55 years of age, 250 non-age-restricted houses, a 44-acre commercial center and the usual Del Webb amenities, such as a golf course, community center and walking paths. Tehama County supervisors approved the Del Webb project in October. However, Caltrans has threatened to file a lawsuit, arguing that the county is not requiring Del Webb to pay its fair share for widening I-5 between Redding and Red Bluff to six lanes. Yerba Buena redevelopment A once forlorn section of San Francisco's downtown is one of the city's most visited and vibrant areas today. Yerba Buena Center, located just south of the city's Financial District, is an example of what redevelopment can do for a city — given enough time and investment dollars. Created shortly after World War II in an area of seedy hotels, the redevelopment project area is now San Francisco's premier museum district, and is home to the city's convention center, new hotels and office buildings. However, it took years of planning and litigation before redevelopment occurred. "It really is quite brilliant," said Jim Chappell, president of SPUR (San Francisco Planning and Urban Research Association), an urban planning advocacy organization. Redevelopment of the area has, he said, "totally changed that part of the city, and created a tremendous number of jobs." The newest piece of the Yerba Buena Center Redevelopment District is the expanded San Francisco Centre, which opened in September. It is home to the second largest Bloomingdale's in the nation, as well as other shops, office space and entertainment venues. San Francisco Centre, which was added to the redevelopment district in 1999, features a restored Emporium department store built after the 1906 earthquake. San Francisco Centre's expansion links the Union Square shopping and theatre district to the north with Yerba Buena's South of Market attractions. One of the biggest attractions in the redevelopment project area is Yerba Buena Gardens itself, a city park on a roof above the George Moscone Convention Center. Nearby are a children's entertainment area, restored buildings, the Metreon shopping and entertainment complex, and the San Francisco Museum of Modern Art. The Contemporary Jewish Museum recently broke ground in the area and upon completion will join the Museum of the African Diaspora, which opened in 2005. Fundraising continues on efforts to build a Mexican museum in the area. Sierra Nevada Forest Plan The Sierra Nevada Forest Plan Amendment, also known as "the framework" for management of federal lands in the mountain range, was developed by the Clinton administration and adopted in early 2001. The plan was in effect from 2001 until 2004, according to Earthjustice attorney Greg Loarie, who represents environmental groups challenging the current plan. The Bush Administration created its own plan upon taking office, and it went into effect in 2004. The Bush administration's Sierra Nevada plan is being challenged in federal court, where a ruling is still awaited. Environmentalists and Attorney General Bill Lockyer challenged the plan in February 2005, the latest volley in a long-running effort to come up with a management plan governing 11.5 million federal acres in the Sierra Nevada. The Clinton-era plan established a protected network of old forest areas to maintain suitable habitat for old-growth-dependent species, such as the California spotted owl. The plan put large trees off limits to logging, but provided for logging of 191 million board feet of timber in each of its first five years. The revised framework, released in January 2004 by the U.S. Forest Service, called for more than doubling the amount of timber being cut, to an estimated 450 million board feet a year. It eliminated protected old forest areas and allowed larger trees to be cut under the idea that the harvesting of big trees would prevent catastrophic wildfires. Legal arguments regarding the resort plan were heard in June by U.S. District Court Judge Morrison England, Jr. A broad coalition of environmental groups brought the challenge, according to Loarie. The court may hold additional hearings on that case, or hold additional hearings on other lawsuits brought over the plan, he said. Whatever the ruling, it is sure to be appealed because the stakes are so high, Loarie said. Mammoth Lakes redevelopment In 1997, the Town of Mammoth Lakes adopted a redevelopment plan for 1,100 acres, about one-quarter of the funky ski town on the eastern side of the Sierra. Redevelopment boosters expected the plan would help turn around the fortunes of the town, which struggled while business at Mammoth Mountain ski area declined. Local landowners, though, complained that redevelopment would primarily benefit Intrawest Corporation, a Canadian company that builds and operates upscale ski resorts. Intrawest had recently purchased a one-third interest in Mammoth Mountain and had acquired about 250 acres in town. Indeed, Intrawest soon proposed to develop more than 2,000 mostly upper-end housing units and a new town center. Meanwhile, though, local opponents were making history in court. In July 2000, the Third District Court of Appeal threw out the Mammoth Lakes redevelopment plan because it included non-blighted and undeveloped territory for which private development was already proposed. "The facts of this case exemplify the misuse of redevelopment power the Legislature sought to curb," Justice George Nicholson wrote at the time. The decision was the third in a string of four important cases (the others involved Murrieta, Diamond Bar and Upland) in which appellate courts narrowly interpreted 1993 redevelopment reforms. The Mammoth Lakes case has been cited numerous times in court and during legislative hearings, said attorney Murray Kane, of Kane Ballmer & Berkman, who won the case for the group Friends of Mammoth. "The courts are throwing the bad apples out. They have shown that the Legislature was serious when it tightened up the definition of blight," Kane said. Invalidation of the redevelopment plan, however, appears to have done little to slow development in Mammoth Lakes — which suggests that the opponents were correct, but that they are losing the larger battle anyway. In 2005, hotel mogul Barry Sternlicht purchased the ski resort with plans to take it upscale. "We have a lot going on here," said Community Development Director Mark Wardlaw, who arrived in town in 2005. "We're pretty much focused on our destination resort development." Two upscale condo-hotels are under construction, and there are proposals to expand the village core, develop a new lodge at the base of the ski mountain, build a condo-hotel and retail project elsewhere in town, and even to develop 25 acres of affordable housing. There's also a proposed master plan amendment to allow between 900 and 1,200 housing units of various types in the town's Snow Creek area. Meanwhile, a plan to expand the airport to accommodate large jetliners was grounded in 2003 when a federal court ruled the environmental review of the project was inadequate. Martis Valley Development plans for the Martis Valley, just north of Lake Tahoe, seemed to be in high gear during 2003 when the Placer County Board of Supervisors approved a community plan for the 25,000-acre area that called for 6,000 homes, ten to twelve golf courses and upwards of 1 million square feet of commercial space and hotels. But after environmental groups sued, settlements were reached that allowed smaller-scale development to occur in exchange for preservation of swaths of open space. Those settlements laid the groundwork for more conservation and development agreements and the apparent end of litigation. Under a settlement announced in March, the largest of the developments, Siller Ranch, was reduced to half its original size. Originally planned for 1,118 housing units with 45 holes of golf, Siller Ranch is now planned to have 653 units with an 18-hole golf course and 120 acres of open space. The settlement was reached between developers DMB/Highlands and the groups Mountain Area Preservation Foundation and Sierra Watch. "The discussions over Siller Ranch led to a broader collaborative agreement that takes significant steps towards securing a better blueprint for all of Martis Valley," said Tom Mooers, executive director of Sierra Watch. Mooers was especially pleased with a $72 million funding program created as part of the settlement that will be used to preserve open space and create worker housing in other parts of Martis Valley. The program, funded by a conveyance fee on property sold at Siller Ranch, will raise $18 million for habitat management, $18 million for workforce housing and $36 million for open space protection during the next 25 years. Under the same settlement, a proposed luxury development at the 280-acre Hopkins Ranch was turned into open space and housing for local workers. The settlement followed a 2005 decision by a Placer County judge who ruled that the Martis Valley community plan was illegal. That decision was appealed, but in September, environmentalists, developers and the county signed a settlement that ended the litigation. The plan