In one of the first published opinions upholding an environmental impact report’s water analysis, the Third District Court of Appeal has overturned a lower court’s ruling favoring opponents of a gravel mine proposed in Placer County. The Third District ruled that the water analysis was adequate and that Placer County did not have to revise the EIR after the project applicant altered the project and its phasing. On the later point, the court ruled there was substantial evidence to support the county’s decision that the project changes created no new environmental impacts. The decision appears to clear the way for a mining project originally proposed 12 years ago. Attorney Susan Brandt-Hawley, who represented a citizens group fighting the project, said she was surprised by the decision but declined to discuss it in detail. Attorney John Taylor, who represented mining company Teichert, said the court upheld the water analysis because the court noted the project “amounted to the status quo” for water usage. “It makes little difference whether it’s used for agriculture or for mining and reclamation,” Taylor said. In December 1994, Teichert submitted an application for a sand, gravel and granite mine on 945 acres of an 1,878-acre site, about four miles north of Lincoln. After concerns were raised about traffic and the site’s proximity to residents, Teichert acquired an additional 1,577 acres and revised the project. It proposed mining 1,000 acres of a 3,455-acre site in nine phases over 85 years. Much of the site has been a cattle ranch. The county released a draft EIR in 1999 that included a “mitigated design alternative” that limited mining to 40 years and 785 acres. In November 2001, Teichert accepted the mitigated design alternative but changed the phasing so that the company would avoid land covered by the Williamson Act until the Williamson Act contracts (which prevent development) expire. The county released the final EIR in January 2002. Four days later, Teichert submitted a revised project application to reflect the mitigated design alternative, new phasing and a relocated processing plant. In November 2002, the Planning Commission certified the FEIR and approved the project, which was called the “revised mitigated design alternative.” The Board of Supervisors upheld the decision in early 2003. A group called Western Placer Citizens for an Agricultural and Rural Environment (WPCARE) sued, alleging a number of violations of the California Environmental Quality Act (CEQA). Retired Mendocino County Superior Court Judge James Luther, sitting by assignment in Placer County, ruled that the county violated CEQA by not describing the revised project and new phasing in the EIR, and by inadequately analyzing the availability of a long-term water supply. On appeal by Teichert and the county, the Third District overturned the lower court. The Third District first addressed the question of new information in the EIR. “The trial court determined the EIR had to be revised to include the changes made to the project before the county determined whether the changes were significant enough to require recirculation,” Justice George Nicholson wrote for the unanimous appellate panel. “The authority the court cited to support its holdings does not expressly do so. The parties have directed us to no provision in CEQA or the Guidelines, and we have found none, that requires all changes made to a project after the final EIR is released but prior to certification to be included in the EIR.” According to the court, the question is whether substantial evidence supports the county’s decision that the new information was not significant enough to require revision and recirculation of the EIR. The court concluded that such evidence did exist, as the county had determined the last round of project modifications were environmentally superior to the mitigated design alternative. On the issue of water, the trial court found that the analysis was inadequate because there was not substantial evidence that Teichert had a dependable annual water supply to implement the reclamation plan, which calls for continued agricultural uses and creation of two lakes on 345 acres. But the Third District said that Judge Luther made a factual error. The appellate court said Teichert has a right to 2,437 acre-feet of water from Nevada Irrigation District, may purchase surplus water from the district, has rights to a creek that flows through its property, and has the right to groundwater beneath its property. “Teichert asserts, and WPCARE concedes, that to be sufficient, an EIR need not identify a guaranteed source of water. We agree,” Nicholson wrote. “No water supplier can guarantee an adequate supply of water in all circumstances. If an EIR were required to identify a guaranteed source of water, then no EIR would ever be sufficient. The EIR identifies existing, available and sufficient sources of water for the project and in that respect is sufficient.” The court contrasted the situation to that in other cases where courts have rejected water analyses. In , (1996) 48 Cal.App4th 182, the court rejected an EIR because the proposed project needed a new source of water that had not been identified (see , September 1996). In , (2003) 106 Cal.App.4th 715, the court rejected an EIR that relied on water from the oversubscribed State Water Project (see , April 2003). In , (2003) 108 Cal.App.4th 859, the court threw out an EIR that failed to analyze the impacts of separate projects that called for different uses of the same water (see , July 2003). The Teichert project, on the other hand, does not need a new water supply, has identified and available water sources, and does not rely on water supplies that may be changed, the court determined. Although the facts of the case may limit the decision’s scope as a precedent, the opinion could support an argument in a case where planned urban development would require the same amount of water as previous agricultural uses on the same site, attorney Taylor said. The Case: , No. C049364, 06 C.D.O.S. 10396, 2006 DJDAR 14839. Filed November 9, 2006. The Lawyers: For WPCARE: Susan Brandt-Hawley, (707) 938-3908. For the county: Valerie Flood, county counsel’s office, (530) 889-4044. For Teichert, Inc.: John M. Taylor, Taylor & Wiley, (916) 929-5545.

