A state appellate court has struck down a California Environmental Quality Act exemption for an air district rule permitting new power plants to offset emissions by paving roads. The court found that the Mojave Desert Air Quality Management District did not have adequate evidence to support its finding that the rule could not have a negative impact on the environment. Rather, the court concluded that opponents of the rule had presented evidence the rule could actually increase air pollution, harm plants and wildlife, and induce development. Run by representatives of member cities and counties, the air district covers much of San Bernardino County and eastern Riverside County. More than two years ago, the air district adopted Rule 1406. Although the rule was complicated, it essentially permitted new emitters of particulate matter (PM 10, or material that is no more than 10 microns in size) to offset their emissions on a one-to-one basis by paving dirt and gravel roads. The district employed a Class 8 exemption from California Environmental Quality Act (CEQA) review. That categorical exemption applies to regulatory agency actions "to assure the maintenance, restoration, enhancement, or protection of the environment." The groups California Unions for Reliable Energy and Center for Biological Diversity sued, arguing the rule did not qualify for a CEQA exemption because of the potential impacts of paving the 5,000 miles of unpaved roads within the district. The district said that any potential environmental impacts were highly speculative and unknown, and that any potential road paving would itself be subject to CEQA review. Riverside County Superior Court Judge Harold Hopp found that substantial evidence supported the exemption, and he ruled for the district. The Fourth District Court of Appeal, Division Two, took a far different view of the evidence. The court found that the district based the exemption as much on logic as on evidence, and the logic was questionable. Wrote Justice Betty Ann Richli, "The District reasoned, in part, that ‘Rule 1406 is positive to the environment as it will encourage additional road paving with commensurate reduction in particulate emissions from unpaved road dust entrainment.' This overlooks the fact that Rule 1406 merely provides for road paving as an offset for new, increased PM 10 emissions. Moreover, it does so in a one-to-one ratio. Thus, even assuming that (1) road dust is environmentally indistinguishable from other PM 10 and (2) road paving itself has no deleterious environmental effects, the net effect is, at best, a push. And if either of these assumptions is false, the net effect would be negative." The court noted that the groups opposed to the rule – who received amicus assistance from the attorney general's office during the litigation – submitted 86 pages of comments based on expert analysis. The groups argued that there is a difference between coarse road dust kicked up at ground level and the new sources of PM 10, which would mostly likely be power plants emitting much finer PM 2.5 (no more than 2.5 microns in size) from tall stacks at high velocity. The tinier particles are considered much more hazardous to human health, and their emission by way of tall stacks makes them a regional air issue. The groups also cited a letter from the California Air Resources Board that stated, "We believe there is no technical justification for allowing PM emission reductions from road paving to offset PM 10 increases due to natural gas combustion." The groups further argued that paving roads would lead to more and faster traffic, resulting in road kill of wildlife and habitat loss. And they contended that additional paved roads would encourage new development. The district maintained this was all speculation and the link between rule adoption and actual environmental impact was remote. The court, however, was unconvinced and pointed to the City of Victorville's endorsement of the rule so the city could use the paving of 1.37 miles of road to offset emissions from a new power plant. "The administrative record contains no evidence, as opposed to the district's bare assertion, that the environmental effects of the adoption of Rule 1406 are speculative," Richli wrote. "Basically, plaintiffs showed that trading a pound of PM 10 from road dust for a pound of PM 10 from combustion would mean that the resulting PM 10 would stay in the air longer, spread more widely and be more likely to cause disease. Also, the very act of road paving would produce still more PM 10 – mostly made up of PM 2.5 – while also having adverse biological and growth-inducing effects. The only thing that was even arguably speculative about these effects was their quantity." The fact that future road paving would be subject to environmental review was no basis for a categorical exemption, the court added. Besides, as the rule was written, the district would have little discretion to reject road paving as a mitigation measure, the court noted. In sending the case back to Superior Court, the Fourth District said the district could still use a Class 8 categorical exemption if it provides substantial evidence to support the exemption. The Case: California Unions for Reliable Energy v. Mojave Desert Air Quality Management District , No. E046687, 2009 DJDAR 15531. Filed October 30, 2009. For CURE: Marc Joseph, Adams, Broadwell, Joseph & Cardozo, (650) 589-1660. For the district: Michelle Ouellette, Best, Best & Krieger, (951) 686-1450.

