An appellate court has ruled against homeowners who sought to prevent Santa Monica City Council members from making inquiries of staff members other than the city manager. "An injunction to prevent such communication violates the First Amendment. The First Amendment protects everyone, even politicians," Justice Arthur Gilbert wrote for the unanimous three-judge panel of the Second District, Division Six. The lawsuit stemmed from a resident’s complaint about a neighbor’s playhouse. David and Beth Levy built a 13-foot-tall, 100-square-foot playhouse for their four-year-old son. After neighbor Tunde Garai complained about the playhouse, a city building inspector told the Levys to remodel the structure and locate it at least five feet from the rear lot line. The Levy’s reworked the playhouse, and a different building inspector then told them the structure complied with city regulations. Garai continued to complain to the building department and to then-Mayor Ken Genser (now a councilman). In March 2000, Genser sent an email to Community Development Director Suzanne Frick asking her to investigate Garai’s complaint. Three weeks later, Genser sent Frick another email, checking on the status of Garai’s complaint and suggesting that a 15-foot setback — not a 5-foot setback — was required. The Santa Monica City Charter states: "Except for the purpose of inquiry, the City Council and its members shall deal with the administrative service under the city manager solely through the city manager and neither the City Council nor any member shall give orders to any subordinates of the city manager, either publicly or privately." Frick testified that she treated Genser’s emails as citizen complaints, not orders. In August 2000, the first building inspector sent the Levys a "notice of violation" and directed them to remove the playhouse or move it 15 feet from the property line. On advice of the city attorney, the city apparently dropped the enforcement action, but the Levys sued the city and Genser anyway. They sought a declaratory judgment that the playhouse was a conforming structure, a permanent injunction to preclude city council members from engaging in acts designed to influence administrative staff members, and damages for violation of their due process rights. The city countered that the Levys’ suit was a strategic lawsuit against public participation (SLAPP) that sought to chill a person’s right to petition and free speech. The city further argued that most of the Levys’ contentions were moot because the city rescinded the notice of violation. Los Angeles County Superior Court Judge Cesar Sarmiento ruled the lawsuit was not a SLAPP and, besides, the Levys had demonstrated a "probability of success." The city appealed that ruling, and the Second District overturned the lower court. The appellate panel determined that the Levys’ lawsuit was, indeed, a SLAPP. "Garai’s act of contacting her representative and Genser’s act of contacting planning staff are petitions for grievances against the government protected by the First Amendment," Justice Gilbert wrote. The injunction sought by the Levys would be "an overly broad restraint on speech which would inhibit constitutionally protected activity," the court ruled. "Under the First Amendment, legislators are ‘given the widest latitude to express their views’ and there are no ‘stricter free speech standards on than on the general public,’" Gilbert wrote, citing , (1979) 89 Cal.App.3d 76, 80. The city charter "defines the lines of authority within city government," but it does not prohibit protected speech, the court held. The appellate court further ruled that the Levys’ arguments about the status of the playhouse and due process violations were moot because the city had rescinded the enforcement action. The Case: , No. 15758, 04 C.D.O.S. 452, 2004 DJDAR 588. Filed January 20, 2004. The Lawyers: For Levy: Christopher Harding, Harding, Larmore, Kutcher & Kozal, (310) 451-2968. For the city: Cara Silver, deputy city attorney, (310) 458-8336.

Land use in our society is generally an "either-or" proposition. Any given site is zoned for industry or housing or open space, but rarely more than one use at a time. And we compartmentalize one land use from another by drawing thick black lines on our land-use maps, often in a completely arbitrary way. That thick black line has grown a little thinner on 471 acres of land, nearly half of which lie underwater, owned by Dow Chemical in the city of Pittsburg. In this waterfront spot of Contra Costa County, Dow undertook the creation of a nature preserve with several types of habitat, including 170 acres of tidal wetlands, on land that previously had been used as an illegal dumping site. Nowadays, the Dow preserve is not only a functional wildlife habitat, but it is also an outdoor classroom for middle and high school students who arrive by the busload to pull weeds and plant oak acorns. The general public is even allowed access to the site on certain days, which has effectively changed the former dump into public open space. The cost of this large-scale remediation project: a lot of time and sweat, but almost no cash. Dow bought the land in 1989 to serve as a buffer between the community and Dow’s Pittsburg plant, which makes pesticides and anti-bacterial agents. The buffer had been farmland that flooded in 1989, after a barge breached a levy, and saltwater from the Delta. For several years, Pittsburg officials had contemplated a housing and retail complex on the site. After Dow bought the site, however, the corporation joined the Wildlife Habitat Council, a non-profit group in Baltimore, Maryland, that encourages the restoration of habitat on corporate lands. Through the council’s Corporate Lands for Learning program, the council has "certified" nearly 400 corporate efforts to restore degraded lands. Among the first people to get involved were about 30 Dow employees and ex-employees who volunteered their time and labor to remove garbage from the site. Another early volunteer was Steve Andrews, coordinator of the University of California, Berkeley, Environmental Teaching Program, which has an outreach program to educate school children on the local level. Dow itself contributed about $10,000 in incidental costs. Andrews described the "core" group of Dow volunteers "as a bunch of "high-powered folks," some current employees and others Dow retirees who lent their efforts and what he called their "Type-A personalities" to the project. "They are out there every Friday, some 80 years old, working this ground, putting in acorns, laying PVC pipe (for irrigation), pulling weeds, planting oak trees and pine trees and wildflowers," Andrews said. One of the first steps was to remove 13 car bodies that lay abandoned in the marshy meadows. One of the most difficult on-going problems is the removal of invasive plants, particularly the water hyacinth, which tends to cover and choke off waterways, as well as attract heavy metals, particularly mercury. When Andrews and the Dow volunteers first arrived, the hyacinths were overgrown and flourishing. Some plants stood five feet tall. The removal method requires attaching a shredding mechanism to a boat, and feeding the offending plants into the metal teeth of the shredder. Dow’s Pittsburg property has turned out to be a rich site for first-hand environmental studies, according to Andrews, because the meadows contain several distinct communities — tidal marsh, riparian fringe, bunch-grass savannah and upland habitat — and the transitional areas between them. "You should see how much the plant life has changed here in the past five years," he said. About 200 animal species live in the site, including coyote, beaver, fox, raccoon and skunk. As an educator, Andrews sees great value in what he calls the "trans-generational" nature of teaching students about wildlife habitats on the Dow property, because the students have direct contact with Dow retirees who are devoting much of their time to restoring the land. Andrews said, "It gives these kids an important message, that ‘I need to be caring, I need to be more actively involved in the land and the way it is being managed.’" What’s in the deal for Dow? Essentially, good public relations. The dedication of property for a wetlands preserve reflects the priority that Dow gives to education and environmental repair, said spokeswoman Sheryl Sturgis. School children are not the only ones who can learn from the Dow preserve. Planners, corporations and the tenants of business parks could all examine their attitudes. While few companies have 500 acres of fallow land lying around, many industrial and office parks have plentiful acreage of expansion space that could have habitat value. Rather than limiting the open space components of a business park to unbuildable hillsides or waterways, we could seek to integrate habitat and open space more intimately into commercial campuses. One possible approach is to restrict landscaping choices to native species and plan the corporate development around habitat trails, so that an entire business park could have some habitat value in the aggregate. Granted, this is a very large subject, but projects like the Dow preserve suggest that a more inclusive approach between commercial-industrial development and habitat restoration is feasible, and worth thinking about in a state that has destroyed much of its natural habitat within the last century and a half. Land can do more than one thing at a time. It can support both business and habitat. Maybe the time is approaching to rethink the notion of single-use planning.

