Wouldn't you know it? Right when the real estate market slows down, the land use initiative business is picking up. And, as is often the case, the initiatives – rather than clarifying things – are making things more confusing. Although localized in nature, the confusion will continue all the way through the emerging real estate bust and on to the beginning of the next boom. Land use ballot initiatives have always been a "lagging indicator" of the construction economy. That is, ballot activity becomes most intense at the end of a real estate boom, when entitlement activity is still frenetic and construction activity is beginning to slow down. That's because voters are most fed up about development after a long boom – and are usually moved to action right when the bust begins. And when that happens, they often decide to take matters into their own hands. Sometimes this makes sense, but often it doesn't -- as, for example, Escondido voters discovered after approving an initiative requiring voter approval of most general plan designation changes. They wound up having to vote in the next election on eight minor changes – and turned them all down (see CP&DR Insight , October 2000) Ballot initiatives often make the most sense when they craft or reinforce big-picture policies or when they are used to pressure elected officials on a particular issue that's important to a lot of voters. Even then, however, citizen groups get so wrapped up in their initiative that they're often unresponsive to compromise. Three different local situations during recent months – in Monterey County, Redondo Beach, and Ventura County – illustrate both the confusion, the frustration, and the hope that land use ballot measures in California have come to represent. In Monterey County, no fewer than four measures were on the ballot in June – including three involving different versions of a new general plan. The voters were presented with two general plan choices – the board's plan and the environmentalists' plan. Furthermore, the board's plan was presented as a positive and as a negative in two different measures. In the end, all measures went down, which apparently means the county defaults to the previous general plan that dates back to the early 1980s. Back to square one. By voting no, residents of Monterey County suggest they may not have realized what was really going on. It's also possible the voters really want the Board of Supervisors to make some tough choices. You'll excuse the leaders of Monterey County if they are not sure what the heck their residents want. Meanwhile, in Redondo Beach, the latest push for an initiative seemed to hold the potential to force the city into a compromise. But now a compromise appears unlikely. Like many beach towns in the South Bay of Los Angeles, Redondo has a long history of ballot-box zoning. Most recently, voters in 2005 were asked to decide the fate of a 65-acre parcel around the long-established AEP power plant on the beach. Asked to choose between a development project, called the Heart of the City plan, and a park, Redondo voters understandably chose a park (see CP&DR Election News , April 2005; Local Watch , January 2002). With no way to pay for such a park, however, the city started talking about development plans again, and this led to a backlash. A citizen group called Building a Better Redondo emerged with a ballot initiative that would require most major changes in the general plan to go to the voters. In particular, the initiative targeted any general plan amendment that converted non-residential land to residential or mixed-use with a density of 8.8 units per acre or more. This was clearly targeted at the Heart of the City property, where residential development is required to make any project work financially. Earlier this spring, the initiative fell 355 signatures short of qualifying for a ballot. Since then, the citizen group and Mayor Mike Gin have been involved in a set of moves that are part minuet, part power politics. They met once and since then have been negotiating over when, whether, and how to meet again, and there has been more than a little finger-pointing. The citizen group has filed a new initiative and plans to start gathering signatures again; meanwhile, Gin has indicated he might support a 45-day moratorium on rezonings while they negotiate. Whatever the merits of the case on either side, the Redondo citizen group has played its hand deftly, and in a way that other citizen groups should take note of. The group has succeeded in putting a lot of pressure on the elected officials and gives every indication of moving forward with the initiative to keep the pressure on. Sometimes, the nuclear threat is far more powerful than actually dropping the bomb. Meanwhile, in Ventura County – in many ways "ground-zero" for land use initiatives over the last decade – both developers and institutional landowners continue to search for ways around the urban growth boundaries that voters established a few years ago. History was made in May when Santa Paula became the first city to approve an expansion of the growth boundary for a mostly residential project. Local news reporters immediately jumped on the idea that this could be a trend – other residential projects have been defeated in Santa Paula and elsewhere – but the truth is the Santa Paula situation was unusual. Santa Paula is a poor city, and the proposed development (which has been on the ballot before) would contain about 500 very expensive hillside homes that could dramatically change the city's financial situation and its reputation. Hillside property owners in both Ventura and Moorpark still have designs on development in areas that require a vote, but those communities are more affluent and have historically been less receptive to even high-end development outside the boundaries. And at least one church appears ready to use its religious status to try to end-run the vote requirement. The 4,000-member Cornerstone Community Church has plans for a $40 million complex that includes a Bible college and a 5,000-seat auditorium on 140 acres of land in unincorporated county territory just outside Simi Valley and near the Reagan Library. The church plans to argue that it is exempt from the vote requirement under the federal Religious Land Use and Institutionalized Persons Act (RLUIPA), which exempts churches from land use regulations that "substantially burden" the exercise of religion unless a compelling public purpose is at work. Two previous growth boundary elections in Ventura have involved religious organizations – one involving a Catholic convalescent home outside Ojai and the other an Assembly of God church in Ventura. In both cases, the religious organizations organized a campaign and won. But it's hard to say whether RLUIPA would override the vote requirement in this case. After all, in strictly legal terms, all that has happened in Ventura County is that the voters have exercised their right under the California Constitution to substitute themselves for their elected officials in considering legislation that would allow development on land designated for open space. Would the vote requirement alone create a substantial burden? Should a federal statute trump the state constitution? These three situations are all examples of different approaches we often see in the field of land use initiatives – the train wreck, the negotiation, and the end-run. In all likelihood, ballot activity will taper off during the next couple of years, as so often happens after a real estate slow down settles in. Perhaps the downturn will give elected officials, initiative drafters and their lawyers the opportunity to use these situations to make land use policies clearer rather than more complicated.