The U.S. Fish and Wildlife Service’s determination that listing the Sierra Nevada Mountain yellow-legged frog as an endangered species was “warranted but precluded” has been rejected by the Ninth U.S. Circuit Court of Appeals. The Ninth Circuit did not rule on the merits of the decision by the Fish and Wildlife Service (USFWS). Rather, the court ruled that the agency did not follow the Endangered Species Act’s “warranted but precluded” procedure. Although the Ninth Circuit ruled for environmental groups that appealed a district court’s decision in favor of the USFWS, the court did not go so far as to order the agency to place the frog on the endangered list. In February 2000, the Center for Biological Diversity (CBD) petitioned the Fish and Wildlife Service to list the yellow-legged frog as an endangered species because, like the already protected red-legged frog, the once-plentiful yellow-legged species was vanishing from much of its historic range. The agency moved slowly, so the CBD sued and in late 2001 a district court ordered USFWS to make a determination on the yellow-legged frog. In January 2003, the agency published its findings. The USFWS determined that species populations were declining, that isolated populations were likely to become extinct and that threats to the frog were imminent. The agency concluded that listing the yellow-legged frog as endangered was warranted. But the agency further concluded that listing the frog was “precluded by other higher priority listing actions.” The agency contended that all the funding in its listing program was dedicated to complying with court orders and judicially approved settlement agreements (see , November 2001). So USFWS designated the yellow-legged frog as a “candidate” for future listing. The CBD and the agency went back to court. This time, District Court Judge Garland Burrell ruled for the federal government. Although USFWS did not follow the exact procedure in the Endangered Species Act, Judge Burrell upheld the “warranted but precluded” determination because the agency’s path could reasonably be discerned. But a discernable path was not enough for the Ninth Circuit, which overturned Judge Burrell. The Ninth Circuit noted that earlier it had narrowly defined “the circumstances under which the secretary may invoke the excuse of ‘warranted but precluded.’” In (“ ”), 254 F3d 833, the Ninth Circuit characterized the USFWS’s “warranted but precluded” determination for the Gila chub as “foot-dragging efforts of a delinquent agency” (see , August 2001). Under §4(b)(3)(B) of the Endangered Species Act and the decision, the “warranted but precluded” finding must be based on the agency’s work on other listings and on an expeditious process. But what the court called the “frog decision,” contained “no determination at all that expeditious progress in listing or delisting other species is being made. … The decision contains no description or evaluation of the data or reasons why listing the frog is actually precluded,” Judge Pamela Ann Rymer wrote for the Ninth Circuit. The USFWS argued that it had provided detailed support for its determination six months earlier in its 2002 “Candidate Notice of Review” (CNOR) statement, and again in May 2004 when it published the 2003 version of the CNOR. However, the warranted but precluded finding did not refer to the 2002 CNOR, and it could not have referred to the future 2003 CNOR, Judge Rymer noted. “ t may be that the homework was done, but it has to be turned in to the court,” Rymer wrote. “It is insufficient for requisite determinations to be lurking in the administrative record yet be unidentified in the decision itself.” The matter now returns to the Fish and Wildlife Service for further proceedings. The Case: , No. 04-16563, 06 C.D.O.S. 9751, 2006 DJDAR 13967. Filed October 18, 2006. The Lawyers: For CBD: Michael Sherwood, Earthjustice, (510) 550-6725. For Kempthorne, David Shilton, Department of Justice, (202) 514-2000.