adopted in 2003 will remain in place, but agreements with the individual developers have effectively cut the number of potential housing units in half and reduced other development opportunities. Among those other agreements are two regarding projects that are now under construction: 1,450 condominium units at the Northstar-At-Tahoe Ski Resort, and the 462-unit Eaglewood project located adjacent to Siller Ranch. At Eaglewood, 306 out of 475 acres were donated as open space, and 56 units there are being built as affordable housing. The various deals are expected to raise $100 million for land conservation, habitat restoration and affordable housing development over 25 years. Mooers estimated that 5,000 acres of Martis Valley land has received permanent protection through the agreements. Napa economic development Many California cities have reclaimed their downtowns and made them destinations for visitors and locals. At the close of the 20th Century, downtown Napa appeared poised for a renaissance. The key development planned in Napa was the American Center for Wine, Food and the Arts, also known as Copia. Several other developments also were proposed during an economic boom, designed to turn the mostly blue-collar community into a destination for some of the 5 million visitors a year to Napa Valley. A flood control project would open up the Napa River to the downtown, and visitors would find the following: a new waterfront retail market and spa, a restored 1879 opera house, and a convention center and hotel on the fairgrounds near downtown. Copia was predicted to draw 300,000 visitors a year when it opened in 2001. That was the vision, anyway. But by 2003, Copia was drawing only 150,000 visitors a year, at which point the center's programming was revamped to place a greater emphasis on wine tasting. Admission fees were reduced earlier this year from $12.50 a person to $5. The fairgrounds project never was built. Still, things have definitely changed in downtown Napa. New restaurants, wine tasting rooms, stores and day spas have opened. "We're starting to develop that visitor experience that you used to only get upvalley," said Jennifer LaLiberte, project coordinator for the Napa Community Redevelopment Agency. The restored opera house and a restored mill have been open several years, and they cater to locals and tourists. During the next 18 months, a pedestrian segment of the flood control project should be completed, as well as a mixed-use retail, residential and office project. Hotels are springing up: the River Terrace Inn opened during 2003 with 108 rooms; a 165-room Westin condo-hotel is due to break ground within walking distance of Copia this fall, and another 500 high-end hotel rooms are expected to be built downtown during the next several years. Near Copia, a 22,825-square-foot public market has been approved. With shops, food vendors and restaurants, the project will have the same developer and concept as San Francisco's Ferry Building. Newhall Ranch Plans for the massive Newhall Ranch development in the Santa Clarita Valley of Los Angeles County were first announced in 1994, and first approved by the Los Angeles County Board of Supervisors in 1999. But don't expect the first units — in the 1,400 home Landmark Village — to be built until 2008 or 2009. After the project's initial approval, the county faced lawsuits that challenged the adequacy of the water supply and raised questions about the project's effect on a federally endangered fish that lives in the nearby Santa Clara River. The project's developer, Newhall Land and Farming Company, was able to buy water from a variety of sources in the region, including private companies. The earlier lawsuits were resolved, and no lawsuits are currently pending, according to Newhall spokeswoman Marlee Lauffer. The specific plan for the project calls for nearly 21,000 homes, along with business parks and schools in the master-planned community west of Interstate 5. A total of 20,000 jobs are expected to be created in the community's commercial and business projects. Approximately 6,000 acres of the 12,000-acre Newhall Ranch property are to be dedicated as open space in both Los Angeles County and adjoining Ventura County. A joint powers authority was formed this year to preserve the open space, which will be dedicated over a 20-year span. But the open space preservation has not received universal kudos from environmentalists who fought the project. "This area is what they call ‘high country' and is really not buildable anyway," said Lynne Plambeck, of the group Santa Clarita Organization for Planning and the Environment. "The flood plain area is not preserved." San Emidio Ranch The Central Valley was the location of numerous "new town" proposals during the development boom of the late the 1980s. Many of those proposals faded away when the economy soured during the early 1990s, but one of the projects that received approval was also one of the biggest: The 94,000-acre, 25,000-unit San Emidio Ranch project at the valley's southern tip, near the Interstate 5 Grapevine. The Kern County Board of Supervisors approved the gigantic San Emidio Ranch project over the objections of environmentalists in 1992 during a period when Kern County lacked a planning commission. However, the project never got started. There were financial issues, and then developer Dale Poe died in a car crash. Ultimately, Poe's children kept a slice of the land while the Wildlands Conservancy acquired 97,000 acres of the 109,000-acre ranch. The conservancy, a private nonprofit organization, has established Wind Wolves Preserve on its portion of the property, which stretches from the valley floor high into the Tehachapi Mountains. The preserve provides wildlife and native plant habitat with minimal public access. Meanwhile, Kern County continues to receive periodic inquiries about the new town specific plan, said Ted James, the county planning director. "I know there have been efforts to buy that up," he said. However, the specific plan is 14 years old. It would need significant updating and a fresh environmental review, James said. The source of water for the new town project was always an issue and would likely be an even bigger issue nowadays, he added. Diablo Grande This master-planned resort and second-home development was in the news over the summer when a large wildfire burned nearby. But Diablo Grande, a development on 30,000 acres in western Stanislaus County, escaped unscathed because firebreaks held back the blaze. Originally proposed during the late 1980s, Diablo Grande has taken shape over the past twelve years west of Interstate 5. First, two golf courses that are considered among Northern California's best were built in the mid-1990s. A winery soon followed. First approved by the Stanislaus County Board of Supervisors in the fall of 1993, Diablo Grande development was slowed by lawsuits over endangered species and water. The project was the subject of the landmark 1996 decision Stanislaus Natural Heritage Project v. County of Stanislaus , 48 Cal.App.3d 182, in which the court ruled that analysis of a long-term water supply may not be postponed until after project approval. Eventually, a water supply for the former grazing lands was secured when the water district formed for Diablo Grande arranged a water transfer with the Kern County Water Agency, according to Curtis Creel, manger of water resources for the Kern County agency. As for rare species, a federal judge in 2004 ruled against environmentalists, who had contested federal permits related to rare species. Those permits allow construction of the project's first phase of 2,000 houses and commercial development while developers acquire and protect habitat on the property and nearby to protect the endangered California red-legged frog and San Joaquin kit fox. Currently, 12,000 acres are saved in permanent conservation areas. At this point, infrastructure for the new community still needs to be built, according to Kirk Ford, Stanislaus County deputy planning director. But, gradually, a community is taking shape in the foothills of the Diablo Range 20 miles south of Modesto, and eight miles from the city of Patterson. A total of 300 homes have been built since 2003, and another 1,700 homes have been approved on more than 2,000 acres. Also approved are a hotel and conference center, and a commercial center. For now, residents must drive to Patterson for food shopping and other needs. Diablo Grande's developers, which include Irish pharmaceutical magnate Donald Panoz and Wall Street investment banker J. Morton Davis, plan to build on a total of 8,000 acres, according to Dwain Sanders, vice president of development for Diablo Grande. They will need additional permission from Stanislaus County to build any more homes. Sanders said the company may ask for permission shortly to build on 1,200 acres. Mountain House Many new towns were proposed in San Joaquin County during the 1990s, but only one was actually built. That exception is Mountain House, located on the outer edge of the San Francisco Bay Area, near the border of Alameda and San Joaquin counties. Although