A developer is not entitled to reimbursement or damages from a consultant hired by a local government to complete an environmental impact report, the First District Court of Appeal has ruled. Even when the consultant fails to complete an EIR in a timely manner, the consultant owes no contractual duty to the developer that paid for the consultant, the court concluded. If a project applicant could sue a government-hired consultant for damages, it "would be likely to compromise the independence and objectivity of environmental consultants" whose chief responsibility under the California Environmental Quality Act (CEQA) is to the public, the court determined. The lawsuit at hand involves a proposed resort development that appears to have died in the recession. In April 2005, Lake Almanor Associates L.P. submitted an application to Plumas County for the 1,400-acre Walker Ranch project. The developer proposed 1,032 residential units and a golf course, along with retail and resort amenities. Three months later, the county signed a contract with Huffman-Broadway Group to prepare an EIR that would be funded by Lake Almanor Associates. After Huffman-Broadway missed deadlines, the county sent a notice of termination to the consultant in June 2006. Huffman-Broadway sought more time and in September 2006 delivered a "preliminary working draft EIR." The county deemed the document unacceptable and sent a second notice of termination. Huffman-Broadway then sought payment for its services from the county, which demanded that Lake Almanor Associates pay the bill. The county also hired a second consultant to prepare an EIR and billed the developer for that document, as well. The developer then sued the consultant in Marin County Superior Court (Huffman-Broadway is based in San Rafael) seeking reimbursement and $50 million in damages for breach of contract, negligence, and negligent interference with prospective economic advantage. Essentially, Lake Almanor Associates argued that its sale of the property to a third party fell through because Huffman-Broadway failed to complete the EIR on time. Superior Court Judge W. Bruce Watson Jr. rejected the developer's claims. A unanimous three-judge panel of the First District Court of Appeal, Division Five, upheld the lower court's ruling. Lake Almanor Associates argued that the consultant had a contractual obligation to the developer to complete the EIR on time. But the First District said no such obligation existed. The court cited Mission Oaks Ranch, Ltd. v. County of Santa Barbara , (1998), 65 Cal.App.4th 713, in which a court refused to award damages to a developer who sued over what it claimed was an erroneous EIR. In Mission Oaks , the court ruled, "The county, as lead agency on the project, owes its duty to the public to release a proper EIR. The county owes no duty to assuage the desires of a potential developer" (see CP&DR Legal Digest , October 1998 ). Lake Almanor Associates argued that Mission Oaks did not apply because that lawsuit was over the content of an EIR, not production of the EIR in the first place. But the court insisted that the principles were the same: The duty of the government agency and the consultant is to the public, not to the developer. Suits seeking $50 million in damages could undermine the necessary independence and objectivity of consultants, the court found. "The exposure to potential claims of such magnitude, and even much smaller claims, could affect the availability of consultants and the fees they charge. This exposure would create incentives to complete the report that could undermine the analysis of the relevant environmental issues, creating a conflict between the consultant's duty to the public and its financial self-interest," Justice Mark Simons wrote for the court. " direct action against is not consistent with CEQA." The court used similar reasoning to reject the developer's claim that Huffman-Broadway was liable for negligence. "The analysis of the duty issue in Mission Oaks is helpful," Simons wrote. "The court pointed out that the contract for preparation of an EIR was ‘not intended to affect the applicant directly; it was intended to provide the county and public with the information it needed to assess the proposed project pursuant to CEQA.'" Holding the consultant liable to the developer could create a conflict that "would undermine the Legislature's goal of obtaining accurate EIRs for proposed projects," the court concluded. The Case: Lake Almanor Associates L.P. v. Huffman-Broadway Group Inc. , No. A122563, 2009 DJDAR 15526. Filed October 30, 2009. The Lawyers: For Lake Almanor Associates: William Neasham, Neasham & Kramer, (916) 853-8030. For Huffman-Broadway Group: George Ziser, Lewis, Brisbois, Bisgaard & Smith, (415) 438-6659.

The Regional Targets Advisory Committee reached agreement on basic principles that the California Air Resources Board should adopt in implementing SB 375 and setting land use/transportation targets for greenhouse gas emissions reductions. But if a panel discussion at an SB 375 event in Ontario last week is any indication, the individual RTAC members are still having a big of a hard time getting past their own agendas. The discussion by RTAC members was put together by the Southern California Association of Governments at a conference attended by several hundred local officials from around the Los Angeles region. Many RTAC representatives – including environmentalists, local government officials, engineers, and scientists – seemed to fall back on their standard positions, especially in their opening comments. Yet the discussion was best summed up in a remark by Ontario City Manager Greg Devereaux, who said: "The question isn't simply, how do we reduce GHGs? The question is, how do we create the housing and jobs needed for a growing population while reducing GHGs?" A good deal of the discussion revolved around the RTAC's recommendation that CARB adopt a statewide per-capita emissions reduction target. Representing cities on the RTAC, Devereaux unsurprisingly highlighted the idea that different locales have different markets – a reflection of the fact that California has almost 400 cities of all shapes and sizes. "Some of the discussion early on tended to be big-city centric and Northern California-centric, not understanding the challenges in other markets," Devereaux said. "Densities that work in some markets don't work in others. It's great to talk about TOD but in some markets the reality is that we have to do transit-ready development because the transit won't be there for a decade or two." But fellow RTAC member Mike Woo, dean of the Cal Poly Pomona's College of Environmental Design and a member of the Los Angeles City Planning Commission, warned against placing too much emphasis on differing situations and differing contexts. "Sometimes I think that in California geography is used as a diversionary tactic the same way race is used elsewhere," Woo said. "It's an excuse to not think about or confront the underlying issues. We need to think about how local governments and regional entities can do their fair share to respond to a statewide problem. It's appropriate to think about this on a per-capita level. Ultimately individuals have to take some responsibility for an individual per-capita contribution." Perhaps most interesting from the local government point of view was the discussion of RTAC's recommendation that a set of "Best Management Practices" be created for local governments to use in reducing greenhouse gas emissions reductions. Barry Wallerstein, head of the South Coast Air Quality Management District, noted that the RTAC spent more time on BMPs than any other topic, yet seemed to acknowledge that no good list exists. But Ventura County Supervisor Linda Parks, who represents Thousand Oaks on the RTAC, seemed to reflect the prevailing view in the room when she said: "I think the benefit of a BMP is to have it be understandable. We can talk about targets and those kind of things, but that quickly becomes over the head of policy makers and normal citizens. Just give me a menu of what I can do, how much GHG will be reduced, and I know what I can do." – Bill Fulton