Brewpub regionalism? That's the phrase that came to mind Saturday night as I listened to John Hickenlooper, the mayor of Denver, talk about how he operates. Nerdy geologist turned cool brewpub owner turned positive-thinking mayor, Hickenlooper is rapidly becoming a political legend. I heard him speak, along with Seattle Mayor Greg Nickels, at a dinner in Santa Monica sponsored by the Brookings Institution Metropolitan Policy Program in conjunction with the U.S. Conference of Mayors conference. Among other things, Hickenlooper has improved the relationship between Denver and its suburban cities – traditionally a situation that could best be described as Iraq minus the militias and most of the checkpoints. The better relationship is one of the reasons the Denver area has approved a sales tax increase to build a 120-mile rail transit system. Hickenlooper's technique is best described as the "no mayor left behind" approach. He approached to the suburban mayors who historically hated Denver. He talked to them. He asked them if they could support joint initiatives if he let them take all the credit. He discussed with them why a regional rail transit system might help them even if they don't get transit stations because it would get other cars off the road. By the time the transit measure was on the ballot, he said, all the mayors "had a skin in the game." It's hard to imagine Antonio Villaraigosa having these kinds of conversations with the mayors of Pasadena, Huntington Park, and Anaheim. Hickenlooper said that the restaurant business is the best training for politicians. As a policy wonk who has spent a lot of time hanging around with restaurateur-politicians, I have to agree. Think about it. Restaurant owners have to be extroverts. They're in the business of making other people happy by giving them food and drink. They get instant feedback from their customers. And they are constantly tweaking everything – their menu, their service, their atmosphere – to make the experience of patronizing their restaurant better. They also know the value of alcohol in reaching consensus. Maybe it's time more metropolitan political leaders practiced brewpub regionalism. At least on the consumer side. - Bill Fulton

The California Supreme Court has ruled that an airport land use compatibility plan qualifies for a "common sense" exemption from the California Environmental Quality Act. Perhaps more importantly, the court opened the door for the first time to the idea that displacement of development — often an arguable consequence of a plan that favors one type of development over another — might be an issue that should be analyzed under CEQA. Because the Travis Air Force Base Land Use Compatibility Plan (TALUP) merely incorporated existing county and city general plan and zoning policies, it created no new impacts and therefore need not receive environmental scrutiny, the unanimous state high court ruled. However, the ruling was not exactly straightforward. First, the court found that the Solano County Airport Land Use Commission made a number of errors. The Commission incorrectly concluded the plan was not a "project" for CEQA purposes, the court found. Yet the Commission did file a notice of exemption, even though no such notice is required for non-projects. But the notice claiming a common sense exemption cited no evidence. Second, the common sense exemption was a subject that had not been debated in any detail at the trial court and appellate court levels. Neither side mentioned the common sense exemption in briefs for the state Supreme Court, although justices did ask several questions about it during oral arguments (see CP&DR Legal Digest , May 2007). In addition, the court applied the "substantial evidence test" for the exemption, even though the CEQA Guidelines and previous cases suggest that an exemption is not appropriate if an argument can be made that a project may have a significant effect on the environment. The case could turn out to be significant for a different reason, however. The court made clear that an agency must consider during environmental review the potential for a project to displace development to other locations. " othing inherent in the notion of displaced development places such development, when it can reasonably be anticipated, categorically outside the concern of CEQA," Justice Kathryn Werdegar wrote for the court. That statement marks the first time that a court has recognized that the unintended consequence of displacing development is a potential CEQA impact, said Richard Jacobs, the attorney for property owners who lost the case. Deputy County Counsel James Laughlin said the court's stance on displaced development presents difficulties. Any zoning, whether it be agricultural, industrial, or residential, potentially displaces some other form of development, said Laughlin, who argued the case for the airport panel. "It's a good result for the Commission but it's an interesting opinion," Laughlin said. "We always argued it was not a project. The court went off on a tangent," Laughlin added in reference to the common sense exception. Development around Travis Air Force Base in Fairfield has long been controversial. Although some adjacent areas are heavily developed, much of the territory around the base is pastureland or open space. Some locals fear that additional urban encroachment would force Travis, the county's largest employer, to close (see CP&DR Elections , December 2003; Local Watch , September 2003). Still, housing pressures are substantial. In 2002, the Airport Land Use Commission adopted the Travis plan. Under the State Aeronautics Act, city and county general plans must conform with airport land use compatibility plans unless the city or county can make specific findings that the discrepancies are consistent with the act. The TALUP sets forth compatibility factors for six geographic zones. At issue here was "zone C," which covers locations exposed to an average of at least 60 decibels of noise over a 24-hour period (known as the 60 db CNEL standard) or to rare concentrations of low-level flights. Zone C covers more than 600 square miles of unincorporated Solano County and four cities. The airport plan called for freezing existing general plan and zoning designations for zone C, the majority of which is unincorporated land designated for agriculture. Muzzy Ranch Company, which owns about 5,000 acres inside and outside of zone C, sued because the Commission performed no environmental review of the plan and, according to the landowner, used the wrong noise standard. Solano County Superior Court Judge Donald Fretz ruled for the Commission, but the First District Court of Appeal overturned the decision because the plan could force needed housing development to move elsewhere, and "housing displacement is a physical