originally approved in 1994, Mountain House construction did not commence until in 2001. The community's first school opened in 2004. Eventually, Mountain House is planned to generate 22,000 jobs and have a population of 44,000 living in 12 pedestrian-friendly neighborhoods. For now, Mountain House is a bedroom community of about 3,500 residents, with most homes occupied by Bay Area workers willing to make a long commute each day. There are only two small businesses in town, although more are planned soon. About 1,200 homes are currently inhabited. If there are not enough jobs by the time 2,000 homes are occupied, safeguards in the new town's master plan allow the San Joaquin County Board of Supervisors to slow residential growth. County Supervisor Leroy Ornellas, who represents the area, expects the Board of Supervisors to conduct a hearing on the area's job-housing imbalance. But Ornellas said he doesn't expect the Board to take any major action, such as halting housing construction. "I could not imagine we would take an ax to the project," Ornellas said. Additional jobs may arrive by the end of 2007, after Pegasus Development of Pleasanton builds the first phase of a commercial project, with 65,000 feet of office and 80,000 feet of retail space. The Pegasus project is eventually supposed to be a 1.7-million-square-foot business park. Another project, a satellite campus for San Joaquin Delta College, is also expected to add jobs when it opens during the next few years. Ornellas said the college project was hurt by rising construction costs. Mountain House is currently overseen by the county Board of Supervisors, but when the development contains 1,000 registered voters, they will have a chance to choose independent directors to run the community service district that provides municipal services there. Belmont Learning Center It is difficult to conceive of a more troubled public development project than the Belmont Learning Center, located in a rough neighborhood west of downtown Los Angeles. However, the problematic project may finally have a happy — albeit expensive — ending. A new high school could welcome students in less than two years. Belmont Learning Center was conceived during the late 1980s and early 1990s as a state-of-the-art facility that would decrease the burden on overcrowded Belmont High School. In 1996, the Los Angeles Unified School District (LAUSD) began construction on a unique project: A year-round school for 5,000 students, about 120 housing units, a retail center anchored by a grocery store, a community center and public recreation facilities. The project was estimated to cost at least $90 million. By early 1998, the district had eliminated nearly all of the non-school components of the complex project, and the first of what would be many investigations was under way, this one led by a state Assembly committee and focused on conflicts of interest for LAUSD vendors. The following year, LAUSD halted the project because of methane gas on the site, which had been an oil field decades earlier. Then the investigations really got rolling. An internal LAUSD investigation suggested criminal malfeasance. Steve Cooley defeated Los Angeles County District Attorney Gil Garcetti in a campaign centered largely on Garcetti's handling of a Belmont probe. (In 2003, Cooley announced that he would pursue no criminal charges in the Belmont scandal.) The mainstream and alternative press made Belmont a lead story for months. Meanwhile, LAUSD abandoned the project altogether — until Roy Romer took over as superintendent. He vowed to complete the school but was soon vexed by the discovery of an earthquake fault directly beneath some of the new buildings. In late 2004, the district tore down the new, never-occupied buildings on top of the earthquake fault. The demolition of the majority of new buildings on the Belmont site may have been painful, but it was part of an effort to actually complete the project. Now called Vista Hermosa, the new school is planned to house 2,600 high school students. Three existing buildings are being converted into a 2,100-student high school, and a separate 500-student academy is being developed for a total of 102 classrooms, according to LAUSD spokesperson Binti Harvey. The Santa Monica Mountains Conservancy is building a park that will include a soccer field and picnic area. Project development also includes installation of a methane collection system. Start to finish, LAUSD may end up spending $300 million on Vista Hermosa, which is on track for completion in the spring of 2008.

A water credit transfer approved for a developer by the City of Monterey and the Monterey Peninsula Water Management District has been struck down by an appellate court, which ruled that the city’s and the district’s reliance on an exemption from environmental review was faulty. State lawmakers created the district in 1977 because of ongoing water shortages in the Monterey area. The district serves eight jurisdictions, including the City of Monterey. In 1993, the district began a program in which water credits could be transferred from an existing commercial use to an expanding commercial use in the same jurisdiction. In 1995, the district changed the program to permit transfers from a commercial use to the jurisdiction’s water allocation. The program subjected water transfers to a 15% reduction, meaning that only 85% of water use capacity could be transferred. The district assumed this provision would result in a net decrease of water use. But studies by the district in 2000 and 2001 suggested the program caused an increase in actual water use, although it is unclear why this occurred. The district discontinued the program in 2002 but reinstated it the following year in response to a lawsuit. In 1994, an 11,000-square-foot commercial building complex on Foam Street in Monterey was demolished, and a water transfer credit of 0.789 acre-feet was approved. In 1999, Foursome Development received a five-year extension of the water credit. With the extension’s November 1, 2004, expiration date looming, Foursome sought to transfer the water credit to the city’s water allocation “to be held in reserve” for the developer. The city found the 2004 transfer to be categorically exempt from the California Environmental Quality Act and approved the proposal. Although environmental groups protested that the transfer would have environmental impacts and that the transfer violated the district’s own rules against “banking” credits, the water district board voted 4-2 to approve the transfer in October 2004. The environmentalists then went to court, losing a round in Monterey County Superior Court. A unanimous three-judge panel of the Sixth District Court of Appeal, however, ruled that the opponents were correct. The city — the “lead agency” for CEQA purposes here — found that the water credit transfer was exempt under CEQA Guidelines § 15032. The city relied on Class 2 within that section, which exempts “replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced.” “On its face,” the court ruled, “this exemption does not apply to a water credit transfer, which is neither a structure nor a facility.” Furthermore, the court ruled, all the city had as evidence of a replacement structure was a letter from Foursome that mentioned a possible addition to an existing office complex elsewhere or a new structure. No application had been filed. The city, water district and developer argued that the transfer of such a minor amount of water could not possibly have a significant environmental effect. But the court said the size of the project “is not an element of a Class 2 exemption.” The court then considered the actions of the water district, which was the “responsible agency” under CEQA. A responsible agency may rely on the lead agency’s environmental findings. However, because the court rejected the city’s categorical exemption, the water district no longer had substantial evidence for its finding that the water transfer would not have an adverse impact. The court also concluded that the district violated its own rule, which requires the board to consider the cumulative impacts of water credit transfers. Other properties also were facing the expiration of approved water credit transfers and might be the subject of proposals similar to Foursome’s, but neither the district’s staff nor the board considered that evidence, the court determined. The district and Foursome argued the transfer could not possibly have a cumulative impact because only 85% of water capacity could be transferred. In rejecting this argument, the court pointed to the district’s own studies, which determined “the water transfer program had not resulted in the anticipated savings … and, in some cases, may have resulted in an increase in water usage.” The Case: , No. H029242, 06 C.D.O.S. 6735, 2006 DJDR 9514. Filed June 23, 2006. Modified and ordered published July 21, 2006. The Lawyers: For Save Our Carmel River: Michael Stamp, (831) 373-1214. For the district: David Laredo, De Lay & Laredo, (831) 646-1502. For Foursome Development: Charles Olson, Sanger & Olson, (415) 693-9300.