As the full weight of SB 375 starts to become evident, divisions on the state board charged with implementing the legislation are coming to the forefront. Some members of the Air Resources Board (ARB) are welcoming what they see as an opportunity to overhaul land use planning and remake cities, while others see the state intruding into an area where it is not wanted and has no experience. The divergence emerged publicly during Thursday's ARB board meeting to consider recommendations from the Regional Targets Advisory Committee (RTAC), a group charged with helping determine the methodology for setting regional greenhouse gas emissions reductions targets. The RTAC report (see CP&DR , October 1, 2009 ) received a generally favorable reception from the board, which postponed a final decision on committee recommendations until early 2010. However, one board member – San Diego County Supervisor Ron Roberts – voiced a concern that others in local governments and even in Sacramento have been expressing in the background regarding the potentially expansive role the board may assume. He said the ARB appears to be heading toward becoming a "super planning agency," even though that would be outside of its mission and expertise. "I'm afraid that we're getting way off," said Roberts. "We've never been in the position of ruling on local land use planning. That's what we're doing." Board member Ron Loveridge, who is the mayor of Riverside, and board member Daniel Sperling, who is director of the Institute of Transportation Studies at University of California, Davis, responded that SB 375 presents the state with an historic opportunity. The legislation – which created the RTAC and requires the ARB to set regional greenhouse gas emissions reductions targets next year – uses climate change concerns to "do something about our cities," Sperling said. Strategies to reduce greenhouse gas emissions are the same strategies that could make cities more livable and healthier, he said. "This is really a historic proposal," Loveridge added. "This is an effort to shape the urban form in ways that I have no past memory of." And that, said Roberts, is what is so frightening about SB 375. Roberts pointed to the board's decision last year on the scoping plan for implementation of AB 32, the law requiring the state to reduce greenhouse gas emissions to 1990 levels by 2020 and to 80% less than 1990 levels by 2050. The scoping plan calls for the state to cut emissions by 174 million metric tons of carbon dioxide equivalent (MMT) by 2020. After heavy lobbying by development interests and environmentalists, the board set a tentative goal for reductions from land use changes at 5 MMT – a decision generally applauded by the developers (see CP&DR Insight , January 2009 ). James Goldstene, ARB executive officer, said the 5 MMT figure was simply a placeholder. Lynn Terry, deputy executive officer, said the RTAC did not assume 5 MMT was the ultimate goal. The RTAC did not recommend any numeric target. But Roberts insisted the RTAC and staff had discarded the board's scoping plan decision without showing that the 5 MMT figure was faulty. Later on, board members and RTAC members said that "business as usual" planning would not be sufficient to meet greenhouse gas emissions reductions goals. Roberts challenged that assertion. In San Diego County, business as usual means spending $1 billion to expand the trolley system and rewarding communities that approve higher density housing, he said. "We're doing a lot of things, and I'm concerned we're not going to get credit for it. The state has a habit of penalizing you for doing the right thing," Roberts said. "I don't trust the state to do planning, and I don't trust the state to review our land plans." Sperling and other board members said they have no intention of putting the ARB in the land use planning business. Still, the SB 375 process calls for the board to review and approve "sustainable communities strategies" that metropolitan planning organizations must adopt to meet the ARB-mandated greenhouse gas emissions reductions targets (see CP&DR Blog , October 1, 2008 ). Because sustainable communities strategies have never been done before, no one is exactly sure what they will look like. But they could well be broad brush or even fairly detailed regional land use and transportation plans that are aimed at getting people to drive fewer miles, which likely equates to higher densities, mixed uses, more transit and compact neighborhoods. Ontario City Manager Greg Devereaux, an RTAC member, said local officials have great uncertainty over the scope of SB 375. "Densities that work in some markets are not economically viable in other markets. The fear is that these factors will not be considered in determining what is ‘ambitiously achievable,'" Devereaux said, referencing the ARB's goal for the RTAC. Board member Ken Yeager, a Santa Clara County supervisor, said more local planners and elected officials need to be participating in the SB 375 process right now, because it could ultimately result in local officials having to make unpopular decisions about growth. Said Yeager, "Most people win elections by saying, ‘No, I'm a NIMBY.'" – Paul Shigley

The environmental impact report for the huge Sacramento rail yards redevelopment project was upheld earlier this month by Superior Court Judge Lloyd Connolly. Two lawsuits over the EIR were filed – one by a group of environmentalists and one by Westfield, which owns Downtown Plaza not far from the rail yards. Both suits claimed Sacramento did not adequately address traffic and air impacts. For good reason, the Westfield suit has received most of the attention. Westfield obviously feels threatened by the 1 million square feet of retail development planned for the rail yards – and it should feel threatened. There is every reason to fear that, once it gets going, the rail yards project will suck the life out of downtown and midtown , both of which still need plenty of new investment. But Westfield also has itself to blame. The Downtown Plaza is a disaster. I don't know what its vacancy rate is, but the place looks about half-empty. The benches and potted plants that are ubiquitous at most malls are almost completely absent from the univiting Downtown Plaza. When I was there recently, Tony Bennett crooned throughout the mall. I was told that blasting Bennett and Frank Sinatra at high volume was intended to discourage hoodlums from loitering. Not long after he became mayor, Kevin Johnson had sharp words for Westfield. He accused the company of ignoring its downtown property while it invested heavily in the suburban Galleria at Roseville. Part of the problem is that Downtown Plaza is neither fish nor fowl. Located at the end of the K Street mall, the area was an open air shopping plaza until about 20 years ago. The property owner at the time, Trizec Hahn, then built another story and added a roof. But neither did it completely enclose the mall in climate-controlled comfort, as there are wide open-air entrances on Seventh and Fifth streets. I'm sure downtown San Diego's thriving Horton Plaza was the model for the project, but the design has never worked as well in Sacramento. What to do? Well, Johnson has taken the initiative on getting a new basketball arena built downtown. To me, the most obvious location for an arena is the site where Downtown Plaza now languishes. A well-designed and heavily used arena could be the project that finally turns around the K Street Mall and the west end of downtown. The arena could also help ensure the viability of downtown after the rail yards project starts to become reality. A busy arena could even be a selling point for the proposed 12,000 housing units only a short light rail or streetcar ride away in the rail yards. Plus, if state lawmakers are willing to exempt a football stadium and gigantic entertainment complex in suburbia from CEQA, they surely would be willing to provide similar consideration to a transit-oriented basketball arena within walking distance of their offices. – Paul Shigley