Anyone familiar with the operation of state and federal water projects in California recognizes that the Sacramento-San Joaquin River Delta is the heart of the state's elaborate plumbing system. A recent federal court decision also places the Delta squarely at the heart of an intensifying debate over one of the nation's bedrock environmental laws, potentially throwing into question the protections afforded a host of threatened and endangered species throughout the water-short West. On the last day of 2003, Judge John Paul Wiese of the U.S. Court of Federal Claims in Washington, D.C., ordered the federal government to pay nearly $14 million, plus a decade's worth of accrued interest (which could bring the total to as much as $26 million), to five San Joaquin Valley water districts. The damage award stems from a case originally decided April 30, 2001, when Wiese ruled that the reduction of deliveries to State Water Project (SWP) contractors, a consequence of efforts to comply with Endangered Species Act (ESA) protections for Sacramento River winter-run chinook salmon and the delta smelt, constituted a taking of private property under the Fifth Amendment to the U.S. Constitution. The ruling, the first of its kind, was denounced by environmentalists, who regard it as a threat to enforcement of legal protections for threatened and endangered species. The purpose of such suits is "to bust the federal budget as the price tag for complying with environmental protection laws," Barry Nelson, a policy analyst with the Natural Resources Defense Council, told the Associated Press. The ruling won equally vocal praise from property-rights activists and ESA critics, who have long argued that private landowners and businesses bear a disproportionate share of the cost of such protections. "What the court found is that the government is certainly free to protect the fish under the Endangered Species Act but must pay for the water that it takes to do so," Roger Marzulla, the plaintiffs' attorney, told AP. If Wiese's ruling is allowed to stand (there's been no decision yet whether the federal government will appeal), it will have significant implications throughout California and the West, where competition over limited water supplies is intensifying. California's delta is the current legal epicenter, but the vibrations from may soon be felt anywhere that farmers and urban agencies have been forced to give up water to protect fish and wildlife. Marzulla, in fact, has filed a nearly identical suit in the Court of Federal Claims on behalf of farmers in the Klamath Basin, on the California-Oregon border, seeking $1 billion in compensation for a "taking" of water to protect endangered fish in the summer of 2001. The Delta case grew out of efforts to protect salmon during 1992 and both salmon and smelt during 1994. Both species live in the Delta, the smelt residing there for their entire life cycle and the chinooks passing through as juveniles on their way to the sea. The Delta is also the location of the main pumping plants for the SWP, operated by the California Department of Water Resources (DWR), and the Central Valley Project (CVP), operated by the U.S. Bureau of Reclamation. Biologists have long implicated the CVP and SWP pumping plants in the demise of fish. Salmon fry and smelt may be sucked into the pump intakes and dumped into aqueducts, or become so confused by the effect of water diversions on river flows and delta salinity that they lose their way and cannot complete their migrations. As a result of these and other factors, the winter-run chinook has been listed as endangered since 1990, and the smelt has been listed as threatened since 1993. In 1992, the National Marine Fisheries Service, which has jurisdiction over anadromous species such as salmon (which spend their lives in both fresh and salt water), issued a biological opinion asserting that a change in SWP and CVP operations was necessary under the ESA to protect the winter-run salmon during their migration. The suggested alternative was to close the gates on the Delta Cross Channel, a structure that allows Sacramento River water to be diverted into the south Delta. Closing the gates would allowing the vulnerable young fish to proceed unmolested into San Francisco Bay and the ocean instead of being shunted south toward the deadly pumps. Closing those gates, however, meant the CVP and SWP would have to curtail their diversions from the south Delta, because continuing to pump in the absence of an inflow from the Sacramento River would cause south Delta salinity to rise higher than allowed under permits issued by the State Water Resources Control Board. Accordingly, the CVP and SWP pumps shut down, interrupting deliveries to project contractors for part of 1992. The same thing happened two years later. The Tulare Lake Basin Water Storage District and the Kern County Water Agency, both of which have direct contracts with DWR for SWP water, and three entities that get SWP water through Tulare Lake and Kern County — Hansen Ranches, Lost Hills Water District and Wheeler Ridge-Maricopa Water Supply District — filed a claim seeking compensation for the SWP water they were denied. That the water districts sued the federal government over a state agency's failure to deliver water might seem odd. But the move turned out to be a smart legal strategy. Had the water districts sued the state, they likely would have lost because SWP contracts explicitly immunize the state from liability for "any damage, direct or indirect, arising from shortages in the amount of water to be made available to the agency under this contract caused by drought, operation of area of origin statutes, or any other causes beyond its control." By suing the federal government over violation of a state contract, the plaintiffs also avoided a pitfall that foiled a previous effort to claim Fifth Amendment compensation for water-delivery reductions. In 1995, CVP contractors lost a breach-of-contract suit they had filed against the federal government, seeking damages when their water deliveries were reduced to protect fish in the Sacramento River and Delta. The 9th Circuit Court of Appeals ruled in O'Neill v. United States 50 F.3rd 677, that CVP contracts immunize the federal government from such claims in the same way the SWP contracts protect the state. "In the present case," Judge Wiese wrote, "the federal government enjoys no such contractual immunity from liability." Contacts: United States Court of Federal Claims: www.uscfc.uscourts.gov/opinions.htm Roger Marzulla, attorney for the water agencies, (202) 822-6770. Natural Resources Defense Council, (212) 727-2700.

An appellate court has upheld an injunction prohibiting the City of Garden Grove from requiring existing cybercafes to get conditional use permits. However, the appellate court removed an injunction against city-imposed operating requirements at the cybercafes. The court lifted an injunction that had prohibited the city from enforcing regulations imposing a curfew on minors, and requiring adult employees, security guards on weekends and installation of video surveillance systems. The decision came in a 2-1 ruling with an extraordinarily sharp dissent. Cybercafes provide access to computers with broadband Internet access. Contending that the businesses attract gang members and spawn criminal activity, a number of Southern California cities have attempted to regulate cybercafes in recent years (see , June 2003; , September 2002). The Orange County city of Garden Grove has been in the center of the controversy over cybercafe regulation. During 2002, the Garden Grove City Council first passed an urgency interim ordinance imposing a moratorium on new cybercafes and operating restrictions on existing businesses. Later in the year, the council made the ordinance permanent and then modified the law. City officials pointed to police reports of more than a dozen incidents of criminal activity — including two murders — and a total of 289 calls to police associated with cybercafes in about 18 months. By the time the city adopted the final ordinance, 23 cybercafes were operating in Garden Grove. Five cybercafe owners sued the city to overturn the regulations, primarily on First Amendment grounds. In March 2003, Orange County Superior Court Judge Dennis Choate issued a preliminary injunction regarding the conditional use permit mandate and various operating conditions. The city, which settled with three of the business owners, appealed the injunction. The Fourth District Court of Appeal, Division Three, upheld part of the lower court’s decision. The city’s ordinance required an existing cybercafe to get a conditional use permit (CUP) by July 31, 2003. Business owners contended the ordinance gave city officials unlimited discretion to grant or deny permit applications. Treating cybercafes much like arcades, movie theaters adult cabarets — businesses that enjoy First Amendment protections — the Fourth District agreed with cybercafe owners and ruled an injunction was necessary. "As our California Supreme Court long ago concluded, ‘A long line of decisions has held unconstitutional ordinances governing the issuance of licenses to conduct First Amendment activities where administrative officials were granted excessive discretion in determining whether to grant or deny the license," Justice Raymond Ikola wrote, citing (1968) 68 Cal.2d 684, 691. "Under the ordinance, the zoning administrator has unfettered discretion in deciding what conditions to impose when issuing a CUP," Ikola wrote for the majority. "The city does not identify how or in what manner that discretion is limited, and without objective standards, the zoning administrator retains the power to require software filters restricting access to any designated website." "Subjecting plaintiffs to a facially unconstitutional requirement as a condition to the continued operation of their business is a far more serious consequence to plaintiffs than is the consequence to defendant of not being able to impose a new CUP requirement on existing businesses," Ikola wrote. The court then addressed operating restrictions that Judge Choate had prevented the city from enforcing. Those were: • A curfew on minors in cybercafes after 10 p.m., and between 8 a.m. and 3 p.m. on school days • A requirement that businesses have an employee at least 18 years old, and that businesses with more than 30 computers have at least two adult employees • A requirement that businesses have a uniformed security guard on duty from 8 p.m. until 2 a.m. on Friday and Saturday nights • A requirement that cybercafes operate a video surveillance system and maintain tapes for at least 72 hours. This is where the Fourth District panel divided. The two-justice majority struck down Choate’s injunction regarding the operating conditions, finding that all of them were narrowly tailored, content-neutral regulations that served a significant governmental interest. The court took pains to say that the video surveillance requirement was not an attempt to monitor what cybercafe patrons were doing with computers. " e are not persuaded the video surveillance system affects First Amendment activity any more than does the presence of an adult employee and/or security guard. … The ordinance requires only that the system be capable of showing ‘the activity and physical features of persons or areas within the premises,’" Ikola wrote. The court rejected the cybercafe owners’ argument that their patrons have a right to privacy protected by the state constitution. In a dissenting opinion, Presiding Justice David Sills said that the majority did not balance the interests of the two sides and that all of the lower court’s injunctions should be upheld. He noted that only five of Garden Grove’s cybercafes had experienced the serious troubles cited by police, and he chastised his colleagues for an "almost slavish deference to an unsupported and illogical conclusion of the city’s police chief and city council." "Rather than confront the fact that only a small minority of cybercafe venues have experienced problems, they illogically leap to the idea that there is a ‘well-demonstrated’ connection between cybercafes and gang-related violence. Sigh. They might as well say there is a ‘well-demonstrated’ connection between homes and residential burglary, or, in Garden Grove at least, between Vietnamese restaurants and gang-related violence," Sills continued. Sills was particularly offended by the video surveillance requirement. "Do my colleagues not realize the — there is no other word for it — Orwellian implications of their ruling today? They approve an ordinance which to look over one’s shoulder while accessing the Internet," Sills wrote. "Sorry, I can’t go along with this emasculation of our state Constitutional right to privacy and with the concomitant infringement on the rights of freedom of speech and press." The Case: , No. G032058, 04 C.D.O.S. 861, 2004 DJDAR 1043. Filed January 29, 2004. The Lawyers: For Vo: Ronald Talmo, (714) 543-1294. For the city: John Shaw and Lois Bobak, Woodruff, Spradlin & Smart, (714) 558-7000.