change that may require discussion in an EIR." The state Supreme Court agreed with the appellate panel to a point but ultimately reversed the decision. The Commission argued that the plan is not a project because the TALUP merely advises jurisdictions and the Commission had no duty to consider displaced development because such displacement was too speculative. The court rejected both arguments. An airport land use plan is more than nonbinding advice, the court noted. The TALUP states that it shall be the basis for local general plan, zoning and land use policies, and state law binds the cities and counties to comply with the plan or at least the aeronautics act. "As Muzzy Ranch observes, under these statutes an airport land use compatibility plan can operate like a multi-jurisdictional general plan to trump the land use planning authority that affected jurisdictions might otherwise exercise," Werdegar wrote. On the issue of displaced development, the court cited Fullerton Joint Union High School Dist. v. State Bd. of Education , (1982) 32 Cal.3d 779, in which the court rejected the argument that dividing a school district could not be a project simply because other decisions would have to be made before environmental effects were realized. "Depending on the circumstances, a government agency may reasonably anticipate that its placing a ban on development in one area of a jurisdiction may have the consequence, notwithstanding existing zoning or land use planning, of displacing development to other areas of the jurisdiction," Werdegar wrote, later stating "geographically distant environmental impacts" must also be considered. As for the common sense exemption, the Commission cited no evidence in support. No matter, the court ruled. "Determining whether a project qualifies for the common sense exemption need not necessarily be preceded by detailed or extensive fact-finding. Substantial evidence appropriate to the CEQA stage in issue is all that is required." Jacobs, the landowner's attorney, said he felt as if he "lost the war but won all the battles" in that the court found that the Commission made numerous errors, but they did not matter in the end. Arthur Coons, an attorney at Miller, Starr & Regalia in Walnut Creek who did not participate in the case, agreed that the court's reasoning was "odd." But the decision is important, he said, because the court "recognized displaced development as cognizable under CEQA" and made clear that impacts are not limited by jurisdictional boundaries. Those are important factors when a city or county is considering downzoning, urban growth boundaries or other development limitations, Coons said. Ellen Garber, of Shute, Mihaly & Weinberger and also not a participant in the litigation, said that although the court raised the issue of "displacement of things that don't exist," the court broke no new ground. Displacement of development "is not squarely raised in this case," Garber said. "They talk about it, but they don't decide it." Future courts will need to provide a more plain reading of the issue, she said. Jacobs said he would now press forward in appellate court with Muzzy Ranch's arguments regarding the proper noise contour for the TALUP; however, Laughlin noted the state Supreme Court did not remand the case for more proceedings. "I think the implication is this is the end of the line," Laughlin said of the decision. The Case: Muzzy Ranch Co. v. Solano County Airport Land Use Commission , No. S131484, 07 C.D.O.S. 7166, 2007 DJDAR 9275. Filed June 21, 2007. The Lawyers: For Muzzy Ranch: Richard C. Jacobs, Howard, Rice, Nemerovski, Canady, Falk & Rabin, (415) 434-1600. For the Commission: James W. Laughlin, Solano County counsel's office, (707) 784-6140.

Little appears to have happened since local government organizations and their supporters rolled out an eminent domain reform package that they said would protect homeowners and small businesses from government abuse. The May 21 announcement from the California Redevelopment Association and the League of California Cities got extensive press coverage, and the proposed legislation won plaudits from several newspapers, including the Los Angeles Times . A number of business and environmental groups said they would support the measures. However, the two bills, ACA 8 and AB 887, both of which are being carried by Assemblyman Hector De La Torre (D-South Gate), are not scheduled to receive their first committee hearings until July. Still, De La Torre said that he intends to move the legislation this year so voters will have the opportunity to decide on the reforms next year. Because it is a constitutional amendment, ACA 8 needs support from two-thirds of lawmakers to reach the ballot. That means the measure will need at least some Republican votes. De La Torre said he's been negotiating with GOP members. While conceding that he has not talked to the Schwarzenegger administration about the legislation, De La Torre said about one-third of Republican lawmakers are "very receptive" and have asked for only minor amendments. "Their requests have been completely reasonable. Some of their requests have been only clarifications," said De La Torre. As currently proposed, ACA 8 would prohibit the government from taking an owner-occupied house by eminent domain and then conveying the property to another private entity — essentially, an economic development project. A small business could be taken for an economic development project only after the small business owner was given the opportunity to participate in the redevelopment project. In addition, a property owner whose home or small business is taken would have the right to repurchase the property if the government does not use the property for its originally stated purpose. Assembly Bill 887, meanwhile, would make procedural changes to increase the amount that the government — redevelopment agencies, mostly — would have to pay small business owners whose property is taken by eminent domain. The homeowner protections are also contained in a proposed initiative backed by the League of California Cities. At the same time, the Howard Jarvis Taxpayers Association continues to refine its own, broader eminent domain initiative, which would also apparently prohibit rent control. The attorney general's office is reviewing the latest version. All of this activity is the direct result of the U.S. Supreme Court's decision two years ago in Kelo v. City of New London , in which the court upheld the use of eminent domain for an economic development project. Actually, all of these proposals are the result of reaction to Kelo , as the court ruling itself had no effect in California. "There is a fear in the public that the government could abuse eminent domain," De La Torre said. "I believe it is something that needs to be addressed."