The Urban Land Institute has a reputation of being an organization in which enlightened developers get together with the occasional savvy planner and designer. So with a real estate downturn in full swing, it's not surprising that the main topic at ULI's Fall Meeting in San Francisco last week was ... planning, not development. In particular, the topic seemed to be how developers can participate in the planning game – or, at the very least, work for the government during the downturn. For example, one panel of dealmaking experts focused exclusively on how to become a development advisor to local governments until the market turns again. "Developers understand the value of time and money," said Frank Baltz, of Maryland-based Edgemoor Real Estate Services. Governments don't understand the value of either, he added, but savvy government folks do understand that they can build necessary public projects at a low cost during an economic downturn. It's also possible to use a variety of government financing techniques to drive down the cost of development during a downturn. David Madway, an experienced real estate development lawyer with Sheppard Mullin in San Francisco, pointed to the possibility of combining tax-increment financing and Mello-Roos bonds. The trick, he said, is simply to use the tax increment revenue to make the bond payments – essentially, using tax revenue to pay off tax-exempt bonds. Madway noted that this technique can take advantage of California's little-used "infrastructure finance district" law, which essentially permits creation of a tax increment financing district without going through the blight finding required by redevelopment law. Perhaps the best lesson for underemployed developers at ULI was simply the example of savvy folks who've made their way back to the public sector during the downturn. The best example I ran into was provided by Dan Rosenfeld, who was a fellow panelist in a session about Los Angeles transit. Rosenfeld has had more lives than a cat. A longtime developer, he spent the last real estate downturn safely nestled in the public sector, managing real estate assets for the State of California and the City of Los Angeles. When the market boomed, he jumped to Urban Partners in Los Angeles, working on a lot of large urban development projects. And so where's Rosenfeld now? He's working for L.A. County Supervisor Mark Ridley-Thomas, who's the swing vote on the Metropolitan Transportation Authority board. After all, Metro's got $30 billion to spend on transit construction that will, inevitably, stimulate the next round of transit-oriented development in L.A. And good developers are smart enough to go where the money is. – Bill Fulton

Will California get past stalemate on development-related environmental issues before the world as we know it ends? Sorry about the apocalyptic reference, but it is common these days in discussions about global warming – and with good reason. If predictions about the impact of global warming are even half right, a lot of us are going to be quite literally swimming – or at least wading – through our daily lives in 30 or 40 years. Yet in the current debate about how the state should approach "adaptation" strategies, all parties are crouched in their typical postures. The state has released a sweeping game plan that's ambitious but not very specific. The enviros are complaining that it doesn't go far enough. The developers are complaining – in terms almost as apocalyptic as global warming activists use – that the plan overreaches and serves as just another excuse for land use activists to promote their agenda. And the planners (serving, apparently, as a proxy for the silent local government groups) are complaining that the state isn't going to provide any money. I suppose it's inevitable that, in tough times when a new issue arises, the interest groups retreat to their typical party lines. But you'd think we're past this in California. The state has had 40 years of political jockeying over development and environmental issues. Things are not perfect, especially now, but in general there has been a pretty compelling balance of innovative environmental protection and innovative urban development. So it's too bad we're back at square one on adaptation. The current ruckus began a year ago, when Gov. Arnold Schwarzenegger signed an executive order instructing the Natural Resources Agency – in combination with several other state agencies – to draft a game plan for climate change adaptation. As I wrote in a blog from the state planning conference a few weeks ago, adaptation gets very little play – even among planners – compared with greenhouse gas emissions reduction efforts. This is too bad. The threat is very real; even a minor increase in the sea level would inundate dozens, if not hundreds, of crucial roads and sewer plants, to say nothing of schools, stores, and houses. From the point of view of planners, adaptation is something that will have to happen, and communities across the state face some pretty fundamental choices (hard versus soft infrastructure, for example) in going about it. The draft California Climate Change Adaptation Strategy (see CP&DR In Brief , August 15, 2009 ) has succeeded in focusing the attention of Sacramento insiders – if not planners and developers across the state – on these hard choices. In some ways, this 161-page document is very deft. It devotes a lot of time and attention to making the case about why adaptation is important and what some of the sea level rise scenarios might be. And the proposed strategy itself, while ambitious, is fairly general – and this is probably deliberate. On the potentially explosive topic of land use, for example, the strategy's main recommendation reads like this: Consider project alternatives that avoid significant new development in areas that cannot be adequately protected (planning, permitting, development, and building) from flooding due to climate change. The most risk-averse approach for minimizing the adverse effects of sea level rise and storm activities is to carefully consider new development within areas vulnerable to inundation. State agencies should generally not plan, develop, or build any new significant structure in a place where that structure will require significant protection from sea level rise, storm surges, or coastal erosion during the expected life of the structure. However, vulnerable shoreline areas containing existing and proposed development that have regionally significant economic, cultural, or social value may have to be protected, and infill development in these areas should be accommodated. State agencies should incorporate this policy into their decisions, and other levels of government are also encouraged to do so. The recommendation says nothing about what local governments should do, and it provides very general guidance for state agencies, which are exempt from local government planning regulations. It's not nearly as specific as some of the other recommendations, such as the one that sets a target for a 20% reduction in water use by 2020. It's also, in many ways, a mere restatement of many other existing state policies. Careful, cautious, general, and redundant – and therefore the perfect target from all sides. It is predictable, of course, that the environmentalists – represented most aggressively, in this case, by the sharp-elbowed but skilled and effective Center for Biological Diversity – would say the strategy doesn't go far enough. The Center's 13-page comment letter says the recommendations are "too general to be meaningfully analyzed by the public and largely lack commitments or directives for action by the relevant state agencies to implement the actions." (All the comment letters can be found here .) Typically, the Center does not focus directly on land use and urban development but, rather, on protecting and restoring ecosystems and habitats. Among its goals is to restore degraded wetlands that might otherwise be available for urban development as a means of providing "resiliency" – meaning, in this case, ensuring that wetlands are resilient enough to absorb and purify a lot of the water that is draining into newly risen estuaries and rivers. Even more interesting is the equally