In his definitive book, , urban historian Richard Longstreth points out that in 1960, Southern California had 14 regional malls, located mostly in the southern L.A. County and northern Orange County suburbs that were emerging at the time. These malls were not exactly identical. A coming generation of teenagers would probe endlessly for the distinctions between Whittwood Center in Whittier, Stonewood Center in Downey, Lakewood Center in Lakewood, and Del Amo Center in Torrance. But, as Longstreth points out, they all had one thing in common: They were "large, fully integrated retail complexes, each oriented toward a pedestrian mall and conveying little semblance of a conventional urban retail district." Nearly a half-century has passed since this first generation of malls in southern L.A. and northern Orange counties were built. But they are no longer as similar as the teenagers of the ‘60s remember them as being. Del Amo Fashion Center is the largest mall in the West, a vast suburban retail kudzu sprawling across streets and arterials throughout Torrance. Lakewood Center and Stonewood Center are standard-issue four-anchor regional malls owned by Macerich Company. But Whittwood Center is a different story. Now owned by Lennar Partners, Whittwood still has the standard anchor tenants – JC Penney, Sears, Mervyn's, and Target. But Whittwood worked with developer Stephen Hopkins to create a "town center" feel and add 150 townhomes to the mix. The renderings of Whittwood Town Center may seem a little like Southern California kitsch – rows of palm trees and a grid system layered on top of the old anchor-tenant footprint – but it is definitely not Del Amo Fashion Center. In a way, Whittwood Town Center is the opposite of what it was originally supposed to be. It still has a pedestrian mall and serves as a full-service retail center. But the whole point of the facelift is to mimic – rather than counterpoise – the conventional urban retail district. As the Whittwood Center story shows, California is gradually being de-malled. The regional malls and shopping centers that emerged during the suburban era are becoming obsolete. But they are not all transmogrifying in the same way. Some are growing into the larger regional centers that are necessary to compete in today's retail world. Some are being torn down and replaced with a new kind of shopping center, often something as simple as the standard "power center" with discount retailers. Some are being torn down and replaced with housing, usually high-density housing with a traditional street grid that has been superimposed on the old mall footprint. And still others, like Whittwood, are being transformed without being razed, so that they are more urban and mixed use in nature. The reasons for this change are as profound as they are obvious. Fifty years ago, a standard-issue suburban mall like Lakewood Center or Del Amo Center was a necessary selling point for the single-family-home community being built around it. Today, regional malls are struggling to compete against high-end "experience" shopping such as The Grove in Los Angeles and against low-end discount shopping as exemplified by Wal-Mart. Smaller shopping centers are also struggling, as community retailers gradually go by the wayside in the retail battle. Many more may be at risk if the big three supermarket chains – Vons, Albertsons, and Ralphs – do not recover market share from the recently concluded labor strike and lockout. At the same time, land in California's metropolitan areas is increasingly scarce. The wide-open farmland of a half-century ago in southern L.A. and northern Orange counties has given way to a congested, low-rise tangle of houses, apartments, business parks, and retail centers. The pressure for more housing – and, for that matter, more business parks – is unabated. In particular, the demand for starter homes and sophisticated retail is virtually bottomless among the emerging ethnic populations throughout the state, especially in metropolitan Los Angeles. So old malls, shopping centers, and commercial strips have become fodder for the next generation of urban growth in California. And make no mistake about it, we are talking about urban growth here. It is true that many of these centers – Whittwood Town Center being one example – still devote large chunks of land to surface parking. But in virtually all cases, the most obvious icon of the suburban era – the massive, nondescript enclosed shopping center that could, as one commentator recently put it, be mistaken for an insecticide factory – has been eradicated. The enclosed mall has been replaced with a kind of ersatz urbanism that uses traditional building forms and grid patterns as a selling point, which suggests that the whole place is not simply a suburb but something much more sophisticated. At its best, the de-malling of California is a breathtaking enterprise. The leading example here is Paseo Colorado in Pasadena – a recent transformation of the 1980 regional mall, Plaza Pasadena. The original mall was an early attempt to draw shoppers back to downtown Pasadena. In fact, Plaza Pasadena was one of the reasons why the adjacent Old Town Pasadena returned to life. Despite its urban location, however, Plaza Pasadena was a standard, blocky, enclosed mall. And it cut off the City Beautiful axis between Pasadena's City Hall and its Civic Auditorium. The new version quite literally blew up the center of the building, opening up the center of the mall to pedestrians to reconnect the two civic icons. Even more remarkably, the developers of Paseo Colorado constructed four stories of apartments on top of the existing steel, thus creating a mixed-use project without surrendering the mall's basic structure. And when Macy's declined to renovate, the developers removed the blank brick wall facing Colorado Boulevard by "pasting" coffee and juice shops on the wall's exterior. Of course, not all of the de-malling transformations are breathtaking. In Oxnard, the 1960s-era Esplanade Mall was bulldozed after the city lost a mall war with neighboring Ventura and replaced it with a massive power center featuring every discount retailer imaginable – Target, Home Depot, Borders, Old Navy, and so on. The result is a huge financial success for Oxnard – a very gratifying development after losing the mall war – but it is certainly not a good piece of urbanism. Neither, for that matter, is the winner of the mall war in neighboring Ventura – a standard Macerich four-anchor that failed to take advantage of the fact that it sits immediately adjacent to a residential neighborhood. The de-malling of California is certainly not what the visionary mall developers of the 1950s had in mind when they invented the two-anchor shopping center. And it is probably not how the visionary planners of past generations imagined that urbanism would come to California. But if there is one thing we have too much of in this state, it is a suburban-era infrastructure that is quickly becoming obsolete. And so de-malling will likely to continue apace, as home prices skyrocket, department store chains merge, and Wal-Mart takes over the world.