The toads of Davis have never figured out how to use the tunnel built a dozen years ago just for them. Or they can't find it. Or they've died out. Or they just don't want to. In any event, city officials in the college town of Davis, California, recently told the Sacramento Bee that not a single toad has ever hopped through the 220-foot-long "toad tunnel" built underneath Pole Line Road as part of construction of an overpass above Interstate 80. The toad tunnel got national publicity at the time and even prompted a local author to write a book called The Toads of Davis , apparently a touching story about how the community pulled together to save the toads. Over the past 20 years, California has been at the forefront of balancing urban development with the protection and restoration of natural areas. But as wildlife biologists and land-use planners alike are finding, you can lead a toad to a tunnel, but you can't make him hop. Urban and suburban development patterns operate in a very fixed set of spaces. Even in the age of mixed-use projects, we tend to think of land as either developed or undeveloped, residential or commercial, public or private. Planners in particular usually see a landscape as a series of colors on a map, all depicting different land uses. So when planners, developers, and even many biologists begin to think about how to work nature into this equation, they use the same prism. We find a particular portion of the landscape where we think wildlife or water or wetlands should go and we set that territory aside. Or we conduct research to see where these natural assets are now, and we assume that this is where they'll stay. But natural systems are volatile by nature. They may follow general patterns, but they don't operate in a fixed space the way urban land uses do. Rivers meander and flood. Wetlands dry up sometimes. Birds and rodents – and toads – don't always turn up in the same place. Back in the '90s, when developers and government officials were creating a large set of preserves in Southern California for endangered birds such as the California gnatcatcher and the cactus wren, I was struck by what one wildlife biologist told me when I described the whole effort. "They're just creating a gnatcatcher theme park," he said. "Just because they set aside the land, there's no guarantee that the birds will show up." His bottom line – one confirmed for me by many scientists since – is that all we can do is set aside the land and pray. Davis officials have provided all kinds of hypotheses as to why the toads never used the tunnel. It's too long. It's too small. It's too dark. It's too hot. Any or all of these might be true. But it may also be that the toads simply didn't bother to read Davis's circulation element and therefore didn't realize they were supposed to use the tunnel. After all, it remains to be seen whether the gnatcatchers and the cactus wrens will read the multi-species habitat conservation plan and figure out where they're supposed to nest. A little cynical, I know. But you get the point: There's a difference between the way nature operates and the way planners, developers, and engineers think. Just because an area is set aside for birds doesn't mean the birds will go there. And just because an area nearby is developed doesn't mean the birds won't go there. By setting aside land for nature, we don't necessarily preserve; and by constructing buildings we don't necessarily eradicate nature. While dealing with strict stormwater runoff regulations, many planners are getting a rapid introduction to the difference between urban land use ideas and nature's ways. When you think about stormwater – where it goes, what it picks up, how it percolates – you find that there's more to a community than only colors on a map depicting different land uses. As any dope who can use Google Earth has learned, there's all kinds of textures within each color – parking lots and buildings and trees and sidewalks and gravel driveways and so forth. Nature interacts with the human landscape in a dozen different ways inside every color that planners put on a map. So maybe instead of learning how to divide the world into our land and nature's land, it's time to learn how to share the land so that even the most urban place still allows natural systems function well. Maybe then the Toads of Davis will finally show up. - Bill Fulton

Monterey County voters must be wondering what the point is. They keep voting on land use ballot measures, but the votes resolve nothing. A Coastal Commission decision on Wednesday, June 13, provides the latest example. The Commission voted 8-4 to reject the Pebble Beach Company's Del Monte Forest plan — a plan that 62% of Monterey County voters approved in 2000. The plan would permit development of a golf course and hotel, about 30 high-end houses and some worker housing, while providing permanent protection for about 800 acres of Monterey pine forest elsewhere (see CP&DR Environment Watch , July 2005). The Coastal Commission voted 8-4 against the plan, even though it had the support of Commissioner Dave Potter, a slow-growth supervisor from Monterey County who represents the Monterey Peninsula. Potter argued that the plan was environmentally superior to a 1984 local coastal plan, which would permit much of the property in question to be chopped up into nearly 900 large lots for new houses. However, the Commission majority sided with staff members, who said the Pebble Beach Company's plan would result in unacceptable destruction of healthy stands of Monterey pines and fragile coastal habitat. The Coastal Commission staff report goes over the plan in 197 pages of excruciating detail. You can find coverage of the Commission's meeting in the Los Angeles Times , the San Jose Mercury News , and the Monterey County Herald . But back to my original point. The Coastal Commission decision came only eight days after Monterey County voters cast ballots on four land use measures . Results of two measures conflicted, as voters said they did not want to throw out a general plan update adopted by the county (Measure B) yet they did not want to upheld the plan either (Measure C). People must be scratching their heads. On the same ballot was Measure D, a referendum on a project that voters rejected, in a different form, less than two years earlier. The project lost again at the polls last week, and is now headed for Monterey County Superior Court. Monterey County voters have gotten accustomed to voting on major land use issues. What they haven't gotten used to is deciding major land use issues. - Paul Shigley