long comment letter from a coalition of business and development groups, including the California Chamber of Commerce, the California Building Industry Association, the California Manufacturers & Technology Association, the California Business Properties Association, and the American Council of Engineering Companies, California. Whereas the enviros criticized the strategy for being too general, the business/developer coalition criticizes it for being too ambitious – and uses biting words in many cases. Not surprisingly, some of the sharpest words are aimed at the land use recommendation reprinted in its entirety above. The business/developer coalition's letter calls the recommendation "redundant, hyperbolic and nonsensical." The letter goes on to say: "The state shouldn't be determining where building should occur or where it should not." Instead of new guidance from the Natural Resources Agency on adaptation, the business/developer coalition suggests relying on existing state and federal laws relating to the flood risk, which already tell local jurisdictions "what can be built and how it should be built in areas that are at some flood risk – regardless of the source of the risk." Secondly, the business/developer coalition says that new guidance is not necessary because this kind of analysis already gets done through the California Environmental Quality Act (CEQA). Ah, CEQA. In keeping with the theme of this column – nothing new under the sun – it's pretty obvious that in the end this will come down to a CEQA fight. The business/developer coalition points out that CEQA "already provides the appropriate framework for disclosing the full range of climate change-related impacts for which reliable scientific evidence is available, and a mechanism for mitigating them as feasible." In theory, this is true. Any CEQA analysis could look at the possibility of future inundation and suggest mitigation measures, including moving the project to another location. But local agencies have been very skittish and uncertain about how to deal with climate change in CEQA documents, and they're banking on the state to tell them how to handle climate change in the pending CEQA Guidelines changes, authorized by SB 97 and now out for public review. However, the SB 97 guidelines changes don't say anything about sea level rise and adaptation. The guidelines deal exclusively with reducing greenhouse gas emissions. So, for now, the whole issue of adaptation has boiled down to a typical fight over how to use CEQA. Not suprising, but pretty disheartening. Keep your life vests nearby.

( Scene opens on a middle-aged man, gray at temples, carefully trimmed mustache, sunken eyes, dressed in a very expensive woven leisure suit that looks made for him. He wears a diamond pendant that sparkles conspicuously from time to time . He speaks quickly in a husky, low voice, if not as low as the one he's trying to use. ) Hello yourself. So you recognized me. Congratulations. Sure I'll shake your hand. You can call me N.U. Because I'm a mythical composite who bears no resemblance to any person, living or dead, that's why, kid. Edgy? Sorry, nothing personal, just a little nervous. Whaddaya mean, what about? Are you crazy? I'm worried sick about the master plan for Universal City. You know, that 391-acre piece of heaven that towers over the Hollywood Freeway at that bend in the road where people driving out of Hollywood take a westward turn for the San Fernando Valley. ( Pause. ) Well, Sugar Mountain has been good to NBC Universal. But the hill has one last flake of gold to be panned, and that's real estate development. By God, we mean to cover every piece of Mount Universal that remains to be built upon. It's as if old Carl Laemmle, bless his soul, were looking down at us from heaven and giving us one last windfall from the former cow pasture that the old man bought as a back lot way back in the Twenties. Talk about before and after, like, wow! The hill is already an entertainment compound, with a concert amphitheater, a flagship multiplex, the City Walk shopping street and the tour. ( Pause. ) Look, we've been working on this master plan for years, talking to the neighbors, the stakeholders, the bordering cities. I'm hopeful that Caltrans will get on board, too. We've got a lot riding on this project, about $3 billion when it's all done. It's a mother of a master plan, with millions of square feet of new construction – studio buildings, entertainment buildings and a large residential neighborhood. ( Pause. ) Lucky for us, we've got a pretty lenient planning department to deal with, because Universal City is an island of unincorporated Los Angeles County. No way L.A. or Burbank would let us to build this intensely! When we're done, this hillside will look like Shenzhen or some other boomtown in China. Just totally covered. And why not? The mountain's an asset, right? And it's our mountain. ( Pause. ) Like I said, we're especially proud of the housing layout prepared by architect Bob Hale, a managing principal in Rios Clemente Hale of L.A. This is dense, big-city stuff: The housing ranges from three stories to 19 stories on 124 acres of terraced hillside . We're going to build 2,900 units – conventional apartments, lofts, condos. Most residential buildings will be mid-rise, four to seven stories. We'll put the 19-story buildings down the hill, to spare "view corridors." The scheme's still preliminary, but Hale has created a comfortable, walkable, dense residential neighborhood. Hale struck a balance between a straightforward urban street and the quasi-suburban image that we can sell to our neighbors. Plus, we're providing 35 acres of parks, open spaces and trails. Everyone loves trails. They're the new golf courses, but a lot cheaper to build. So look at what we're doing: We're creating new housing for 8,000 people, we're transit oriented and we've got a great shot at achieving the jobs-housing balance. What's not to like? If only that mental case from – what's it called? California Planting & Redistribution of Wealth Report? – would pipe down. The moron thinks he can tell us what to do. What, you know him, too? ( Pause. ) We're good guys, good neighbors. We're aware of the traffic impacts, and we've come to the table with checkbook in hand. That's right, we're willing to pay $100 million, and maybe help raise another $100 mil, to pay for some really amazing traffic mitigations: That's right, we're going to add a lane to the Hollywood Freeway for a five-mile stretch that separates NBC-Universal on the north from the Hollywood Bowl on the south. Plus new entrances and exits along the same freeway. Pretty impressive, huh? And Caltrans? They love it. We've got the money, they've got the payroll. Everybody wins. If Hollywood knows how to do one thing, it's put a deal together. Then that guy – you know the one – has to start shooting off his mouth. ( He imitates an annoying person with a whiny, affected way of speaking. ) "I mean, why do you want to spend $200 million on widening the Hollywood Freeway, when that corridor is already served by Metrorail? You are not going to address the traffic problems simply by adding new freeway lanes. Plus, you are creating an incentive for people to drive, rather than use the train! This kind of stupidity would be possible only in California, where transportation is divided between two rival agencies, Caltrans and the Los Angeles County Metropolitan Transportation Authority, each of which has its own idea about how to accomplish regional transit goals. Really, you'd be better off contributing $200 million toward a connection between the MetroLink station at Bob Hope Airport in Burbank, which is three or four miles north, through Universal to the Red Line. Everyone in downtown, in Hollywood and at Universal could hop on a train to get to the airport." ( Pause. ) Mass transit in L.A.? Spare me! I've got the makings of a deal with Caltrans. He's crapping on our EIR and messing up billions of dollars of real estate. I tried to play nice with that guy. Nothing can make him happy. This is our mountain. He can do what he wants on his mountain. By the way, kid, what's your name again?