Construction has begun on an eight-block project in central Ontario that city officials and developers say will be a cornerstone of downtown revitalization. Site work started in September for two developments that are planned to have a combined 547 housing units, 80,000 square feet of retail space and a 2 1/2-acre public plaza. The project lies within the Ontario Town Square, a 12-block planning area that already contains City Hall, a new main library building, a four-year-old senior center, and a new branch of the La Verne College of Law. “We’ve had 14 years of virtually unprecedented growth here,” said Ontario Development Director Otto Kroutil. However, nearly all of that growth has been in greenfield areas near Ontario International Airport and in the “New Model Colony” area that is replacing a giant dairy preserve. “Downtown is the center of the doughnut, and we need to fill the hole,” Kroutil said. The two projects getting under way are J.H. Snyder Company’s development of 171 for-sale lofts, 140 for-sale town houses and 160 rental apartments, along with 80,000 square feet of ground floor retail space. The other project is The Related Companies’ development of 76 apartments for low-income senior citizens. The projects are receiving “a very, very substantial public investment,” said Kroutil. Negotiations are not final, but it is likely Ontario’s redevelopment agency will put $13 million into development of the affordable housing units and split the cost of public improvements 50-50 with the developers, according to Kroutil. In addition, the redevelopment agency acquired the land from willing sellers and via eminent domain, assembled the parcels, cleared off some structures, and then sold the real estate to the developers at a discount. “We aren’t creating a downtown from scratch like so many young communities do,” said Ontario Mayor Paul Leon. “Instead, we’re reaching back to embrace the fabric of a century-old city, and focusing more on the creation of ‘sense of place’ rather than simply a retail destination.” Ontario’s rapid expansion qualifies the city as a “boomburb” — a city of at least 100,000 people that is not the largest in its metropolitan area and that has maintained double-digit growth in recent decades, according to Virginia Tech professor Robert Lang. Yet, Ontario was founded during the 1880s as the “Model Colony” and has a large, fairly well-defined downtown about a mile south of Interstate 10. Running through downtown is one of Southern California’s signature streets — Euclid Avenue, a 200-foot-wide right-of-way with a heavily landscaped median that, just north of downtown, is lined with grand old houses. However, with a few exceptions here and there, downtown has received no substantial private investment in decades. Some historic buildings have been lost or have fallen into disrepair. And while other cities in the area have successfully revitalized their downtowns, notably Claremont, Monrovia and, of course, Pasadena, Ontario has been slow to turn its attention downtown. The downtown in this San Bernardino County city of 170,000 people did not die entirely, but neither has the district been healthy for a long time. Now, city officials insist they are serious about pumping new life into the city’s historic core. The Snyder and Related projects are the largest projects in downtown Ontario probably since World War II. Covering about one-sixth of the large downtown, the new projects fill eight blocks along and east of Euclid Avenue. The project includes the conversion of one square block on Euclid into a new public park. Much of the Snyder component is in mixed-use form, with up to three floors of lofts or apartments above ground-floor retail space that abuts wide sidewalks. Parking will be in structures and underground. The large size of the Snyder and Related projects is key, according to project supporters. “You need to have enough of a critical mass to make a difference,” said Kroutil, “so that the new urban form truly has an impact.” Jerry Snyder, senior partner at J.H. Snyder, agreed. “I think it’s important that we redevelop the whole eight blocks all at once so we aren’t building town homes in the middle of nothing,” Snyder said. The new housing will help create a neighborhood where none really exists now, he said. City officials hope the Snyder and Related projects, scheduled for completion in 2009, will serve as a catalyst for additional investment downtown. The idea is that residents who fill the new housing units will create a market for the new retail shops and restaurants, which will generate more development interest. Snyder’s company has done redevelopment projects for decades, including such high-profile Los Angeles projects as Museum Square on the Miracle Mile, near Los Angeles County Museum of Art. He sees Ontario as ripe for redevelopment and said his planned mix of housing units and retail space will fill a market need. “I’ve got more people wanting to lease the retail than I’ve got retail. I’ve got drugstores, I’ve got restaurants. The retail people are very confident,” said Snyder, who is eager to begin development this fall. While a number of cities have copied at least part of Old Pasadena’s model for downtown revitalization, there is no guarantee of downtown success in Ontario, said Richard Willson, chair of the Department of Urban and Regional Planning at Cal Poly Pomona. “Cities that are late to the party are going to have to differentiate themselves,” Willson said. Ideally, he said, downtown Ontario will have a theme, whether it be architectural, cultural or something else, that sets the district apart from other cities and from places like Victoria Gardens, an “instant downtown” in nearby Rancho Cucamonga. Willson endorsed Ontario’s move to bring large numbers of new residents to downtown, because those residents can help a district weather retail trends that may cause an area to lose favor with visitors. Kroutil said the city wants to build on its historic assets, while also completing a downtown that, although old, was never really finished. The Snyder and Related projects will bring structures as tall as 60 feet right to the sidewalk, while also providing wide sidewalks and new public spaces. “Although the infrastructure, and the city blocks and the mature trees are in place, downtown Ontario never achieved a level of urbanity. There is still a lot of room,” Kroutil said. Contacts: Otto Kroutil, City of Ontario, (909) 395-2024. Jerry Snyder, J.H. Snyder Company, (323) 857-5546. Richard Willson, Cal Poly Pomona Department of Urban and Regional Planning, (909) 869-2701.

Looking back at the environmental issues that grabbed headlines 20 years ago, it’s tempting to conclude that nothing at all has changed. Here’s a sampling of the environmental topics covered in the first few issues of : threats to Lake Tahoe’s fabled clarity from development and pollution; dissatisfaction over the Coastal Commission’s regulation of land use in seaside communities; suggestions that developers should be required to mitigate the air-quality impact of their car-dependent malls and housing tracts; alarm over plans to bury flood-prone land in the Central Valley under suburban sprawl. Despite the superficial similarity of the controversies then and now, the past two decades have actually seen a significant shift in the debate over the fate of California’s environment. One of the most significant changes has been geographic in origin. During the 1980s, population pressures were focused on the state’s urban coastal counties. But the focus of California’s growth has shifted in the past 10 years, migrating into the high desert of Southern California, the Central Valley — particularly those pockets within commuting distance of the San Francisco Bay Area — and the Sierra Nevada foothills. Between 1986 and 2006, California’s population grew by 39%, as the state added 10.4 million residents. County growth rates were near or below the statewide level in the traditionally populous urban coastal counties. In the Central Valley, however, rates were higher than the state as a whole, ranging from 48% over 20 years in Tulare County to 92% in Madera. In the foothills, it was higher still: Placer County grew by a whopping 124%, Amador by 70%, El Dorado by 75%, Calaveras by 89%. But it was the Inland Empire that saw the most dramatic population influx: San Bernardino County has added about 900,000 residents since the first issue of this newsletter was published, growing by 82%. And Riverside County has more than doubled its population, adding about 1.1 million people. With these geographic shifts in population have come increasing conflicts over inland air quality, as the Central Valley’s smog, soot and dust have pushed it ahead of perennial pollution powerhouse Los Angeles for the dubious title of most unhealthy air in California. That’s led to crackdowns on nontraditional regulatory targets, such as farm and construction equipment — a dramatic shift from the focus on Los Angeles auto traffic that was the subject of a story in one of the first issues of (see “Clean Air Act Legislation May Affect Development,” August 1987). It has also pushed the Central Valley into novel regulatory terrain, as the region attempts to reshape its urban fabric to reduce smog-causing emissions from automobiles. New conflicts related to endangered species and habitat loss have accompanied the rapid expansion of urban development in the state’s interior. Desert-dwelling species such as tortoises and lizards have joined the roster of high-profile critters in peril, as have vernal pool plant species on once-remote rangeland and even creatures once thought to be relatively safe from potential extinction because they were so widespread, such as the red-legged frog. Accompanying the growing list of imperiled California species has been a fundamental shift in the way such creatures are protected. Species-by-species recovery plans have been supplanted by comprehensive agreements that attempt to balance development and other habitat-wrecking activities with landscape-level conservation of entire ecosystems and multiple species. The foundation of this balancing act is the habitat conservation plan (HCP), an idea born in California and subsequently exported nationwide, through which landowners promise to preserve and manage sufficient habitat to protect sensitive species in exchange for regulators’ permission to destroy other habitat. The first such plan was negotiated during the early 1980s to protect a Bay Area butterfly, and it established the template for most of the HCPs that followed. Despite persistent criticism, the HCP process has become enormously popular. It was formally written into federal law in 1982 as an amendment to the Endangered Species Act. When began publishing, only two HCPs had been negotiated in California. Now, there are more than 100 species plans in effect in California — more than a fifth of all the HCPs nationwide. California not only has more of these agreements than any other state, it also has the largest one ever negotiated, an ambitious plan encompassing a tenth of the state and covering more than 100 sensitive species in the Mojave Desert (see , May 2005). Like the growing importance of HCPs, which reflect a significant retooling of a landmark Nixon-era law, another far-reaching shift in environmental regulation over the past 20 years in California has involved revision of a statute dating from the 1970s. The regulations are known as total maximum daily loads, or TMDLs. They are a way of addressing water pollution from “nonpoint sources” — the diffuse runoff from agricultural fields and urban storm drains that, unlike emissions from factories and sewage treatment plants, lacks an identifiable discharge point where pollution controls can be installed and monitored with relative ease. Although authorized under section 303 of the Clean Water Act of 1972, TMDLs and nonpoint pollution were largely ignored by state and federal regulatory agencies until relatively recently. The EPA did not even adopt implementing regulations for them until 1985, refining those standards further in 1992. And it has only been within the past decade that enforcement has begun, largely a consequence of a barrage of lawsuits by environmental organizations seeking to force the EPA and the states to adopt TMDLs for impaired streams and lakes (see , February 2005). The consequence will be to spread the pain of Clean Water Act compliance from factories and coastal sewer plants — the primary targets during the 1970s and 1980s — to everyone else. That’s something Californians probably should get used to. As the past 20 years have demonstrated, the state’s enormous population growth has meant intensifying pressures on ecosystems and natural resources, even those once considered safe because they were either too abundant or too remote to be troubled by human activity. Those pressures in turn have translated into a heavier and more broadly shared regulatory burden, as laws drafted a generation ago have been updated to reflect new concerns about the state’s air, water and wildlife. As there is no evidence to suggest California’s population will stop growing or spreading anytime soon, the 40th anniversary edition of will probably carry a story very much like this one.