A unanimous California Supreme Court has upheld a local zoning ordinance that regulates who may sell furniture. The decision appears to bolster local zoning decisions that have come under attack from developers and retailers, especially those promoting big-box stores. In a detailed discussion, the court made clear that a zoning ordinance's regulation of economic competition is inconsequential as long as the ordinance promotes a legitimate public purpose. Although the decision could boost cities' big-box zoning ordinances, the case at hand involved owners of a small furniture store in the City of Hanford. They challenged an ordinance that restricted furniture sales in an outlying planned commercial (PC) zoning district, where the owners opened a 4,000-square-foot mattress and home furnishings store. The city adopted the ordinance in order to protect the viability of its downtown, where there are about a dozen furniture stores. "In the present case, it is clear that the zoning ordinance's general prohibition on the sale of furniture in the PC district — although concededly intended, at least in part, to regulate competition — was adopted to promote the legitimate public purpose of preserving the economic viability of the Hanford downtown business district, rather than to serve any impermissible private anti-competitive purpose," Chief Justice Ronald George wrote. " he zoning ordinance's restrictions are aimed at regulating ‘where, within the city' a particular type of business generally may be located, a very traditional zoning objective." The court also rejected the furniture store owners' contention that an exception — which permits retail stores of at least 50,000 square feet in the PC zone to dedicate up to 2,500 square feet to furniture sales — violates the equal protection clauses of the federal and state constitutions. The court found that the city had a rational reason for creating the exception. "It really is a good day for local democracy," said attorney Steven Mayer, who argued the case for Hanford at the state Supreme Court. The decision "was even better than I hoped for," he added. "It will restrict the ability of developers to challenge zoning decisions. It gives cities a lot more comfort." Attorney Russell Ryan, who represented the furniture store owners, told the San Francisco Chronicle that the decision was a rubber-stamp for local government. "Local elected officials may have a bias or animus against a particular entity or they may have a purely private reason for making that decision, but as long as they state a public reason, they won't be questioned," Ryan told the Chronicle . Hanford first adopted an ordinance regulating furniture sales in 1989, at about the same time the city designated the PC district elsewhere in town to accommodate a mall and big-box stores. Some of the new department stores and big boxes proceeded to sell furniture, but the issue did not get controversial until early 2003, when Adrian and Tracy Hernandez opened Country Hutch Home Furnishings and Mattress Gallery in the PC zone. A city inspector informed the owners that they were violating the city's ordinance. After they protested, it became evident that the ordinance was unclear, so the City Council conducted a series of study sessions. In July 2003, the council adopted a revised ordinance that generally prohibits the sale of furniture in the PC district, except for 2,500-square-foot displays in stores of at least 50,000 square feet. The Hernandezes filed a lawsuit claiming the ordinance was invalid because its primary purpose was the regulation of economic competition and because it violated the state and federal constitutions' equal protection clauses. A trial court judge ruled for the city, but the Fifth District Court of Appeal struck down the ordinance because the disparate treatment of large and small stores in the same zone "does not bear a rational relationship to the goal of preserving downtown Hanford" (see CP&DR Legal Digest , May 2007 , May 2006 ). Although neither lower court accepted the Hernandezes' arguments regarding economic regulation, the state Supreme Court dealt with the issue at length, in part to "clarify" three earlier appellate court decisions: Van Sicklen v. Browne , (1971) 15 Cal.App.3d 122, Ensign Bickford Realty Corp. v. City Council , (1977) 68 Cal.App.3d 467, and Wal-Mart Stores, Inc. v. City of Turlock , (2006) 138 Cal.App.4th 273 (see CP&DR Legal Digest , May 2006 ). In Van Sicklen , the court upheld the City of Milpitas's denial of a conditional use permit for a proposed automobile service station because the area already had a proliferation of service stations. However, some of the language in Van Sicklen "is ambiguous and at least potentially misleading" and could be used to support an argument that a zoning regulation is invalid if it impacts economic competition, George wrote. Ensign Bickford involved the City of Livermore's refusal to rezone land for a proposed shopping center, a decision the court upheld as serving the public's interest in controlling the pace and location of growth. In Wal-Mart , the court upheld Turlock's ordinance that effectively prohibits big-box stores from selling groceries, an ordinance the city adopted because such stores could create urban blight by forcing closure of existing supermarkets. "As the circumstances underlying the decisions in Ensign Bickford and Wal-Mart demonstrate," George wrote, "even when the regulation of economic competition reasonably can be viewed as a direct and intended effect of a zoning ordinance or action, so long as the primary purpose of the ordinance or the action — that is, its principal and ultimate objective — is not the impermissible private anti-competitive goal of protecting or disadvantaging a particular favored or disfavored business or individual, but instead is the advancement of a legitimate public purpose — such as the preservation of a municipality's downtown business district for the benefit of the municipality as a whole — the ordinance reasonably relates to the general welfare of the municipality and constitutes a legitimate exercise of the municipality's police power." "To the extent that any language in Van Sicklen , Ensign Bickford or Wal-Mart may be interpreted as inconsistent with this conclusion, such an interpretation is disapproved," the court ruled. The court then turned to the issue of equal protection. What was important to the court was the ordinance's intent to serve multiple purposes — the preservation of downtown's viability and the city's ability to attract and retain large department stores that sell furniture. "Past cases establish that the equal protection clause does not preclude a government entity from adopting a legislative measure that is aimed at achieving multiple objectives, even when such objectives in some respects may be in tension or conflict," the court ruled. "Because the city viewed large department stores as particularly significant elements of the PC district, and because the management of those stores had made clear the importance to them of retaining their ability to offer furniture sales that typically were offered by their sister stores in other locations, it was rational for the city to decide to provide an exception from the general prohibition of furniture sales in the PC district for such large stores and only such stores," George wrote. The Court of Appeal's decision "would have undermined the ordinance's overall objective of permitting the sale of furniture in the PC district only to the extent such activity is necessary to serve the city's interest in attracting and retaining large department stores in the district," George concluded. The Hernandezes, who have been assisted by property rights advocates at Pacific Legal Foundation, are reportedly considering an appeal to the U.S. Supreme Court. The Case: Hernandez v. City of Hanford , No. S143287, 07 C.D.O.S. 6554, 2007 DJDAR 8348. Filed June 7, 2007. The Lawyers: For Hernandez: Russell Ryan, Motschiedler, Michaelides & Wishon, (559) 439-4000. For Hanford: Steven Mayer, Howard, Rice, Nemerovski, Canady, Falk & Rabkin, (415) 434-1600. Download the decision at: http://www.courtinfo.ca.gov/cgi-bin/opinions.cgi