Three sweeping growth measures in three very different parts of the state — two measures seeking to tightly control development and one growth-friendly plan — all lost during the March 2 primary election. Voters in San Diego and San Benito counties overwhelmingly rejected growth-control general plan amendments. In El Dorado County, voters said no to approving an entire general plan via initiative. Elsewhere, Contra Costa County voters overturned a county ordinance that attempted to block Wal-Mart supercenters. In the city of San Marcos, however, the electorate reversed the City Council’s approval of a second Wal-Mart store for the north San Diego County town. In Napa County, voters rejected a controversial stream-setback ordinance approved by county supervisors, and voters said no to a more stringent setback initiative backed by environmentalists. In an apparent vote for environmental protection, Humboldt County voters said no to the recall of District Attorney Paul Gallegos. The first-term prosecutor sued the giant Pacific Lumber Company over an environmental study last year, and Pacific Lumber responded by pouring more than $200,000 into a recall campaign. Possibly the most significant "yes" vote for land use during the March election was in the Bay Area, where voters in seven counties approved a $1 increase in tolls for seven state-owned bridges. The toll hike from $2 to $3 is expected to generate about $125 million annually, with 90% of the funds going for transit projects. In San Diego County, voters rejected the Rural Lands Initiative, which sought to prevent development of 700,000 acres of sparsely populated eastern and northern San Diego County. Voters rejected a similar measure in 1998. The initiative would have amended the county general plan and placed a "Clean Water and Forest" overlay zone on rural lands. Those lands would then have been zoned for 40-, 80- or 160-acre minimum lot sizes. Backers lined up support from the San Diego City Council, the San Diego League of Women Voters, the American Lung Association and a number of environmental and labor organizations. But opponents, lead by the San Diego County Farm Bureau, poured more than a $1 million into the campaign against Proposition A. Opponents prepared television advertisements that claimed the initiative would force family farmers off their land, opening rural areas to rapid growth. "We think the opposition, with its big developer money, ran a very deceptive campaign and it confused the voters," Duncan McFetridge, a Proposition A organizer and long-time opponent of backcountry development, told the . Measure A apparently did not get a bounce in the polls from last fall’s firestorms, which burned across large portions of the area that the initiative targeted. In tiny San Benito County east of Salinas, voters rejected a complicated growth-control measure. Although the county remains quite rural, San Benito has become something of a relief valve for Silicon Valley workers seeking more-affordable homes. The measure that voters rejected on March 2 capped growth at 1% annually, and rezoned most of the unincorporated county lands from 5-acre to 20-acre minimums, or from 40-acre minimums to 160-acre minimums. The measure initially came to the Board of Supervisors as an initiative that had qualified for the ballot. Supervisors simply adopted the measure. Opponents, led by farmers and real estate interests, then gathered enough signatures to force a referendum on the measure. Opponents were stunningly successful, winning by more than a two-to-one ratio. In El Dorado County, voters were faced with what appeared to be the first general plan proposed by initiative — and about 70% voted against what was seen as a pro-growth plan. El Dorado County has been working on its general plan since the early 1990s. A plan adopted in 1996 was thrown out by a judge who ruled that the county had not fully addressed all of the potential environmental impacts. The county has been working on a revised plan since 1999, and supervisors expect to begin final hearings on new general plan alternatives later this year. Some business groups and taxpayer advocates, who have complained about the amount of money the county’s planning process has cost, were tired of waiting, so they placed an entire plan on the ballot via initiative. The proposed plan was similar to the 1996 plan that the county had adopted but the Measure G version on the ballot did not contain an inclusionary housing requirement. Although voters have approved general plans elsewhere — Pasadena voters backed a City Council-sponsored general plan in 1992 — voters have apparently never before decided on a general plan written as a citizen initiative. Opponents and county officials raised a number of legal questions. The initiative also appeared to divide business and development groups, some of whom were concerned about how a plan approved by voters could be amended in the future. In Napa County, two measures intended to protect riparian areas and halt the conversion of forested hillsides to vineyards appear to have had the opposite effect. The measures gave rise to a new group called the Napa Valley Land Stewards Alliance, a property-rights organization that fought both measures. On election day, the least-restrictive of the two measures gathered barely one-third of the vote. "The most unintended consequence of this Measure P debate is the formation of the Napa Valley Land Stewards Alliance," George Bachich, who heads the group, told the . He vowed that the group would remain active in local politics. Measure P was a referendum of a stream-setback ordinance that supervisors had adopted. It would have barred most activities, including farming, near streams, but would have provided an exception for housing. Measure O would have established even larger setbacks. Backers said the regulations were needed to improve water quality and habitat, and to reduce the risk of flooding. But opponents contended the regulations were overbearing and could force grape growers to take land out of production. In the big-box wars, Wal-Mart won a major skirmish in Contra Costa County but lost a smaller battle in San Marcos. Last year, Contra Costa County supervisors adopted an ordinance prohibiting stores of more than 90,000 square feet from devoting more than 5% of floor space to nontaxable items. Supervisors made clear their intent was to block Wal-Mart supercenters — stores of about 200,000 square feet that sell groceries. Wal-Mart quickly qualified a referendum for the ballot and then poured a reported $1 million into the campaign. Wal-Mart’s investment paid off, as about 54% of voters said no to the county’s regulation. In San Marcos, voters also rejected the elected body’s decision. But in this case, voters reversed a City Council decision to amend a specific plan so that Wal-Mart could build a second store in town. Despite getting outspent 10-to-1, Wal-Mart opponents won about 57% of the vote. Traffic congestion in San Marcos appeared to be a significant consideration. The Bay Area bridge toll increases will provide a large infusion of new money for regional transit. Voters in seven counties considered Measure 2, with only the Solano County electorate deciding against the 50% toll hikes. Among the projects for which the money is earmarked are: • A commuter rail service on the Dumbarton Bridge between Fremont and East Palo Alto • Extension of BART lines in the East Bay and South Bay •Seismic retrofits to BART’s transbay tube •More ferries and express busses •A "fourth bore" for the Caldecott Tunnel between Oakland and Contra Costa County. Although the increased tolls will provide only partial funding for most projects, supporters say the tolls will move some of the already planned projects forward. Taxpayer advocacy groups tried to rally opposition to the toll hikes, saying that only 6% of trips in the region are made by transit. But the vote mirrored elections in recent years in Santa Clara and Alameda counties, where voters provided two-thirds approval for sales tax extensions for transit projects. The election in Humboldt County appeared to mark a sea change for the rural county, which has been dependent on the timber industry for years. Only weeks after taking office in 2003, District Attorney Gallegos sued Pacific Lumber — the county’s large private employer, with 800 workers — for allegedly providing false information in a study of a proposed timber sale. Pacific Lumber and other Gallegos opponents said