One of the largest takings awards in California history has been thrown out by a state appellate court, which ruled that preliminary airport planning and traffic circulation changes by the City of San Diego did not amount to a taking of a developer's property. In 2001, a jury awarded the developer of a business park just north of the Mexico border $94.5 million for inverse condemnation and for the city's violation of a 1986 development agreement. A judge ordered a new trial on the development agreement contentions, but the award of $65.3 million — plus $26.4 million in pre-judgment interest — to developer Roque de la Fuente II for inverse condemnation stood. By the time of the Fourth District's decision, interest had boosted the award to more than $120 million. The jury awarded damages after San Diego County Superior Court Judge Vincent DiFiglia accepted de la Fuente's argument that planning for an international airport in the area of the business park, and the diversion of truck traffic to a new border crossing amounted to a taking of private property because they impacted development of the business park. However, the Fourth District Court of Appeal ruled that because airport planning did not affect de la Fuente more than any other property owner, there was no taking. The court also found that, although truck traffic was thick for a period, there was always road access to the park and, therefore, there was no taking. The Fourth District also upheld Orange County Superior Court Judge Raymond Ikola's decision granting the city a new trial on the alleged breach of a development agreement. Vincent Bartolotta Jr., de la Fuente's attorney, said he would ask the state Supreme Court to take the case. The Fourth District's decision "undermines the viability of inverse condemnation in California," he said. The de la Fuente family and local government officials have battled for years over real estate development in the Otay Mesa section of San Diego, where Roque de la Fuente Sr., his wife and children have owned thousands of acres. (The senior de la Fuente died in 2002. His son, Roque II, runs the family development company.) In 1986, one year after the city annexed the territory, the city entered into a development agreement with the family's 260-acre Border Business Park, Inc. Under the agreement, the developer agreed to pay certain fees and bear the cost of various public improvements. In exchange, the city agreed not to hold the developer to certain fee and regulation revisions. The city also agreed to finance improvements with municipal bonds that the developer would pay off. However, there had been talk by the city and the San Diego Association of Governments (SANDAG) of converting the small Brown Field airport at Otay Mesa into an international airport since at least 1981. In 1989, SANDAG identified Otay Mesa and Miramar Marine Corps Air Station as potential new airport sites, and in 1991 the city named Otay Mesa the preferred option. The city's plan called for a "twin port" that used both Brown Field north of the border and Rodriquez Field in Tijuana. In 1993, however, the city abandoned the plan because Mexico was not interested. That same year, the federal government closed the San Ysidro border crossing to commercial truck traffic. Instead, trucks had to use a new border crossing in Otay Mesa. At first, truck traffic bypassed the business park. But two years later, the city re-routed traffic for about nine months in a way that inundated the business park with border-crossing trucks. Meanwhile, development at the business park had slowed, and de la Fuente missed some bond debt payments. The city foreclosed on 35 parcels, although de le Fuente eventually regained most of the property. De la Fuente sued the city in 1995, alleging the city had breached the development agreement, and in 1998 amended the lawsuit to allege that the city's actions amounted to inverse condemnation (a taking of private property). Judge DiFiglia ruled for the developer, sending the damages portion of the case to a jury, which ordered the city to pay the developer $65.3 million in January 2001. The jury awarded an additional $29.2 million for breach of contract. The decision stunned the city. Although inverse condemnation lawsuits by developers and landowners are not uncommon, actual awards of damages are rare in California. Moreover, in this case, the damages stemmed from the apparently routine government activities of long-term airport planning and a traffic re-routing. At the time, the San Diego Union-Tribune said, "If DiFiglia's interpretation stands, governments everywhere will be liable every time they do anything that affects private property. Good luck building a new airport, highway or any public project of any sort." The city got the case moved to Orange County, where Judge Ikola accepted the city's request for a new trial on the breach of contract claim. Still, he upheld the inverse condemnation decision. Both sides appealed, and a unanimous three-judge panel of the Fourth District, Division Two, ruled squarely for the city. Regarding airport planning, de la Fuente argued that the city acted unreasonably because it failed to ascertain Mexico's interest in the twin port plan or the sharing of airspace. The assertion was based on Klopping v. City of Whittier , (1972) 8 Cal.3d 39, in which the state Supreme Court ruled that "when the condemner acts unreasonably in issuing pre-condemnation statements, either by excessively delaying eminent domain action or by other oppressive conduct, our constitutional concern over property rights requires that the owner be compensated." The Fourth District ruled that de la Fuente was not eligible for a Klopping claim because the developer "failed to adduce any evidence that the city's announcements concerning the proposed Otay Mesa airport subjected it to direct and special injury." "If the plaintiff's situation is ‘no different than that of any other landowner' in the area to be affected by the proposed plan, Klopping does not apply," Justice Art McKinster wrote for the court, citing Selby Realty Co. v. City of San Buenaventura , (1973) 10 Cal.3rd 110, 120). The city's airport proposal affected 4,000 to 6,000 acres, so de la Fuente's inverse condemnation claim "fails as a matter of law," the court concluded. Truck traffic became an issue during 1995, when the city re-routed truck traffic while it improved the primary thoroughfare for about nine months. Truck traffic was sent through the business park, and backups lasted for hours. Some truck traffic diminished after the city finished work on the arterial, and the problem was largely solved by about the time of the trial court's ruling when the city completed a permanent, new truck route to the border. De la Fuente argued that there was "total gridlock" around and through the business park, denying him the right of access. But the Fourth District rejected the claim, finding that there was always some access, even during the critical period of 1995. "At most, the traffic backups required tenants of the park to use an entrance which was less convenient. Interference with access which merely requires greater ‘circuity of travel' is not compensable," McKinster wrote. Bartolotta contended that the court ignored evidence that trucks lined up bumper-to-bumper for hours on end, forcing tenants to drive off-road to reach their businesses. "This was so far beyond the pale of normality, it boggles the mind of anyone with common sense," he said. The developer's attorney also said the fact that airport planning affected multiple property owners should not impact an inverse condemnation claim. "How can that be the law?" he asked. As for a new trial on the alleged development agreement breach, the Fourth District ruled that claims for damages prior to June 23, 1994, were time-barred because of a decision in a different case involving de la Fuente and the city. The court upheld Judge Ikola's decision ordering a new trial on both liability and damages which occurred after that date. Bartolotta said he may ask the state Supreme Court to review the development agreement part of the case, too, but he welcomed a new trial. "Our damages are even bigger than they were before," he said. In a written statement, City Attorney Michael Aguirre said the ruling saved taxpayers more than $150 million. "The City of San Diego has no money for Roque de la Fuente," he said. However, one year ago the city revealed it had offered de la Fuente $50 million to drop the lawsuit and two similar suits he has filed against the city. But two years of negotiations and interventions by three judges produced no settlement. The Case: Border Business Park, Inc. v. City of San Diego , No. E035881, 06 C.D.O.S. 8909, 2006 DJDAR 12713. Filed September 19, 2006. The Lawyers: For Border Business Park: Vincent Bartolotta Jr., Thorsnes, Bartolotta & McGuire, (619) 236-9363. For the city: Kristine Wilkes, Latham & Watkins, (619) 236-1234.