I was walking down Broadway in Oakland the other day. And I was terribly disappointed. I hadn't been on Broadway, downtown Oakland's most important boulevard, in six years. Since then, I had heard a great deal about dreams and schemes to "bring Oakland back," including Jerry Brown's ballyhooed proposal for 10,000 new housing units. But the Broadway I found was not much different from the Broadway of six years ago, or 16 years ago, or even 26 years ago. Vacant storefronts. Garbage. Plentiful surface parking. Old buildings begging for investment. I was in town to attend a concert at the Paramount Theatre, a beautifully restored Art Deco facility at 21st and Broadway. After the show, 1,500 people spilled out onto Broadway. The night was young, or at least it could have been. The weather was warm, and music fans were still buzzing from a good show. But the sidewalks of downtown Oakland had been rolled up. After milling around in front of the Paramount for a few minutes, some people started heading for the BART station. The rest of us got in our cars and drove away. - Paul Shigley

Why did nobody tell me that market-rate housing had become a NIMBY issue? Did I sleep through this momentous event, just as I sawed a log through the Northridge earthquake? Here I am, bumbling through life as if nothing special is happening, while unbeknownst to me The Walt Disney Company is having one of its most creative moments since it released Dumbo. Unfortunately, that legendary creativity has gone into cooking up the notion that housing is somehow inappropriate, even damaging, to a resort area. My only hope is that places like Aspen or Tahoe or Biarritz, where condos are as plentiful as pinecones, do not find out about the bad effect that housing poses to resort communities. I tremble to think of the peril to property values! No matter. Disney has campaigned vigorously against a 1,500-unit housing development proposed by SunCal, an Orange County homebuilder, slated for a site now containing two mobile home parks near Disneyland and related attractions. Fifteen percent of SunCal's units (a whopping 225 in all) are earmarked for low-income people, such as the majority of Disneyland employees. The rub is that the new housing would overlap a district known as the Anaheim Resort. This area includes the Disney attractions as well as the city's convention center and surrounding touristy areas. With landscaping and signage work completed in 2001, Anaheim's resort district is a workable solution to the problem of tackiness and blight, such as motels with cartoon motifs in their blinking neon signs, that sprouted in this former farm town during the 52 years since the founding of Disneyland. The resort district regulations and public investments eliminated most of the kitsch, and provide a green and pleasant backdrop for the Disney attractions in Anaheim, which by now include Disney's California Adventure and the Downtown Disney shopping-and-dining venue. New design guidelines provide grass and landscaping where concrete and asphalt pavement formerly simmered in the sun. The same guidelines forced hotels and restaurants to modify their signage, and sometimes even their facades. In short, the resort district is a victory for Disney's quest for total control of its environment. Better yet for Disney, the improvements to the resort area were built on the public's dime, even though the city's general fund is a tiny fraction of the company's market cap. Disney thinks housing is bad for business, and that hotels would be a better idea than housing. The problem is that Anaheim, like California as a whole, has been plagued by a housing deficit for decades and demonstrably needs housing more than any other type of development. The "stark reality" is that the city needs 27,600 affordable housing rentals, Councilwoman Lori Galloway, one of the most vocal supporters of the housing development, wrote in an April 15 editorial in the Orange County Register . In lieu of finding any affordable housing in the city, many local service workers are living in motel rooms, often with several families sharing a single mailbox. Disney officials are so peeved with Ms. Galloway for her support of the housing, by the way, that security guards escorted her off Disney property earlier this year following a television interview, and promised to arrest her if she had the temerity to return. This contemptuous treatment of an elected official in her own city says much about Disney's regard for local government. (Disney's own Celebration development in Florida has no elected officials.) Disney obviously believes that housing will slip a mickey to the Magic Kingdom. "Allowing residential development in the Resort Area will stunt future growth of the local economy and significantly reduce future tax revenues," said Rob Doughty, Disneyland Resort spokesman, in a prepared statement before the City Council approved the project on a 3-2 vote on April 25. When Doughty mentioned stunting "growth," however, he was likely speaking in code. What he really meant to say, I believe, was that SunCal intends to build a slum at the doorstep of Disneyland. Almost immediately, Disney said it had already collected 20,000 signatures to put the project up for referendum. The equation of low-income housing with crime-ridden slum is the traditional view of the frightened suburbanite, who thinks that "low-income household" is liberal-ese for shiftless, dark-skinned people who fill their backyards with chickens and broken washing machines and their front yards with junked cars, while they sit around drinking beer and listening to heartbreak songs in some foreign language. The Register is filled with fearful letters to the editor. One concerned citizen writes about an "affordable housing complex" in north Anaheim, where "every patio was jam packed with clutter, rusted appliances and moldy clothing and storage boxes etc." Later, walking outside one night, he sees "what looked like a drug deal between a resident of the complex and a dealer!" Another correspondent believes the city is spending too much money on poor people: "I wish the county would intervene with this relentless city and say enough with the wasting of taxpayers (sic) money start putting it towards your current residents." Anaheim residents, he adds, have "been neglected for this small percentage of poor people and it is sickening." It is difficult to avoid the conclusion that Disney is encouraging this level of fear and hostility, particularly among the small business owners who depend on Disney, and who have developed something of a Stockholm Syndrome when the Big Mouse squeaks. Why is Disney so averse to housing? I think it is the fear of losing control of its surroundings. The company, of course, has a legitimate interest in the design and compatibility of the housing. Rather than negotiate with the developer like a civilized organization, however, Disney wants to put the kibosh on the entire housing effort simply because Disney itself neither owns nor controls it. The desire for control like other human appetites, can never be fully satisfied. I recommend that Disney recognize its limitations, take a deep breath and direct its attention to more profitable ventures. Just as urban plans were made to have exceptions, the illusion of control was made to be frustrated.