that the recall was over Gallegos’s handling of criminal prosecutions. Gallegos countered that Pacific Lumber, which provided most of the recall campaign funding, was trying to run the county. The election was widely viewed as a referendum on Pacific Lumber, if not the entire coastal timber industry. Only 39% of voters backed the recall. Local Land Use Election Results Bay Area Seven counties voted on a $1 toll increase for all Bay Area bridges (except the Golden Gate Bridge) to fund a wide variety of transit projects and some road projects. Collective vote, Yes: 56.7% Alameda County, Yes: 55.4% Contra Costa County, Yes: 51.1% Marin County, Yes: 63.8% San Francisco, Yes: 68.9% San Mateo County, Yes: 54.9% Santa Clara County, Yes: 58.8% Solano County, No: 59.1% Contra Costa County A Wal-Mart back referendum of a county ordinance prohibiting stores of more than 90,000 square feet from devoting more than 5% of floor space to non-taxable items. Measure L, No (ordinance fails): 53.8% An advisory measure on the creation of a redevelopment agency, which would target central Martinez. Voters rejected a redevelopment agency previously. Measure M, Yes: 51.4% An advisory measure on expanding the capacity of Los Vaqueros Reservoir from 100,000 acre-feet to 500,000 acre-feet. The agency said the expansion is necessary for improved water quality and drought assurance. Measure N, Yes: 61.6% El Dorado County An initiative for a new general plan. The proposed plan was similar to the 1996 plan, which a judge rejected on California Environmental Quality Act grounds. Measure G, No: 70.0% Napa County Stream setback initiative establishing no-logging zones within 325 feet of streams, 75 feet from springs, 1,000 feet from wetlands and homes, and 150 feet from logger’s residence. The measure is targeted at the conversion of forested hills to vineyards. Measure O, No: 72.9% Referendum of a county stream setback ordinance, which established setbacks of 25 to 150 feet for farms to improve habitat and flood safety. Measure P, No (ordinance fails): 65.4% Orange County Annexation of the Country Club and Fairlynn neighborhoods, which are unincorporated islands of 222 acres and 147 acres, respectively, within the city limits. Opponents of the annexation forced an election. Measure F, No: 68.4% Riverside County An advisory vote on annexation of the Redhawk housing development, and parcel taxes to fund services. Redhawk voters rejected annexation in 1999, but there was no organized opposition this time. Measure E (annexation), Yes: 94.0% Measure F (parks and streets tax), Yes: 93.2% (2/3 vote) Measure G (street lighting tax), Yes: 92.7% (2/3 vote) San Benito County Referendum on growth-control initiative that the Board of Supervisors adopted without an election in 2003. The measure would have downzoned about 800,000 acres of farms and ranchland. Measure G, No (growth-control fails): 68.9% San Diego County The Rural Lands Initiative, a general plan amendment establishing a "Clean Water and Forest" overlay zone for 694,000 acres in northern and eastern San Diego County. The overlay set minimum parcels sizes of 40, 80 and 160 acres. Proposition A, No: 64.4% Rezoning of 20 acres on the east side of town from rural residential to automotive/general commercial. The property owner, the Lucidi family, proposed a gas station and convenience store, and an indoor recreational vehicle parking facility. Proposition E, No: 83% Referendum of amendments to the University Commons specific plan. The amendments increase the amount of multi-family residential land and block a big-box store. Proposition F, Yes (amendments approved): 60% Referendum on amendments to University Commons specific plan to allow development of a big-box store. A Wal-Mart was proposed. Proposition G, No (amendments fail): 57% San Francisco A measure to provide incentives for affordable housing development downtown and along the southern waterfront. Developers would get density bonuses, height restriction exemptions, and expedited building permits. In exchange, 40% of units would be affordable, with two-thirds of units reserved for people who work in San Francisco. Proposition J, No: 70.0% Santa Clara County A council-sponsored update to 1990’s Measure P, which limited residential building permits to 2.5% (about 200) per year. The revisions extend the permit limit by 10 years to 2020, reserve a number of permits for downtown mixed-use projects, and eliminate the requirement that permits be distributed equally around town. Measure C, Yes: 75.4% Yolo County A city-sponsored measure prohibiting the spending of public funds or taking any action to support a proposed flood wall without voter approval. Four years ago, the Army Corps of Engineers recommended construction of a six-mile-long floodwall to protect the city from Cache Creek. The city contends other flood-control measures are available. Measure S, Yes: 62.8%

The City of Wasco has been ordered to pay an attorney that represented the city in complicated bond finance dealings during the mid-1990s. The First District Court of Appeal rejected the city’s argument that the payments violated the state constitution’s ban on incurring general fund debt. The history of Wasco’s bond finance troubles is long and complicated (see , May 2003; , August 1998, July 1998, January 1998; , December 1995). Essentially, the city in 1989 issued $35 million of Marks-Roos bonds and invested a substantial portion of the proceeds in speculative real estate development projects in Wasco, Rosamond, Ione and Nevada County. In 1995, the city hired attorney Cary Lapidus to represent it in the $7 million Rosamond deal, which was going sour. Lapidus first represented the city on an hourly basis and, later, on a contingency basis. Lapidus helped negotiate three agreements with the bond underwriter in exchange for a one-third contingency payment. When he did not get paid, Lapidus initiated an arbitration proceeding against the city. The arbitrator determined that Lapidus was due $484,155. However, because the city had not received all of the money from the agreements, the arbitrator determined Lapidus was presently owed only $86,170 plus 10% annual interest, $21,437 for arbitration costs, and another $10,000 from a trust account. In May 1998, a superior court judge entered an order confirming the arbitrator’s decision. The city still did not pay Lapidus all the money he was owed, so the attorney filed a lawsuit seeking to compel payment. After deducting credits of $95,000 and adding interest accrued since May 1998, San Francisco Superior Court Judge David Garcia determined the city owned Lapidus $83,043, plus interest accruing at about $17 per day. In April 2003, Garcia ordered the city "to make appropriate budgetary appropriations for payment." Instead, the city appealed Garcia’s decision. The city argued that article XVI, § 18 of the state constitution prohibited the city from incurring debt or liability in excess of any year’s revenues without two-thirds voter approval. The section essentially mandates balanced budgets. But a unanimous three-judge panel of the First District, Division Three, rejected the city’s argument. The state Supreme Court ruled in , (1998) 18 Cal.4th 1035, that three exceptions to § 18 exist. One of those exceptions applied in Wasco’s case, the First District ruled: The limitation does not apply to local government debts to be paid from nontax revenues held in a special fund. Typically, this exception permits bond financing where revenues from a project constructed with the bonds are used to retire the debt. In this case, Lapidus was to be paid by money he helped secure — money that was separate from the general fund. "The issue here has arisen because failed to apply the proceeds of the recovery procured by Lapidus in the manner required by the contingency fee agreement," Justice Stuart Pollak wrote for the court. "By failing to pay Lapidus from the proceeds of the recovery, Wasco breached the contingency fee agreement, the terms of which were fully consistent with § 18. The city thereby became liable to Lapidus in an amount equal to the unpaid fees … Section 18 provides no excuse for avoiding an obligation which, if performed in accordance with its terms, would not have violated the constitutional restriction." The Case: , No. A102772, 04 C.D.O.S. 566, 2004 DJDAR 712. Filed January 21, 2004. The Lawyers: For Lapidus: Robert D. Links, Berger, Nadel & Vannelli, (415) 362-1940. For the city: N. Thomas McCartney, (661) 327-4147.