A federal court has ordered Sutter County to grant a conditional use permit for a Sikh temple. The Ninth U.S. Circuit Court of Appeals found that the county violated the federal Religious Land Use and Institutionalized Persons Act (RLUIPA) when the county rejected two use permit applications for the temple. The Ninth Circuit concluded that the county had imposed a “substantial burden” on the exercise of religion without providing a compelling reason. The decision had been closely watched, as the case generated amicus briefs by the Department of Justice, The Anti-Defamation League, the Becket Fund for Religious Liberty, and California local government associations. “The decision shows that a public agency’s failure to prove a compelling interest when denying land use permits to a religious group may lead to both a judicial reversal and a court order affirmatively approving the project,” Bingham McCutchen attorneys Daniel Curtin, Cecily Talbert and Joshua Safran wrote in the . In late September, in response to the court ruling, Sutter County granted the conditional use permit. The court also very specifically upheld the constitutionality of RLUIPA, finding that the law is a permissible exercise of Congress’s remedial power under the 14th Amendment. In an unpublished opinion, a different three-judge panel of the Ninth Circuit reached a similar conclusion in an unrelated case, , No. 04-5532 (August 22, 2006). Unlike RLUIPA’s predecessor, the Religious Freedom and Restoration Act, which the Supreme Court struck down in 1997, RLUIPA generally has been faring well in court, although courts have deferred to regulators that provide a compelling government interest. The Sutter County case involved an application from Guru Nanak Sikh Society of Yuba City. In 2001, Guru Nanak had sought a conditional use permit (CUP) to build a 5,000-square-foot temple on a 1.89-acre parcel zoned for low-density residential use. The county allows temples and churches in such zones with conditional use permits, and the county Planning Division recommended approval. However, the Planning Commission voted unanimously to deny the use permit because of citizens’ fears about noise and traffic. So Guru Nanak acquired a different property, a 28-acre parcel zoned for general agriculture. The land contained a walnut orchard and 2,300-square-foot house, which Guru Nanak proposed to expand by 500 square feet for use as a temple. Guru Nanak submitted a new use permit application, and, again, the Planning Division recommended approval based on a number of conditions, such as limiting the number of people at religious services to 75 at a time. Guru Nanak accepted the conditions, and the Planning Commission voted 4-3 to approve the project. However, neighboring landowners appealed, and the Board of Supervisors voted 4-0 to overturn the Planning Commission. Supervisors said the project conflicted with agriculture uses, was too far away from the city and amounted to leapfrog development. This time, Guru Nanak sued. District Court Judge Lawrence Karlton ruled that the county had substantially burdened Guru Nanak’s religious exercise without justifying such a burden, and he ordered the county to approve the use permit. In reviewing the lower court’s decision, the Ninth Circuit first had to determine whether the county’s denial of the second CUP application was a “substantial burden” under RLUIPA. The law permits government to impose a substantial burden only if it is in furtherance of a compelling government interest and is the least restrictive means of furthering that interest. Refusal to approve a land use entitlement is not necessarily a substantial burden under RLUIPA, but the county’s actions went too far for the court. “Most important to us,” Judge Carlos Bea wrote for the Ninth Circuit, “the history behind Guru Nanak’s two CUP application processes, and the reasons given for ultimately denying these applications, to a significantly great extent lessened the possibility that future CUP applications would be successful.” “The county imposed a substantial burden here based on two considerations: (1) that the county’s broad reasons given for its tandem denials could easily apply to all future applications by Guru Nanak; and (2) that Guru Nanak readily agreed to every mitigation measure suggested by the Planning Division, but the county, without explanation, found such cooperation insufficient.” The court pointed out that the county rejected the first proposal because of traffic and noise impacts on neighbors, and rejected the second application partly because the site was too remote. The court also noted that “many other churches already exist on agriculturally zoned land,” including a Sikh temple less than a mile from Guru Nanak’s second location. “Hence the county inconsistently applied its concern with leapfrog development to Guru Nanak,” Bea wrote. “Because the county’s actions have to a significantly great extent lessened the prospect of Guru Nanak being able to construct a temple in the future, the county has imposed a substantial burden on Guru Nanak’s religious exercise,” Bea wrote. And because the county conceded it had no compelling government interest for its decision, Judge Karlton properly invalidated the county’s denial of the CUP application, the court concluded. The court contrasted its decision with the ruling in , 360 F. 1024 (9th Cir. 2004), in which the court ruled that Morgan Hill’s refusal to rezone a closed hospital for use as a Christian college did not violate RLUIPA (see , April 2004). In that case, Bea wrote, there was no evidence that the city would reject the college’s application for a different site in town. As for the law’s overall constitutionality, the court ruled, “RLUIPA is a congruent and proportional response to free exercise violations because it targets only regulations that are susceptible, and have been shown, to violate individuals’ religious exercise.” The Case: , No. 03-17343, 06 C.D.O.S. 6959, 2006 DJDAR 10128. Filed August 1, 2006. The Lawyers: For Guru Nanak: Michael Barrette, (530) 674-5996. For the county: Jeffrey Melching, Rutan & Tucker, (714) 641-5100.

Twenty years ago this fall, the population of California stood at slightly north of 27 million people – an alarming increase of 4 million since the 1980 Census. Many people were wondering how the state would be able to accommodate such a huge population. When you take a look at this world – the world that was born into in 1986 – it looks on the surface to be dramatically different from today. Yet in many important ways, not much has fundamentally changed. Cities and counties play politics and think about revenue in creating plans; developers try to bust the plans to respond to the market and make money; citizen groups use the ballot and the lawsuit to try to get what they want. Everybody operates under a land use planning and entitlement system that was set up during the 1970s, when California was a suburban state. In 1986, George Deukmejian, a Republican prosecutor from Long Beach, was governor. Dianne Feinstein was the mayor of San Francisco; Tom Bradley was the mayor of Los Angeles. Willie Brown had turned speaker of the assembly into maybe the most powerful job in the state. Arnold Schwarzenegger was basking in the success of the first “Terminator” movie and was filming another movie, “Predator,” about U.S. commandoes facing off against an alien in Central America; one of his co-stars was wrestler Jesse Ventura, who was killed by the alien in the movie. (At the end, Arnold cornered the alien, which then blew itself up, kind of like Phil Angelides.) After close to a decade of sluggishness, a real estate development boom had kicked into high gear. The average home price was $133,000 – up almost 12% from the year before. In super-expensive areas like the Bay Area and Orange County, the average home price had crept up above $160,000. One of California’s U.S. senators, housing champion Alan Cranston, introduced a bill loosening federal mortgage requirements to make houses more affordable to first-time buyers. At President Reagan’s insistence, Congress had just passed a tax reform bill that virtually eliminated the tax advantages of building apartments – and which would set off a 15-year trend toward single-family home construction. No one ever used the word “infill” in 1986. There was no such thing as a “mitigated negative declaration.” Few people talked about endangered species in the context of private real estate development. Everybody complained that “blight” was a loose term but nobody could do anything about it. Fewer than 20% of California’s cities and counties had a certified housing element and nobody much seemed to care. In November 1986, the state’s voters cast ballots on a $500 million prison bond, a $100 million water bond, and a $400 million school bond. In the wake of Proposition 13, which required a two-thirds vote for most local tax issues, nobody could figure out how to pass a local bond for schools or anything else. The hottest thing in the real estate market was office space. Business was booming, and companies of all sizes had an insatiable appetite for space — both downtown skyscrapers (as exemplified by the 70-story Library Tower in L.A.) and suburban office parks (such as the gigantic Hacienda Business Park in Pleasanton). Indeed, the suburbanization of offices and jobs was one of the biggest stories in California, because nobody had ever seen such a phenomenon before. And average folks weren’t always happy about it. Enraged by six-story office buildings on Ventura Boulevard towering over adjacent backyard swimming pools, voters in the City of Los Angeles rebelled by passing Measure U in November 1986, which cut the size of allowable commercial buildings in half all over the city. Measure U was the tip of the iceberg. Having been granted easy access to the