Proposition 90 may have lost, but it hasn’t gone away for good. It is likely to be back in 2008. That means local planners and many of the developers they deal with will spend the next two years looking over their shoulders. They’ll also be looking at how things play out in Arizona, where the equivalent of Proposition 90 passed overwhelmingly. Proposition 90 would have reined in the use of eminent domain, but it also would have required compensation for regulatory takings, including any instance where a downzoning caused a substantial economic loss. The measure lost by only 5 percentage points. The bottom line here is an important shift in the battleground over property rights in California. For a quarter-century – dating back to the landmark ruling – that battleground has been the courts. And while property rights advocates continue to gain ground, they have rarely turned their courtroom victories into actual compensation because it is very difficult to prove a regulatory taking. Now the battleground has shifted to the ballot box. Largely funded by Americans for Limited Government – an organization financed by New York real estate investor and libertarian Howard Rich – organizations throughout the West have been trying to place Proposition 90-style measures on state ballots. A similar measure already passed in Oregon, while Proposition 90 equivalents were either defeated or knocked off the ballot by the courts in Nevada, Washington, Montana, and Idaho (where the Proposition 90 equivalent only got 24% of the vote in November). This means that the property rights push is now in the domain of political strategists rather than legal strategists. And the battle lines have already been drawn for 2008. Proposition 90’s proponents have announced they will try to re-run the initiative in two years. “It’s clear that with even a bit more money for advertising that 90 would have won easily,” said Proposition 90 consultant Kevin Spillane, a Republican strategist. Meanwhile, the proposition’s leading opponents – including local governments and redevelopment agencies – are talking about taking legislative steps to further rein in eminent domain as a way of inoculating themselves against an ’08 ballot measure. John Shirey of the California Redevelopment Association said it is likely that the anti-Proposition 90 forces will seek to place a more narrowly defined eminent domain measure on the ballot during 2008 in hopes of counteracting a broader measure that would include regulatory takings as well. The pro-90 campaign spent $4 million, the vast majority of it in gathering signatures to place the measure on the ballot in the first place. Supporters essentially ran no “Yes on 90” media campaign. Meanwhile, the anti-90 campaign raised and spent $11 million, mostly on hard-hitting television commercials in the last week. It’s clear that this unanswered TV campaign won the election for the anti-90 forces. The pro-90 forces believe that if they spend a little more money to run a campaign next time, they’ll win. Meanwhile, the anti-90 forces are recognizing how hard it is to raise money and run a successful campaign on what amounts to the initiative equivalent of a “down-ticket race.” The anti-90 forces had hoped to raise $20 million and say that if they had done so they would have scored a decisive victory. But they could raise only $11 million and they had to spend it in a crowded media market where both pro and anti forces on Propositions 86 and 87 were bidding up the price of political ads on television. About $136 million was spent by both sides on Proposition 87, the oil severance tax proposal, and $75 million pro and con was spent on Proposition 86, the cigarette tax proposal. Both measures were defeated. The victory in Arizona is attributable to the combination of a vigorous pro campaign and a difference in the business community between Arizona and California. In California, the Chamber of Commerce, the Farm Bureau, and even the well-respected California Taxpayers Association opposed Proposition 90. In Arizona, all the equivalent organizations endorsed Proposition 207. Arizona voters saw a series of compelling television commercials built around the theme of “Keep What You Own.” One ad highlighted injustices to women, the elderly, and minorities who own homes. If these same ads had run on California television during the last week or two of the campaign, Proposition 90 might very well have passed. (More amusing was an animated commercial featuring tough guys with New York accents suggesting local government opposition to the initiative amounted to a form of gangsterism. The ad ran in several Western states including Arizona and can be found on YouTube.) The politics of business across the planning counter in the next two years could well depend on how developers or local governments are feeling about their chances on the ballot. There was considerable pressure in some locations right before the election to move forward with downzonings or moratoriums, but the anti-90 advocates – led by the redevelopment association – advised against such moves on the theory that it would give ammunition to the opposition. Developers, on the other hand, may increasingly make their moves based on whether they think “Son of 90” will pass. They may speed things up if they are engaged in a redevelopment project. But they may also sit on their development plans so as not to stimulate a pre-election downzoning, especially as the 2008 election gets closer. In the meantime, all eyes will be on Arizona, where an identical measure passed. Lots of litigation appears in the offing. It’s unclear, however, whether the opponents of Proposition 207 will follow the same legal tack they took before the election. At that time, they argued that the measure violated the state’s requirement “revenue source rule” – a constitutional amendment passed by voters in 2004 requiring future ballot measures that mandate spending to identify a revenue source. The courts allowed the measure to go forward, saying that Proposition 207 did not necessarily mandate spending because government agencies may or may not engage in land use regulations that would trigger its provisions. Already, however, scattered skirmishes have occurred in Arizona regarding implementation of Proposition 207. Only days after the election, the tiny town of Etoy – located on Interstate 10 halfway between Phoenix and Tucson -- vastly expanded its borders to permit new development, claiming that under 207 the city had no choice. Developers in California may invoke the prospect of Proposition 90 in their planning negotiations over the next two years, but it is unclear as to whether they will actually support “Son of 90.” One approach the property rights advocates could take is to try to peel off the Farm Bureau, the Chamber, the Building Industry Association (BIA) or the Taxpayers Association by making some compromises. The potential would seem to be there. After all, the rank-and-file BIA member certainly has more to gain by restraining downzoning in greenfield locations than in protecting eminent domain for redevelopment projects. But the Proposition 90 forces do not seem inclined to make such overtures. Instead, they appear much more interested in trying to turn business opposition to Proposition 90-style measures into a political asset by suggesting that big business and big developers opposed Proposition 90 because they benefit from eminent domain. The day after the election, consultant Spillane said: “If I were a developer who benefits from abusing eminent domain … I would be very nervous and concerned about the election results.”

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.