The California Supreme Court has upheld the constitutionality of the state's "quick take" eminent domain process in which a public agency may take ownership of a property before a trial on final compensation for the property owner. The case was brought by Azusa Pacific University. In October 2000, Mt. San Jacinto Community College District commenced an eminent domain action to acquire 30 acres owned by Azusa Pacific in Riverside County. Two months later, the district deposited $1.789 million into court as probable compensation and applied for a prejudgment order of possession — a quick take. The court approved and the district took possession in January 2002. The university disputed the $1.789 million figure and the trial court eventually ruled that the value should be set to coincide with the start of the trial on the question of valuation, which was in December 2004. Between 2000 and 2004, property values increased dramatically. An appellate court reversed the trial court and said the date of valuation was December 2000, when the district deposited the funds for a quick take. At the state Supreme Court, Azusa Pacific argued that the quick take process put the university in the untenable position of having to choose between constitutional rights. The university could withdraw the deposited funds but, under the law, would then be precluded from litigating the legality of the taking itself. If it did not withdraw the funds, the university could litigate the taking, but the district would still have ownership of the property, meaning the university would have neither its property nor just compensation. But a unanimous state Supreme Court ruled that the process is constitutional. "The only constitutional limitations on the right of eminent domain are that the taking be for a public use, and that just compensation be paid," Justice Ming Chin wrote for the court. "The university does not claim that the condemnation is not for a public use. In addition, § 1255.260 does not require waiving a claim for greater compensation with withdrawal of the deposit. Thus, the university is not being forced to waive a constitutional right." "The condemner has a right to immediate possession of the property," Chin continued, "and made a deposit of probable compensation. The owner had the right immediately to withdraw that deposit. The existence of conditions on withdrawal on the owner's solely statutory right to further litigate the legality of the taking does not deny the owner just compensation." The court also upheld the earlier valuation date. If valuation were delayed, the court noted, "owners in a rising real estate market would have a considerable incentive to delay proceedings." The Case: Mt. San Jacinto Community College District v. Superior Court of Riverside County , No. S132251, 2007 DJDAR 2399. Filed February 22, 2007. The Lawyers: For the district: David Hubbard, Redwine & Sherrill, (951) 684-2520. For Azusa Pacific University: Michael Berger, Manatt, Phelps & Phillips, (310) 312-4000.

An appellate court has thrown out a property owners' lawsuit claiming that the Town of Tiburon's special assessment to pay for undergrounding utilities violated Proposition 218. The court ruled that the lawsuit was actually a "reverse validation action," and that the property owners failed to meet procedural deadlines. The property owners contended that they should be able to contest the assessment as a violation of Proposition 218 and not be bound by the strictures of the validation statutes. But a unanimous three-judge panel of the First District Court of Appeal, Division Three, disagreed. "The validation statutes and Proposition 218 address different concerns. Whereas Proposition 218 mandates compliance with certain procedures before a special assessment may be levied, the validation statutes provide rules of procedure for legal actions challenging an assessment after its adoption," Presiding Justice William McGuiness wrote for the court. Four years ago, the Tiburon Town Council decided to start putting together the Del Mar Valley Utility Undergrounding Assessment District based on the Municipal Improvement Act of 1913. A subsequent engineer's report found that placing the utility lines underground would provide aesthetic, service reliability and safety benefits to owners of about 220 properties. In May 2005, the town conducted an election in which 71% of property owners approved the proposed assessment district. On June 16, 2005, the owners of two properties in the district — including Jean Bonander, city manager of nearby Larkspur — sued Tiburon. They argued the assessment of $31,146 was excessive, there was no substantial evidence that placing utility lines underground would benefit their properties, and the city's process was faulty. The property owners sought to invalidate the town's approval of the district. Fifty-nine days later, the property owners' attorney "discovered" that validation statutes may apply. Those laws require litigants to follow special procedures, including preparing a summons directed to "all persons interested" and publication of the summons in a newspaper of general circulation within 60 days of filing the suit. The property owners made a last-minute attempt to comply but missed the 60-day deadline. The town then filed a motion to dismiss the lawsuit, which a Marin County Superior Court granted. The court found that the lawsuit was subject to the validation statutes, that the property owners did not comply with the statutes, and that there was no "good cause" for the failure to comply. On appeal, the First District upheld the lower court. The Legislature approved the validation statutes (Code of Civil Procedure § 860 et seq.) during the early 1960s. Under the laws, a public agency may bring a lawsuit to get a court ruling on whether the agency's action is legal. Any "interested person" may bring a similar suit, which is called a "reverse validation action." A ruling in such suits is intended to preclude further litigation over the action. Proposition 218, meanwhile, was a 1996 follow-up to Proposition 13 and requires a vote on tax increases, special assessments and fees. There was little dispute that the Tiburon property owners failed to comply with the validation statutes' requirements relating to summons and publication. The real question, according to the First District, was whether the validation statutes applied. Not all local government actions are subject to validation. However, an assessment based on a 1913 Municipal Improvement Act district qualifies, the court ruled. The property owners argued that they sought a remedy for only their properties — and not a ruling on the entire assessment district — but the court rejected this contention. "The special assessment on appellants' properties was not levied in isolation and without regard to other properties in the district," Justice McGuiness wrote. The fact that they were contesting the assessment as a violation of Proposition 218 did not matter, McGuiness added. "A property owner may seek to invalidate a special assessment on the ground the procedures leading to the assessment's adoption violated Proposition 218. The nature of the action is dictated by the statutory scheme, such as the 1913 Act, under which the assessment was levied," McGuiness wrote. "In the case of the 1913 Act, such a proceeding must be filed as a reverse validation action. This is so regardless of whether the challenge is premised on asserted violations of Proposition 218 or any other constitutional provision." The property owners argued that because the issue of whether the validation statutes applied was "complex and debatable," the property owners had good cause for failing to comply with procedural requirements. But the court said, "The issue is neither complex nor debatable. … It is well settled." Although the First District ruling apparently ends one round of litigation over the Tiburon assessment district, a second suit was filed in 2006 over a supplemental assessment district formed to cover rising costs. According to the city, 56% of property owners approved the supplemental district; however, a suit filed by about 30 property owners alleges vote tampering by the city. In the meantime, the undergrounding project remains on hold. The Case: Bonander v. Town of Tiburon , No. A112539, 07 C.D.O.S. 1935, 2007 DJDAR 2463. Filed January 31, 2007. Ordered published February 22, 2007. The Lawyers: For Bonander: Frank I. Mulberg, (415) 388-0605. For Tiburon: Thomas R. Curry, McDonough, Holland & Allen, (510) 273-8780.