ballot on land use issues by the California Supreme Court only a few years before, citizen groups around the state responded to the real estate boom with an unprecedented wave of ballot initiatives aimed at restricting growth. Starting in the 1970s, there had been a few local ballot measures dealing with land use issues each year. But in 1986 the number ballooned to 51. The California Environmental Quality Act (CEQA) was still regularly used by environmentalists around the state to kill projects, and mitigation wasn’t a concept people thought about all that much. Environmental lawyers frequently dragged CEQA lawsuits into the appellate courts in hopes of expanding the law’s requirements and had little reason to believe they wouldn’t keep winning. Most California Supreme Court justices were liberals, and the Chief Justice was Rose Bird, the ultra-liberal who had been appointed by Jerry Brown. In a sign of things to come, Bird and two colleagues were ousted in a recall election that November. The legal backlash against strict land use regulation had barely begun. It was unclear just how much power local governments had to regulate private landowners, or how strong those landowners’ rights were. But two key takings and exaction cases from California were pending before the U.S. Supreme Court – and – and land use lawyers around the state were eagerly awaiting the outcome. In looking back, it’s fair to divide this score of years since published its first edition into four periods of approximately five years each, reflecting the economic cycles and political change of the era. 1986-1991: The Go-Go Years The boom of the late ’80s was a sight to behold. After more than a decade of sluggishness – including an absolute halt to population growth during the late ’70s – California saw record levels of housing construction, a hot office market, and a mini-mall boom. This, predictably, led to a backlash against growth. Part of the reason for the backlash was that Proposition 13’s passage in 1978 had left the state bereft of the capacity to build new infrastructure – especially roads – so congestion was on the rise. Part of the reason, as well, was that the office boom of the period created some early infill strife between developers and neighbors, particularly in older strip commercial areas. But the biggest reason was simply that, back in 1980, the California Supreme Court had made it easy for citizens to put general plan amendments on the ballot in , 28 Cal.3d 511. In particular, 1988 was the zenith of the political frenzy over growth. That year, 89 growth-related measures were on local ballots, including major growth-control proposals in Orange, Riverside, and San Diego counties. Growth was a major topic in the Legislature, and Willie Brown even took a flier on the idea of eliminating local governments and replacing them with powerful regional governments – elected, of course. Meanwhile, the median home price ballooned from $133,000 in 1986 to $168,000 in 1988 to $196,000 in 1989 – a 50% increase in only three years. By 1990, the governor’s race featured two big-city mayors – Dianne Feinstein of San Francisco and Pete Wilson of San Diego, who by then had moved onto the U.S. Senate – who were considered experts on managing growth. In the debate that year, Feinstein, prohibited by the rules from using notes, wrote “growth” on her hand to remind her to hammer Wilson about it. Wilson won, and everybody expected him to bring the same innovative growth management efforts to Sacramento that he had used in San Diego. 1991-1996: At The Bottom By the time Wilson was inaugurated in January of 1991, however, the growth boom was past its peak. Housing prices began to flatten out and production began to decline. The joke was Wilson just wished he had some growth to manage. As expected, Wilson moved forward with his “Strategic Growth” initiative, but it did not come out until 1993. By then, with California in the depths of the recession, Wilson had become a more conservative, business-oriented Republican and the focus of his growth management effort was an attempt – unsuccessful, as it turned out – to weaken the California Environmental Quality Act. He also rejiggered the property tax allocation formula so that cities and counties got even less property tax than before, thus making housing development in particular a money loser for almost every local government. This was the era of gloom, especially in Los Angeles, which was hit hard by both an economic downturn and other disasters, such as the riots of ’92, the fires of ’93, the earthquake of ’94. At one real estate developers’ conference during this period, the keynote speaker told each developer to look to his left and his right and make note of his neighbors, because within two years, neither of them would be in the real estate business. The speaker turned out to be right. Home prices, which had risen 70% in the six years before 1989 (from $114,000 to $196,000), dropped 10% in the six years afterward (from $198,000 to $178,000). Developers told themselves to “stay alive ’til ’95.” As is often the case during recessions, traffic congestion alleviated and housing affordability improved dramatically. And this took the edge off of growth-control madness. There were 79 land-use measures on local ballots in 1990; the next year there were 18. In retrospect, however, the world of planning and development in California used this breather to right itself. A major redevelopment reform passed the Legislature during 1993. Local governments gradually figured out how to win the two-thirds elections required by Proposition 13 to pass local bonds for public improvements. The use of Mello-Roos bonds and other alternative methods of financing infrastructure became popular. State and federal biologists refined the process of habitat conservation planning, leading to more up-front plans to set aside sensitive land. The California Supreme Court, gradually becoming more conservative because of Republican appointments, put an end to the endless tape-loop of CEQA analysis in , 52 Cal.3d 553 (1990), thus converting CEQA from a project-killer into a mitigation machine. 1996-2001: On The Rebound Beginning in 1996, housing production began to increase and home prices started to rise again. The Bay Area had never really crashed – prices had stayed high all through the recession – but Los Angeles had gone deeply into a hole and was finally, gradually, beginning to emerge. The office market was no longer hot. Coming out of the recession, the biggest driver of real estate was retail – and, more specifically, “entertainment retail.” Old Pasadena, Third Street Promenade in Santa Monica, the Gaslamp District in San Diego, Irvine Spectrum and Valencia Town Center all came to life. The success of these places suggested a renewed interest among Californians in experiencing urban places, either real or fabricated. It also led to the greatest movie-theater construction boom since the 1920s, much of it financed with redevelopment dollars by cities desperate to anchor either a real downtown or an ersatz one. Meanwhile, paradoxically, both housing prices and housing production began to go upward quickly, the apparent result of a long period of housing underproduction during the ’80s and early ’90s. Critics of planning also blamed the growth control measures that were put into place during the boom years. Unlike previous boom times, however, this one went forward without apartments. A variety of factors – including the change in the depreciation laws during the ’80s, construction defect liability laws, and growing political resistance to density – led to an almost exclusive focus on single-family homes during the late ’90s. But there was a growing mismatch between new homes and people. Mostly because of land availability, single-family construction drove deeper into the Inland Empire and the Central Valley. But because of the maturing of immigrant families from the ’70s and ’80s, most of California’s additional residents lived in older and increasingly crowded areas closer to the coast, such as Los Angeles, Santa Clara, and Orange counties. Once the recession was over, everything seemed to kick-start. Home prices rose by half during this period, reaching the quarter-million-dollar mark in 2001. Construction of infrastructure, including parks and public open space, moved forward rapidly. New freeway and tollway segments were built; local governments passed transportation taxes and bonds; and state voters approved bond issues in vast numbers. At some point during the 1990s, pollsters realized that California voters were not sensitive to the in any proposed bond issue; if they were for, say, schools or parks or prisons, they’d pass a billion-dollar bond issue just as easily as a million-dollar one. The size of state school bonds grew from $800 million in 1988 to $3 billion in 1996 to $13 billion in 2002. Land-use ballot measures picked up again during the late ’90s – as would be expected by the uptick in development. By 2000, there were 70 measures on ballots around the state. But this time the effect was different. Ballot measures on growth were not, generally speaking, radiating more broadly across California. Instead, they were appearing again and again on the ballot in the same areas – San Diego, Ventura, Alameda, Contra Costa, and Sonoma counties especially. California was developing two different political cultures about growth – one along the coast, where everybody expected to vote on land use, and one inland, where they didn’t. 2001-2006: The Infill World During the last five years, the median home price has doubled to more than a half-million dollars. Although prices have leveled off in the last year or so, they have nevertheless tripled since the low point a decade ago and they’ve almost quintupled since was founded in 1986. In fact, home prices have