The Ninth U.S. Circuit Court of Appeals has given new life to a lawsuit alleging that the City of Modesto and Stanislaus County discriminated against four predominately Latino communities. In overturning a two-year-old ruling by a federal District Court judge, the Ninth Circuit said there is sufficient evidence for the lower court to consider whether the city's and county's annexation policies and provision of emergency services violate residents' constitutional and statutory rights. The appellate panel did, however, uphold rulings that excluded sewer service and other infrastructure from the suit's discriminatory claims. The decision appears to mean that cities and counties that have communities with substandard infrastructure and poor public services – as well as local agency formation commissions (LAFCOs) that help make annexation decisions – need to consider social justice issues when drawing boundary lines. The ruling also has the potential to buttress two bills in the Legislature that would add social justice concerns to annexation policies and general plans. Stanislaus County and Modesto maintain they have done nothing wrong. Terrence Cassidy, an attorney for the county, told the Los Angeles Daily Journal , "When the county gets the opportunity to present all the evidence, it will establish it did not discriminate in any … fashion." Two Latino community groups and 12 residents sued Modesto, the county and the sheriff in 2004. They amended their complaints in 2005. Here's the background. The plaintiffs live in and represent the Bret Harte, Hatch-Midway, Robertson Road and Rouse-Colorado neighborhoods, which are unincorporated islands surrounded, or nearly surrounded, by incorporated Modesto territory. All four neighborhoods were developed during the 1940s and 1950s. Hatch-Midway and Rouse-Colorado lack sewers, while a sewer system has been approved for Robertson Road. All four lack sidewalks, curbs, gutters, storm drains and street lights. Since 2000, Latinos have been in the majority in all four neighborhoods. In 1983, Modesto and Stanislaus County signed a master tax sharing agreement (MTSA) that ensures the county would continue to receive two-thirds of the property-tax revenues in an area annexed by the city. The agreement specifically excluded Bret Harte and Robertson Road. In 1988, residents of Bret Harte applied for annexation to Modesto, but the bid failed because the city and county could not agree on how to divide up the area's property tax revenues. A 1996 amendment excluded Hatch-Midway from the revenue sharing agreement. A 2004 amendment added a portion of Bret Harte to the agreement. A need for sewer service often drives annexation bids. Thirty years ago, Modesto voters approved a ballot measure prohibiting sewer extensions without an advisory vote. In 1995, they passed Measure M, which requires an advisory election before any sewer improvements could be made in unincorporated areas. (There were five advisory votes in the November 3 election.) The Modesto City Council approved procedures for implementing Measure M in 1998. They prohibit Measure M votes for extending sewer services to "substantial" islands – a term left undefined – unless the county first agrees to install other infrastructure. The plaintiffs contended that the city's policies and the revenue sharing agreement are discriminatory and violate the Fourteenth Amendment's equal protection clause, the Fair Housing Act and state laws. District Court Judge Lawrence O'Neill issued summary judgment for the city, citing insufficient evidence from the plaintiffs. The Ninth Circuit, however, found substantial evidence to support some of the discrimination claims. For example, the plaintiffs contended that the islands excluded from the revenue sharing agreement – an essential tool for annexation – were 71% Latino, according to the 2000 Census, while those included in the tax pact were 48% Latino. In addition, they pointed out that Modesto refused to include Bret Harte when it annexed neighboring Fairview Village in 1996, even though LAFCO recommended that all the territory become part of the city. The court held that the plaintiffs should be allowed to present this information to the District Court. " reasonable fact-finder could conclude that exclusion from the MTSA is indeed a barrier to annexation that neighborhoods covered by the MTSA do not face," wrote Judge Louis Pollak, a District Court judge from Philadelphia sitting by assignment to the Ninth Circuit. "Given the context of the 2004 reenactment, the trend of neighborhoods to become more heavily Latino over time, the 1988 unsuccessful Bret Hart application, and the example of the Fairview Village annexation, we conclude that plaintiffs have presented evidence of discriminatory impact." Arguments over the provision of law enforcement and emergency services to the four neighborhoods centered on response times. Over a two-and-a-half year period that ended in August 2004, the average response time of the sheriff's office to the plaintiffs' neighborhoods was 13.4 minutes, compared to 12.5 minutes for majority white communities. O'Neill had ruled that the time difference was not "meaningful." Writing for the Ninth Circuit, Pollak said the court "cannot agree that, as a matter of law, a difference of one minute can be characterized as not making a ‘meaningful difference' when one is waiting at one's home for law enforcement or emergency personnel to arrive, particularly in the absence of any explanation for why the time difference exists." He went on to write, "A fact-finder should decide if the difference is material and if so if the difference is explainable on grounds other than the ethnicity of the population of those neighborhoods." The plaintiffs did not fare as well with respect to their claims about sewer service, Measure M and new infrastructure. The appellate court noted that Modesto had extended sewer service to only three of 26 unincorporated islands, and all three have large Latino majorities. As for such infrastructure as storm drains and sidewalks, the court found that the county has many needs and limited funding, and there was no evidence of discriminatory intent in the county's allocation of resources. Victor Rubin, vice president of research for the social justice organization Policy Link, said the case demonstrates the need for government agencies to address fiscal issues that block annexation drives. It's not acceptable for government