Like scores of California suburbs, Pomona suffered the death of its downtown during the 1960s and 1970s. And, as elsewhere, the death was little noticed at the time because there was a great deal of newfangled housing, retail and office development elsewhere in town. For many years, downtown Pomona, which lies a bit south of Interstate 10, about 30 miles east of Los Angeles, was characterized by what one developer calls "occupied vacancies." The buildings were underused and downtown was lifeless. "It became a haven for homeless, crime. All sorts of bad things happened to downtown," said David Armstrong, whose family has owned a downtown business since 1944. "In the 1980s, you could have taken a bowling ball and rolled it down Second Street and not hit anything except the homeless camped out on front steps." But, led by two brothers who grew up in town, downtown now thrives around the Pomona Arts Colony. The colony is a tight collection of about 20 art galleries and show spaces interspersed with live-work lofts, offices, a smattering of restaurants and watering holes, a thriving nightclub and even some brand new development. More, maybe much more, is on the way. Now, Ed and Jerry Tessier, who run Arteco Partners, are taking their culture-based development formula to downtown Ontario, which has welcomed the Pomona-based developers with open arms. Arteco is reusing four post-war industrial buildings — including a former Hang 10 apparel factory — for creation of 77 loft-style housing units in Ontario. "We’ve really been the lone voices in the wind out here for 10 years," Ed Tessier said. But now that the Pomona Arts Colony is a "roaring success," other cities are willing to consider the concept, he said. The Tessiers subscribe to Carnegie Mellon University Professor Richard Florida’s theory that the most economically successful cities are those that attract the "creative class." In his book , Florida argues that authentic, hip places attract the most diverse populations, and the creative thinkers who drive the information-age economy want to live in such places. Not everyone buys the argument, and opponents point out that some of Professor Florida’s best examples (San Francisco, Seattle) have been hardest hit by the dot-com bust. Still, the Tessiers and other developers, business advocates and downtown boosters see the logic. And although Florida deals mostly with big cities, some of his believers see no reason why the theory will not work in suburbia. In fact, many suburban downtowns already function like villages in which nothing is more than a 10-minute walk away, Ed Tessier said. What the downtowns need most is residents, who generate activity and commerce. When the Tessiers started on the Pomona Arts Colony during the early 1990s, they met resistance from numerous fronts, including City Hall. But with the family property management company at their disposal, they began using inexpensive rents and favorable zoning regulations to attract Los Angeles artists in need of space. Since then, Arteco Partners has completed the adaptive reuse of about 20 buildings in downtown Pomona. An old newspaper building provides a good example of the Arteco approach. The ground floor provides retail space, the second floor has lofts, and studios fill the third floor. In the basement is a nonprofit organization. Other projects have living quarters in the back, working space in the middle and a retail area facing the street "We developed a range of live-work types," Ed Tessier said. "The majority are artist-in-residence style spaces. Some are more geared toward creative arts companies." Armstrong, whose family owned a downtown furniture store and, later, a collectibles gallery from 1944 until 1998, has also revamped two buildings with upper-floor live-work space. Now he is refurbishing 3,800 square feet next to a pawn shop for a ceramics gallery and museum. This approach has brought artists, artisans, website designers and other creative people to downtown Pomona. The district now regularly conducts art walks and provide free outdoor entertainment to draw people from throughout the region — people who never would have gone to Pomona otherwise. "In order to create a business atmosphere, you’ve got to have customers. What we’ve hit upon is re-populating the area. Those folks will dictate what businesses we have," said Armstrong, who is president of Pomona’s Central Business District Association. A current Arteco project is the adaptive reuse of the old, five-story Mayfair Hotel building. The proposal calls for retail on the ground flood — the Tessiers are talking with a bakery and a restaurant — and affordable housing above. Unlike most of Arteco’s projects, this one does have city participation the form of financing for the housing units. "There has been a gradual evolution of the city’s participation," Tessier said, who understands the city’s initial reluctance. "There was a 30-year history of failure going back to the creation of the pedestrian mall in ’61. That was a disaster financially for the city." After initially showing little interest, the city undertook regulatory reform during the middle- and late-1990s, including designation of a loft district, which was rare for a suburb, Tessier said. After seeing that the private development model was successful, the city in the last three years has taken on projects such as rehabilitation of the Fox Theatre and new streetscapes. The city has also provided assistance in the form of housing financing, parking swaps and land assemblies for new development, such as the Mission Promenade, a 72,000-square-foot project across from City Hall with ground-floor retail, second-floor offices and live/work lofts on the third floor. The city is also talking about a transit-oriented development around the Metrolink station, which sits just across the railroad tracks from the arts colony. The Tessiers also emphasize the importance of educational institutions. They have lured Cal Poly Pomona and Western University to open downtown classrooms, and they are working on a deal with Azusa Pacific University for a satellite arts center. Under construction now is a charter high school — run by a nonprofit organization that the Tessiers started in 1992 — that could eventually accommodate 390 students in seven vintage structures on a city block. Next up could be a charter school for younger students. "There are no immediate economic benefits" of the investment in educational facilities, Ed Tessier said. "If we were a short-term investor, it wouldn’t make any sense even from a philanthropy perspective." But in the long run, the schools make downtown housing more realistic for families. And the schools tell creative arts companies that trained, entry-level workers are already in town. Plus, the schools provide a safety net of stable employment, which is attractive to potential retail developers and to artists looking for day jobs, he said. The Tessier brothers are now taking their approach to nearby Ontario, where the planned Emporia Arts District lies just west of historic Euclid Avenue. They were attracted by infill and rehabilitation opportunities that could be had at decent prices, Jerry Tessier said. The city responded to the private investments with a zoning change, adoption of a new mixed-use ordinance, a parking variance and work on a specific plan, all within one year, Jerry Tessier said. "The Tessiers understand this niche market," said Ontario Redevelopment Director Jim Strodtbeck. The city has had a downtown specific plan for some time, but reviving the district has been a very slow process. The arts district "can bring a new dimension to downtown," he said. "In the long-run, the pattern has been that live-work arts environments have been the cutting edge to gentrification," Strodtbeck said. "I’m not sure that we really want gentrification. But even if it’s just a successful arts district, we’ll take that." Besides 27 units at the former Hang 10 building, the Tessiers are working on eight live-work units in an old post office building designed by famed Los Angeles architect Paul Williams. The city had owned the building for years, but until the Tessiers came along, the city could not find a buyer willing to renovate the structure. Recently, feminist artist Judy Chicago and her husband, photographer Donald Woodman, served as artists-in-residence, conducting a series of exhibits and openings in Pomona and Ontario. The participation of such big name artists provided a boost of legitimacy for the suburban downtowns. Contacts: Ed and Jerry Tessier, Arteco Partners, (909) 629-5359. David Armstrong, Pomona Central Business District Association, (909) 629-3592. Jim Strodtbeck, Ontario Redevelopment Agency, (909) 395-2294. Mission Promenade website: www.mission-promenade.com

WASHINGTON _ The federal Clean Air Act requires new factories and power plants to use the "best available control technology" to limit air pollution, but generally lets states determine what specific systems satisfy the law. The Environmental Protection Agency (EPA) stepped in, however, when the State of Alaska decided to allow a major mining operation to install a pollution control system for a new power plant that would be one-third as effective as a more expensive technology. Alaska cried foul and challenged the EPA’s move to require the more expensive pollution controls all the way to the U.S. Supreme Court. But in a closely divided decision issued January 21, the usually states rights-minded high court sided with the feds and upheld EPA’s authority to override state environmental regulators. Environmentalists hailed the court’s decision in as a breath of fresh air. The ruling "shows that the federal government has an obligation to secure clean, safe air for all Americans," said Vickie Patton, a Colorado-based attorney with Environmental Defense, which filed a friend-of-the-court brief on the EPA’s side. Alaska officials and industry groups countered that the decision misread the law, mistreated the states, and threatened construction of vitally needed new power plants. "There’s a need for certainty in the permitting process," said Paul Seby, a lawyer with the Center for Energy and Economic Development in Denver, an industry coalition. "For 30 years, it’s been understood that the state agencies were the ones that made the decisions." The ruling may have limited impact under the current EPA, which has retreated on pollution enforcement since President Bush took office. In California, the decision is seen as having little immediate effect because the state air pollution controls are tougher than the federal regulations. The dispute began in 1996 when the operators of the Red Dog zinc mine, the world’s largest, sought a permit to build a new diesel power generating plant in order to increase production by 40%. The facility, located in northwest Alaska 100 miles north of the Arctic Circle, is the region’s largest employer, with 360 full-time workers. Teck Cominco Alaska, the company that operates the mine, applied to the Alaska Department of Environmental Conservation for a permit for the new power plant under the Clean Air Act’s "prevention of significant deterioration" or PSD provisions. In areas where air quality standards are already met — called attainment areas — major new pollution sources are required to use "best available control technology" or BACT. The law defines BACT to be "an emission limitation based on the maximum degree of reduction" that is "determined by the permitting authority" to be "achievable" taking into account "energy, environmental, and economic impacts and other costs." States with approved pollution control plans are authorized to administer the permit process, but the act gives EPA authority to prevent construction of new facilities that do not conform to the law. The Alaska agency in March 1999 proposed that Cominco install a technology known as "selective catalytic reduction" or SCR that reduces nitrogen oxide (NOx) emissions by about 90% through a chemical process. Cominco responded by proposing an alternative control technology known as Low NOx that reduces nitrogen oxide emissions by about 30% through more complete burning of fuel. With the public comment period still open, the agency reversed itself in May 1999 and recommended the Low NOx system favored by the company. Prodded by the National Park Service, which administers the nearby Noatak Nature Preserve, the EPA objected to the state agency’s position. After several months of back and forth, the state granted a construction permit on December 10, 1999. The EPA issued an order blocking the permit the same day. The state went to the Ninth U.S. Circuit Court of Appeals, claiming EPA could block its decisions only through state courts. When the appeals court ruled against Alaska’s position, the state took the case to the Supreme Court. The high court also sided with the EPA, dividing 5-4 along mostly conservative-liberal lines. For the majority, Justice Ruth Bader Ginsburg said EPA "has supervisory authority over the reasonableness of state permitting authorities’ BACT determinations and may issue a stop construction order . . . if a BACT selection is not reasonable." On the specific issue, Ginsburg said EPA had acted reasonably in deciding that the state agency "lacked evidentiary support" for approving the Low NOx system rather than SCR for the new power plant. Ginsburg was joined by her three liberal colleagues — John Paul Stevens, David H. Souter, and Stephen G. Breyer — and by Justice Sandra Day O’Connor, frequently the swing vote on the court. Four conservatives dissented: Chief Justice William H. Rehnquist and Associate Justices Antonin Scalia, Anthony M. Kennedy, and Clarence Thomas. Writing for the dissenters, Kennedy said, "EPA’s distrust of state agencies is inconsistent with the Act’s clear mandate that States bear the primary role in controlling pollution and, here, the exclusive role in making BACT determinations." States split on the issue before the high court: 11 sided with Alaska, while 13 — including California — backed the EPA. "We were pleased," Gavin McCabe, a deputy state attorney general in San Francisco, said of the high court’s ruling. "It’s important for federal environmental law to set the floor but not the ceiling." McCabe said California’s air quality agencies typically would require the more expensive SCR technology in situations comparable to Alaska’s. McCabe and Environmental Defense’s Patton both said EPA has rarely second-guessed state agencies’ decisions in the past. "It is only in the most unusual and compelling of circumstances when EPA has had to step in," Patton said. But Reed Hopper, an attorney with the conservative Pacific Legal Foundation in Sacramento, said the decision places companies seeking to build new factories or power-generating plants in a bind. "No matter how much time or effort they have spent in negotiation with the state, they know that the EPA at any time can invalidate that permit by means of a unilateral order," Hopper said. Ironically, the dispute no longer matters for the Red Dog mine. Cominco decided last year to install the SCR technology rather than wait for the end of the case. Contacts: Vickie Patton, Environmental Defense, Boulder, Colorado, (303) 440-4901. Paul Seby, Center for Energy and Economic Development, Denver, (303) 571-1400. Gavin McCabe, California Attorney General’s Office, (415) 703-5605. Reed Hopper, Pacific Legal Foundation, (916) 362-2833. Los Angeles Daily Journal, is editor of (CQ Press).