gone so high, 2% of all California adults now have licenses to sell real estate. This rapid price rise has had huge ramifications by making home purchases almost impossible for even upper-middle-class folks, and fostering the widespread use of negative amortization, interest-only mortgages, and other creative finance tools. But the half-million-dollar house has also revolutionized planning and development, at least in coastal areas, in one important way: It makes residential infill projects profitable. As a result, California has seen more condo construction during the last five years than in the previous 20. And those condos have not, by and large, been in suburban locations. Generally speaking, they’ve been in existing urban areas like Oakland, San Jose, Pasadena, and San Diego. In many cases – including Old Pasadena and downtown San Diego – they have piggybacked on entertainment retail and new transit lines that were built during the ’90s. And these condo developments often include retail, office, and other mixed-use components. The bottom line is that home prices aren’t the only thing that have changed in California over the last 20 years. Population demographics, the economy, and the built environment have begun to change in significant ways that the first issues of could only hint at. The best way to say it is this: California in 1986 was still a mostly suburban state – growing fast but in a fairly conventional way. Today, California is undeniably urban, and it will only become more urban in the future. Yet the planning system itself – which is, of course, the underlying subject of every story – doesn’t bend to this new reality very easily. The world of general plans, the Subdivision Map Act, CEQA, and redevelopment was pretty much fixed by the end of the 1970s. This system has received a few nips and tucks since then, but there has been no fundamental change. And for many reasons – among them term limits in Sacramento – there is likely to be no fundamental change in the near future. It’s not easy to predict the trends that lie ahead. No one really knows how deep we’ll go into a real estate recession now, or how long it will be before we bounce out of it, or even what bouncing out of it will look like. Nor can we predict whether inspired political leadership will lead to sweeping reform – as has happened in some states. Looking back, however, it is clear that came on the scene toward the end of a 20-year period of pretty significant change in the land use system – general plan law was revised, CEQA was born and expanded, redevelopment came into common use, Proposition 13 fouled up everything. The last 20 years have been a period of creeping incrementalism. Right now, the next 20 don’t look much different. And that means that, more and more often, planning in California will seems like a workaround of the system rather than constructive use of it.

After five years of planning, dozens of public meetings and a couple advisory elections, Humboldt County has abandoned a plan to establish redevelopment project areas in rural communities spread around the county. The Board of Supervisors voted unanimously in September to abandon the controversial plan, and supervisors said they may even shut down the redevelopment agency. The decision pleased the leaders of some special districts that feared a loss of revenue and control, as well as both development interests and slow-growth activists — all of which may show just how unpopular the redevelopment proposal was. Still, some people are lamenting a lost opportunity to invest money for economic development purposes, infrastructure and affordable housing in struggling communities with few resources. “It was a double-edged sword,” said Steve Paine, general manager of the Willow Creek Community Services District (CSD). Redevelopment could have helped fund a needed wastewater treatment plant for the community, which lies on Highway 299 in the coastal mountain range east of Eureka. However, the county appeared to be setting up a “fiefdom,” and some of the project area boundaries would have diverted needed revenue away from small special districts, Paine said. “It was poorly presented by the county. It took my board a year and a half to understand it,” Paine said. Redevelopment is a tool used predominately by cities. Only 30 of California’s 58 counties have redevelopment agencies, according to the state controller’s office. The Humboldt County redevelopment plan was an attempt to address conditions in small communities that have been hurt by declines in the timber business, the fishing industry, or both. The plan proposed to fund brownfield cleanup at closed lumber mills, infrastructure improvements such as wastewater and water systems, tsunami warning systems in some coastal communities, and affordable housing rehabilitation and development. A study estimated that redevelopment would generate $66 million in tax increment over 45 years. The plan originally included all or parts of eight unincorporated communities in a noncontiguous redevelopment project area: Alton, Fields Landing, Glendale, Manila, Orick, Redway, Samoa/Fairhaven and Willow Creek. However, community activists and special district leaders in some of the communities opposed the plan for various reasons. In Redway, a very small community amidst the redwood trees of the south county, redevelopment met resistance because it could encourage growth. Residents in the coastal community of Manila took offense to having their town called “blighted.” In Glendale, concerns arose about the possible use of eminent domain for affordable housing development. A lawsuit was threatened in Samoa because there is already some new development in the old mill town. The redevelopment plan also got dragged into the larger battle over growth in Humboldt County. For several years, a group of landowners, developers and business interests called Humboldt Economic and Land Plan (HELP) has fought the county over an ongoing general plan update, a new housing element, and anything else concerning growth. Kay Backer, a Sacramento-based consultant to HELP, said the county refused to work with the group, with a home builders organization and with local citizens in devising the redevelopment plan. “The way it was proposed, it was taking money away from the fire districts and putting it under the control of the county” Backer said. Trust of county government is low, she said. In November 2005, community service districts in Manila and Redway conducted advisory elections on whether the county should include the communities in the redevelopment project area. In Redway, 85% of voters said no to redevelopment; In Manila, 54% rejected the idea. The Manila CSD Board of Directors struggled with the redevelopment plan, said General Manager Judy Hollifield. Ultimately, though, the board organized opposition because of concerns about the district losing revenue to the county’s redevelopment agency. County officials ended up deleting both Redway and Manila from the project area. In June, the Board of Supervisors directed staff members to further pare back the plan. The revisions proposed dividing up revenue so that individual communities would be assured 50% of the local tax increment, while the other half would go to a combined fund. Also, the plan eliminated redevelopment bond financing for the first five years of implementation. The changes, Community Development Director Kirk Girard wrote in a staff report, shift the focus “from the development of a centrally planned slate of projects for bond financing to a community based selection of individual projects that can be funded with grants and loans using tax increment as matching funds. Over time, the same investment levels could be achieved but the new strategy will require increased efforts to secure funding from outside sources.” But even the more modest plan turned out to be too much. During a September 18 meeting at which redevelopment opponents again heavily outnumbered supporters, the Board of Supervisors voted unanimously to drop redevelopment altogether. “The hue and cry from the affected communities was just too much,” said Board of Supervisors Chairman John Woolley. Paine said the decision was a blow to his CSD in Willow Creek. Redevelopment could have provided $2 million to $3 million for the town’s first wastewater treatment system. The district, which serves more than 2,000 people, still wants to move ahead with the project, but funding is very uncertain now, he said. The lack of a wastewater treatment system “will inhibit having a new market. It will inhibit a new hotel. It will stifle multi-family residential growth,” Paine said. In addition, Willow Creek has a 42-acre former mill site that cannot be reused without sewer service, he said. Backer, of the group HELP and who previously served on a joint city-state redevelopment board for downtown Sacramento, said redevelopment “could be a positive force.” And she readily conceded that portions of the county need infrastructure investments, economic development and affordable housing. But, she contended, the county cannot pursue those things until it has a better general plan. “Part of the problem is that they haven’t addressed the need for so long. The no-growthers haven’t wanted to talk about roads or sewers or other infrastructure,” Backer said. “ Supervisor Woolley conceded that completion of a new general plan probably should have preceded the redevelopment effort. With redevelopment off the agenda, the county will now focus on the general plan update, he said. Contacts: Steve Paine, Willow Creek Community Services District, (530) 629-2136. Kay Backer, Humboldt Economic and Land Plan, (916) 486-2638. Judy Hollifield, Manila Community Services District, (707) 444-3803. Humboldt County redevelopment website: http://co.humboldt.ca.us/planning/econdev/redevelopment.asp