agencies to give up because of difficult fiscal negotiations, he said. "It's another example of how we end up with an absence of infrastructure, and infrastructure planning, because of the fiscalization of land use," Rubin said. The Modesto neighborhoods involved in the lawsuit are not unusual in the Central Valley, he added. The two measures pending in the Legislature are AB 853 (Arambula) and SB 194 (Florez). The former would require counties to initiate annexation proceedings for islands that qualify as "disadvantaged communities" if 25% of landowners, or registered voters, sign a petition supporting the annexation. The latter measure would require cities and counties to identify disadvantaged islands and fringe communities in their general plans and analyze the feasibility of annexing the communities. Lawmakers could consider both bills after the first of the year. Cities and counties are skeptical, while Policy Link, California Rural Legal Assistance and other social justice advocates support the measures. In an analysis, Colantuono & Levin attorney Yvette Abich Garcia wrote, "Whether or not these bills move forward, the Modesto suit suggests LAFCOs, cities and counties with underserved county areas should consider whether and how to address the social concerns expressed by this litigation and legislation." The Case: The Committee Concerning Community Improvement v. City of Modesto , No. 07-16715, 2009 DJDAR 14628. Filed October 8, 2009. The Lawyers: For the committee: Brian Brosnahan, Kasowitz, Benson, Torres & Friedman, (415) 421-6140. For the city: John McDermott, Howrey LLP, (213) 892-1800. For Stanislaus County: Terrence Cassidy, Porter Scott, (916) 929-1481.

A city may consider aesthetics in regulating the construction of telecommunications antennas, the Ninth U.S. Circuit Court of Appeals has ruled. The ruling is the latest in a series of court decisions upholding the authority of local government to decide where wireless antennas are located. And it is one of the most explicit: "California law does not prohibit local governments from taking into account aesthetic considerations in deciding whether to permit the development of WCFs within their jurisdiction," said the court. In 2002 and 2003, Sprint PCS applied to the City of Palos Verdes Estates for permits to construct 10 cell phone towers in public rights-of-way. The city approved eight. It rejected one proposed antenna because it would disrupt the residential ambiance and another because it would detract from the natural beauty of a city entrance. Sprint sued, arguing that the denials violated the federal Telecommunications Act of 1996. District Court Judge Alicemarie Stotler ruled in favor of Sprint, but a unanimous three-judge panel of the Ninth Circuit overturned the decision. As the Ninth Circuit explained, the Telecommunications Act attempts both to "encourage the rapid deployment of new telecommunications technologies," and "to preserve the authority of state and local governments over zoning and land use matters." Under the act, a local government may deny a request to construct a wireless antenna tower if authorized by local law and supported by a reasonable amount of evidence. Stotler had concluded that the city's consideration of aesthetics was not permitted under the state Public Utilities Code (PUC). The Ninth Circuit said that the statutes in question – Public Utilities Code §§ 7901 and 7901.1 – do not eliminate local governments' constitutional authority to regulate local aesthetics. "Thus," Judge Kim McLane Wardlaw wrote for the appellate court, "the threshold issue is not, as Sprint argues and the District Court apparently believed, whether the PUC authorizes the city to consider aesthetics in deciding to grant a WCF permit application, but is instead whether the PUC divests the city of its constitutional power to do so. Therefore, the question actually before us is whether the city's consideration of aesthetics is ‘in conflict with general laws.'" After framing the issue in a way favorable to the city, the court examined the statutes. Under § 7901, a company may construct facilities "in such a manner and at such points as not to incommode the public use of the road or highway." The court cited dictionary definitions of "incommode" that include "trouble, annoy, molest, embarrass, inconvenience." "The experience of traveling along a picturesque street," Wardlaw wrote, "is different from the experience of traveling through the shadows of a WCF, and we see nothing exceptional in the city's determination that the former is less discomforting, less troubling, less annoying and less distressing than the latter." Wardlaw continued, " he ‘public use' of the rights-of-way is not limited to travel. It is a widely accepted principle of urban planning that streets may be employed to serve important social, expressive and aesthetic functions. … These urban planning principles are applied in the city, where the public rights-of-way are the visual fabric from which neighborhoods are made." As for Section 7901.1, the court noted that the statute permits municipalities to control the "time, place and manner" in which rights-of-way are accessed. Aesthetic regulations are time, place and manner regulations. So the question turned on whether the city had relevant evidence to support its decisions. The court said the city did, citing maps, mock-ups, a staff report on aesthetic values, public comments and a presentation from Sprint. Sprint pointed to provisions of the Telecommunications Act that prohibit regulation from creating a "significant gap" in wireless service. The District Court judge had found such a significant gap. But the Ninth Circuit noted that Sprint has 4,000 customers in Palos Verdes Estates and that a city "drive test" determined Sprint's network was functional. In rejecting the argument that the federal supremacy clause preempted the city's ordinance, the court alluded to the decision in Sprint Telephony PCS, L.P. v. County of San Diego , 543 F 3d 571 (9th Circuit 2008). In that case, the court held that a company must prove that local regulation actually prevents telecommunications services (see CP&DR Legal Digest , October 2008 ). The Case: Sprint PCS Assets LLC v. City of Palos Verdes Estates , No. 05-56106, 2009 DJDAR 14841. Filed October 14, 2009. The Lawyers: For Sprint: John J. Flynn III, Nossaman, (949) 833-7800. For the city: Scott Grossberg, Cihigoyenetche, Grossberg & Clouse, (909) 483-1850.