In a 2-1 decision with a vigorous dissent, the Ninth U.S. Circuit Court of Appeals has upheld the State of Oregon’s law regulating billboards. The law prohibits new billboards except for "on-premises signs." An Oregon resident said the law violated his First Amendment rights by favoring businesses. But the court concluded the law passed the content-neutrality standard. The Oregon Motorist Information Act (OMIA) prohibits all signs and billboards except those that existed in commercial or industrial zones prior to June 12, 1975. The law, however, permits new on-premises signs that attract attention to "activities conducted on the premises." Also permitted are temporary signs of up to 12 square feet. The law further allows the state director of transportation to grant a variance from the temporary sign restriction "for good cause." Resident James Lombardo challenged the law because it prevented him from displaying a 32-square-foot sign at his house that stated, "For Peace in the Gulf." Lombardo claimed the law violated the First Amendment because it was a content-based regulation and because the variance procedure gave a state official unbridled discretion. A federal magistrate found that the law was not content-based and recommended that the challenge to the variance procedure be dismissed as "unripe" because Lombardo had not filed an application. District Court Judge Michael Hogan accepted the magistrate’s recommendations and ruled for the state. Lombardo appealed, and a split three-judge panel of the Ninth Circuit upheld the lower court. On appeal, Lombardo contended that the Oregon law prohibited him from freely expressing his opinion outside his own home, even though the law would allow a business to express commercial speech. He contended this was a First Amendment violation because the content of the sign was the basis for the restriction. The major precedent in billboard cases is the U.S. Supreme Court’s 1981 ruling in , 453 U.S. 490. In , the court held that a law is invalid if it imposes greater restrictions on noncommercial signs than on commercial signs, or if the law regulates noncommercial billboards based on their content. More recently, the Ninth Circuit ruled in , 340 F3d 810 (see , October 2003) that the on-site/off-site distinction in Los Angeles’s billboard ordinance was constitutional. In the Oregon case, judges on the Ninth Circuit panel split over whether was the proper precedent for deciding Lombardo’s claims. The majority said yes. "The primary argument raised by Lombardo is that the billboard law negatively affects noncommercial speech because fewer residents will be able to display signs that relate to activity conducted on the premises, where commercial establishments will be able to display their signs advertising their activity with relative ease. This argument fails under our precedent," Judge A. Wallace Tashima wrote for the court. "The OMIA defines on-premises signs with respect to location alone, not content. The key consideration is whether the sign relates to activity conducted on the premises. Although commercial billboards may prevail under the OMIA’s legislative scheme, neutrality is nonetheless maintained because the regulation allows noncommercial messages on either onsite or offsite signs," Tashima continued. The court also upheld the variance procedure because it expressly prohibited content-based decisions, and because judicial precedent provides adequate guidelines for the Department of Transportation. In a lengthy dissent, Judge Betty Fletcher said she would overturn the lower court. "The OMIA allows commercial messages where noncommercial speech is not permitted, draws content-based distinctions among noncommercial billboards and includes an essentially standardless variance procedure," she wrote. Fletcher pointed to the Oregon law’s exception for on-site "business identification signs" and small off-site signs that "provide information for the safety or convenience of the public." Those standards are based on the sign’s content, she wrote. " does not control the result here," she wrote. "The OMIA includes an explicit preference for ‘business identification signs’ and content-based distinctions among noncommercial messages that were not at issue in ." Fletcher cited the plurality opinion in at length. In it, Justice Byron White wrote: "Insofar as the city tolerates billboards at all, it cannot choose to limit their content to commercial messages; the city may not conclude that communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages." The Oregon law violated this principal, Fletcher said. Furthermore, she noted that the variance procedure contained only a list of two examples of situations that may constitute good cause. "Without ‘narrow, objective and definite standards to guide the licensing authority,’ the OMIA’s bare promise of content neutrality can never be tested," Fletcher wrote, citing , 505 U.S. 122, 131 (1992). The Case: , No. 02-35269, 03 C.D.O.S. 11152, 2003 DJDAR 14104. Filed December 29, 2003. The Lawyers: For Lombardo: Alan Herson, (541) 770-1372. For Warner: Janet Metcalf, attorney general’s office, (503) 378-4402.

An appellate court has overturned the City of Los Angeles's approval of a variance that allowed the expansion of a nonconforming use. The court determined that a proposal to expand a gas station located in a residential zone did not meet the city's criteria for a variance. Specifically, the Second District Court of Appeal found that there was no evidence that imposing existing zoning requirements would create a hardship for the landowner or business owner — a requirement for a variance. The court also ruled that the city could not approve the variance based on equity because there were no comparable properties with the same zoning and use in the vicinity. Stephen L. Jones, the attorney representing a landowner who fought the variance, said the court appeared to be sending a message to the city with its blunt ruling and publication of the opinion. That message is that the law — not politics — must provide the basis for the city's land use decisions, Jones said. He noted that in administrative hearings before three different bodies at the city, the variance had received 21 affirmative votes without a single dissention. Yet the reversal appeared to be easy for the unanimous three-judge appellate panel. The gasoline station in question is located just off the Pacific Coast Highway. The station has been in operation since 1922, and it has been a nonconforming use since 1925, when the city annexed the territory and zoned it for single-family residences. In 1996, station owner Brian Clark began detailing automobiles on the site. The city cited Clark for operating an unlawful car wash, so Clark in 1999 filed an application for a variance to permit the detailing service. A year and a half later, the zoning administrator approved the variance. On appeal from resident Theodore Stolman, both the West Los Angeles Area Planning Commission and the City Council upheld the zoning administrator's decision. Stolman then filed a lawsuit against the city. Los Angeles County Superior Court Judge Dzintra Janavs ruled for the city. Stolman appealed and the Second District overturned the lower court. Under the Los Angeles Municipal Code, the granting of a variance requires findings in five areas. Two of those areas were at issue here: the creation of a hardship, and the preservation of property rights that are generally possessed by property owners in the same zone and vicinity. The zoning administrator reasoned that the limited nature of the gas station prevented the continued viability of the business, so imposing the strict requirements of the residential zoning would be an "unnecessary hardship." But the Second District rejected this conclusion because the only evidence of hardship was Clark's limited testimony. The court noted that the property owner invested $144,000 in new gasoline tanks before Clark even applied for a variance. " here is no evidence demonstrating that the property cannot be put to effective use as a gasoline station without the automobile detailing operation. Accordingly, there may be no unnecessary hardship if Clark is seeking the variance in order to increase his already existing profits from the sale of gasoline" Presiding Justice Charles Vogel wrote for the court. As for the property rights issue, the zoning administrator found that Clark's station was unique to the immediate area. But she also determined "numerous examples exist of gas stations which exist on zones where they are not permitted by right but on which they are able to operate pursuant to approvals of variances, nonconforming rights cases or other discretionary actions." Stolman contended this finding was bogus because the city code requires comparisons with property "in the same zone and vicinity." The closest example anyone could find was a gas station in a residential zone in the city's Eagle Rock district — 19 miles away — that was allowed to add a convenience store. The court ruled that Clark's gas station "should not be compared to other properties potentially located 20 or more miles away. If, as here, there is no evidence of any comparable properties within reasonably close proximity … the third finding cannot be made and the variance should be denied." The Case: , No. B164169, 04 C.D.O.S. 30, 2004 DJDAR 22. Filed December 30, 2003. The Lawyers: For Stolman: Stephen L. Jones, Overton, Lyman & Prince, (213) 683-1100. For the city: Jeri L. Burge, assistant city attorney, (213) 485-6361.

Two decisions by the Ninth U.S. Circuit Court of Appeal appear to bolster local rent control ordinances, although the decisions at least hint at the court’s doubt as to whether the state’s system for weighing landowners’ takings claims is adequate. In separate cases, the Ninth Circuit rejected allegations that the application of mobile home rent control ordinances in Carson and Morgan Hill were unconstitutional takings of private property. In both cases, the Ninth Circuit said the claims were unripe — meaning not ready for a decision — because the mobile home park owners had not sought relief in state court. Both mobile home park owners said they did not take their claims to state court because doing so would be futile. Both Ninth Circuit panels appeared at least mildly receptive to this argument, but the court in both cases concluded that the argument was only theoretical because the property owners could point to no state court ruling that supported their argument. The bottom line, said Rochelle Brown, an attorney who defended Carson’s rent control ordinance, is that landowners cannot make a federal case out of alleged rent control takings unless the landowners first lose in state court. "The importance to local government that has rent control is that landlords who are unhappy with local government decisions have to challenge them in state court, rather in federal court," she said. Brown doubted the rulings have implications for takings law outside the area of rent control. The next phase in the legal dance between property owners and regulators likely will be a challenge of California’s approach to takings claims. The state system requires a property owner who alleges that the application of rent control regulations is a taking to seek a state court order. If the court agrees that a taking has occurred, the court then orders the local government to consider a " adjustment." Under , 941 P.2d 851, the property owner may seek future rent increases as compensation for rents that the government kept too low. The mobile home park owners argued that adjustments were inadequate remedies. In the Morgan Hill case, owners of Hacienda Valley Mobile Estates sought a rent increase of $200 per month per space. The city’s Rent Control Commission approved an increase of $4.03 a month. The owners then filed a federal lawsuit alleging that the application of the city’s rent control law was a taking and a violation of the federal Civil Rights Act (42 U.S.C. § 1983). District Court Judge Ronald Whyte determined that Hacienda Valley had not met the ripeness requirements set forth in , 473 U.S. 172 (1985). Under , before a property owner can seek relief in federal court, the property owner must obtain a final administrative decision from the regulatory agency, and must seek compensation through state remedies unless doing so would be futile. Hacienda Valley appealed, and a unanimous three-judge panel of the Ninth Circuit upheld Judge Whyte. The property owners had clearly satisfied the first prong of the test by obtaining a final decision from the city. But the property owners had not sought compensation under the state system — the second prong The property owners first argued that their application to the Rent Control Commission satisfied the second prong of . The owners argued that the Commission’s refusal to grant the requested rent increase was both a completion of the taking, and a deprivation of compensation for the taking. But the Ninth Circuit rejected that argument. " taking and the pursuit of a remedy for the taking were not simultaneous in this case" Justice Proctor Hug Jr. wrote for the court. Hacienda Valley further argued for the futility exception, saying a adjustment was unconstitutional and that state courts are unconstitutionally deferential to the government. The property owners argued that simply going back to the same entity that denied the original rent increase would be pointless. The court rejected that argument because the property owners could not "direct us to, nor did our own research reveal, anything regarding how the adjustment process works," Hug wrote. As for deferential treatment, the property owners contended that state courts have been willing to find that a taking had occurred only when there was an "arbitrary regulation of property rights." The property owners argued that the correct standard was whether or not the regulation "substantially advanced" a legitimate state interest. Again, the court rejected the argument because the property owners could not point to a precedent that supported the contention. Hacienda Valley attorney Robert Coldren said the Ninth Circuit did not adequately address the question of the whether Morgan Hill’s application of its ordinance substantially advanced an appropriate public purpose. Moreover, the court also did not address the issue of who should pay compensation. The constitution requires the government to pay just compensation for a taking, while places the burden of compensation solely on future residents of a rent controlled property. "All of the just compensation in the world won’t cure the constitutional infirmity," Coldren said. "Thus, we shouldn’t have to go through the state courts." The same issue arose in the case from Carson, in which a concurring opinion appeared to bolster Coldren’s argument. Judge Diarmuid O’Scannlain wrote that "California’s procedures may not provide ‘just compensation’ because the burden of compensation falls not on the government as the representative of the benefiting general public, but on a select group of future tenants." "The Fifth Amendment," O’Scannlain wrote, "is violated when government attempts to lay the general public’s burden of just compensation on third parties." Still, O’Scannlain conceded this argument was speculative and he joined a unanimous three-judge panel that upheld Carson’s rent regulation. The case was filed after the Carson Mobilehome Park Rental Review Board granted owners of Carson Harbor Village a rent increase of $14.29 per space — less than 10% of the amount sought. The Carson Harbor Village owners sued and lost in district court. On appeal, the Carson Harbor Village owners contended and a follow up case, , 16 P3d 130 (see , March 2001) — in which the state Supreme Court said a property owner could receive § 1983 damages in state court only by showing that a rent ceiling had been confiscatory and a adjustment was inadequate — made it impossible to pursue takings or § 1983 lawsuits. Carson Harbor also questioned having the same body that rejected a proposed rent increase decide on a adjustment. "We acknowledge that Carson Harbor raises serious concerns about the adequacy of the new compensation procedures established in and ," Judge Raymond Fisher wrote for the court. "Nevertheless, the alleged inadequacy of the procedures remains highly speculative. Carson Harbor has not sought a writ of mandate and adjustment, nor has Carson Harbor identified any landowner who has sought and failed to receive adequate compensation through these procedures." The rulings are good for property owners, Coldren contended, because the Ninth Circuit treated the lawsuits as challenges to the cities’ application of the ordinances, rather than as challenges to the ordinances themselves. That distinction gives property owners far more time to sue, Coldren said. But Browne said the cities won by having the Ninth Circuit rule that such lawsuits belong in state court, which has well-defined processes for such claims, rather than federal court, where § 1983 claims can get messy. The Cases: , No. 02-15986, 03 C.D.O.S. 10855, 2003 DJDAR 13716. Filed December 17, 2003. , No. 02-56213, 04 C.D.O.S. 58, 2004 DJDAR 91. Filed January 2 2004. The Lawyers: For Hacienda Valley: Robert Coldren, Hart, King & Coldren, (714) 432-8700. For Morgan Hill: Donald Lincoln, Endeman, Lincoln, Turek & Heater, (619) 544-0123. For Carson Harbor Village: David Spangenberg, Spangenberg & Ritson, (707) 473-4340. For City of Carson: Rochelle Browne, Richards, Watson & Gershon, (213) 626-8484.