The Ninth U.S. Circuit Court of Appeals continues to crack open the door to property owners seeking compensation for what they claim is a government taking. In its most recent decision, the court ruled that the owner of a rent-controlled mobile home park in Capitola should have its day in federal District Court. This despite the fact that the U.S. District Court and two state courts ruled that a state court decision against the property owner should have settled the matter. The Ninth Circuit did not rule on the merits of the claims, which allege that the city's rent-control ordinance constitutes an illegal taking of private property. The appellate panel instead decided that the District Court must weigh the claims rather than rely on state court rulings against the mobile home park owner. The ruling follows a Ninth Circuit panel decision in September that held the City of Goleta's mobile home rent-control ordinance was a taking on its face and the mobile home park owner is due compensation (see CP&DR Legal Digest , October 15, 2009 ). The same judge who wrote the majority opinion in the Goleta case, Jay Bybee – best known as the author of a memorandum while he was a member of the Bush administration that narrowly construed the definition of "torture" – also penned the decision in the Capitola case. The Capitola litigation is eight years old. In 2000, the owners of the 108-space Castle Mobile Estates, who had been pressuring tenants either to sign long-term leases that would override rent-control protections or buy the park outright for upward of $10 million, requested that the city approve a monthly rental increase of 150% – or $300 – for each space. The city's 1979 rent-control ordinance limits increases to a percentage of the increase in the consumer price index and the park owners' capital and operating expenses. The city ultimately approved an increase of about $15 a month. Los Altos El Granada Investors, as the park owners are called, filed multiple suits in federal court over the course of three years, as well as a suit in Santa Cruz County Superior Court. Essentially, all the suits contended that Capitola's ordinance on its face and in its application to Castle Mobile Estates constituted an illegal taking, for which the property owners demanded payment. The owners took the state court route largely because the U.S. Supreme Court's Williamson County decision requires property owners to seek compensation for alleged takings in state court before moving to the federal level. But they also asserted an " England reservation" – a legal construct in which a plaintiff reserves the right to try questions of federal law in federal court. Specifically, Los Altos El Granada wanted to present its takings, due process and equal protection claims under the Fifth and Fourteenth Amendments to a federal court. The park owners lost twice in Superior Court before winning a minor reversal in state appellate court (see CP&DR Legal Digest , July 2006 ). The state court litigation concluded in December 2006 with a Superior Court rejecting all owner's claims. Importantly for the federal case at hand, both the Superior Court and the state's Sixth District Court of Appeal denied the property owners' England reservation. While the state court litigation was pending, federal District Court Judge Jeremy Fogel took no action on the federal lawsuit. When the state litigation played out, Fogel reviewed the case and concluded that the state court's "adjudication of California takings claims is equivalent to the adjudication of their federal counterparts, and the doctrine of issue preclusion also bars the re-litigation of those claims as federal claims." As such, Fogel declined to consider the merits of the claims. He also gave "preclusive" effect to the Superior Court's rejection of the England reservation because the property owners did not appeal. Los Altos El Grenada Investors then appealed to the Ninth Circuit, which overturned Fogel. The Ninth Circuit explained that the point of the England reservation is to ensure that plaintiffs who are compelled by law to litigate in state court should still get a hearing in federal court. Besides, it is not up to state courts to decide who may exercise an England reservation, the Ninth Circuit said. " he Superior Court's action in striking the explicit England reservation by itself preserves to us the jurisdiction to hear Los Altos's federal claims," Bybee added. "The state courts were aware from the outset that Los Altos intended to return to federal court," Bybee wrote. The notice provided by the property owner, whether provided in a complaint or given orally to the court, "is all England requires." The court sent the case back to District Court to reconsider its ruling that the state court decisions precluded the federal court from considering the merits of the property owners' arguments. The Case: Los Altos El Granada Investors v. City of Capitola , No. 07-16888, 2009 DJDAR 14584. Filed October 7, 2009. The Lawyers: For Los Altos: Mark Alpert, Hart, King & Coldren, (714) 432-8700. For the city: Henry Heater, Endeman, Lincoln, Turek & Heater, (619) 544-0123.

The Natural Resources Agency has altered proposed amendments to the California Environmental Quality Act Guidelines. The changes appear to shift the focus of environmental analysis away from a project's effects on automobile traffic and toward impact on the overall transportation system. The amendments are scheduled to take effect January 1, 2010. Under legislation approved in 2007, the amendments are supposed to address greenhouse gas emissions (see CP&DR Environment Watch , May 2009 ). However, experts who commented on the draft amendments said that the continued reliance on traffic level of service (LOS) standards would only maintain an emphasis on automobile travel, even though less automobile travel is necessary to reduce greenhouse gas emissions. This is because a high LOS requires roads, highways and intersections that can carry automobiles without undue delay. In response, the agency changed Appendix G of the guidelines to give lead agencies more discretion in choosing methodologies to examine the transportation related effects of projects. The notice of proposed changes states, "The proposed revisions would refocus the question from the capacity of the circulation system to the performance of the circulation system as indicated in an applicable plan or ordinance. The proposed revisions also clarify and update language regarding safety considerations and other mass transit and non-motorized transportation issues." In addition, the Natural Resources Agency deleted a question dealing with adequate parking capacity from the Appendix G checklist. Transit-oriented developments often run into CEQA difficulty because they provide a limited amount of parking, which is then considered a significant effect that must be mitigated. The agency made other changes intended to clarify that greenhouse gas emissions are best analyzed as a cumulative impact. The public comment period on the changes ends November 10. The entire CEQA Guidelines package is available at http://ceres.ca.gov/ceqa/guidelines .