Claims of taking and due process violation filed by a Ventura mobile home park owner who was denied rent increases have been rejected by the Second District Court of Appeal. The unanimous three-judge panel ruled that the trial court correctly dismissed the taking claim after deciding that rent increases granted to the park owner fell within a "broad zone of reasonableness." The Second District also ruled that procedural decisions of the trial court and Ventura's Rent Review Board did not deny the landlord due process. In early 2003, the owner of the 125-space Stardust Mobile Estates submitted an application for rent increases under Ventura's rent control ordinance. Stardust requested increases of $9.95 to $12.19 per month based on inflation and $16,000 worth of driveway repair and replacement expenses. Stardust also sought an increase of either $300 per month because rent control had provided tenants with tens of thousands of dollars in "premiums," or $50.50 because the landlord had not received past increases based on the full rate of inflation. Stardust further sought a $24 increase in the base year rate, which was established in 1981 when the city adopted rent control. In May 2003, the city's Rent Review Board approved rent increases of $9.23 to $9.70 based on inflation but rejected all other requested rent hikes. Stardust then filed a lawsuit challenging the rent board's decisions, and contending that the board had violated the park owner's due process rights and caused a taking of private property. Ventura County Superior Court Judge Henry Walsh ruled against the property owners but directed the city to increase rents based on the park owner's driveway maintenance expense. Ever since rent control became common during the 1970s, property owners have claimed that limited rent increases posed an unconstitutional taking. Property owners generally have not gotten far in court, but there was a brief period earlier this decade when they appeared to gain. In 2004, the Ninth U.S. Circuit Court of Appeals ruled the City of Cotati's mobile home rent control law was unconstitutional because the possibility existed that tenants might receive what amounted to a transfer of equity when selling their units in a rent-controlled park. For this reason, the court found that the ordinance did not "substantially advance" the goal of providing affordable housing. ( Cashman v. City of Cotati , 374 F3d 887; see CP&DR Insight , October 2004; CP&DR Legal Digest , September 2004). The Ninth Circuit's ruling in Cashman threw into doubt most mobile home rent control laws in California. However, less than a year later, the U.S. Supreme Court ruled in Lingle v. Chevron U.S.A., Inc. , (2005) 544 U.S. 528, that the "substantially advances" test does not apply when a court is determining whether a regulation effects a taking (see CP&DR , July 2005). The Lingle decision appeared to close the legal door that the property owners had kicked open; Judge Walsh cited Lingle in ruling against Stardust Mobile Estates. On appeal, Stardust argued that Lingle did not affect its taking claim, which it said was based on Penn Central Transp. Co. v. New York City , (1978) 438, U.S. 104. A Penn Central claim requires a court to consider the economic impact of a regulation on the property owner, the regulation's impact on "distinct, investment-backed expectations," and the character of the government action. Stardust argued that it was entitled to a trial on the Penn Central claim, which Judge Walsh had dismissed. The Second District found that Stardust's claim was based in part on the substantially advances test, and that the lower court handled things correctly. " he trial court concluded that substantial evidence supported the rent board's decision except for its ruling on driveway expenses, and the court remanded the case to the rent board which granted Stardust compensation — a rent increase that included the driveway expense, plus interest on those expenses," Justice Paul Coffee wrote for the court. " he court necessarily considered the factors that our state Supreme Court indicates must be considered in evaluating Penn Central taking claims. The court concluded that Stardust had no taking claim and correctly decided that the rent increase granted to Stardust provided it with a return that fell within the requisite ‘broad zone of reasonableness.' Having done so, the court properly dismissed the taking claim." The appellate court also rejected Stardust's contention that it was denied due process because it could not cross-examine witnesses during a Rent Review Board hearing or discover additional evidence at the trial court level. The court did rule for the property owner in one key area, though. Stardust sought a "Vega" adjustment to its base year rent because, when the ordinance took effect in 1981, rents were below market rate. Under Vega v. City of West Hollywood , (1990) 223 Cal.App.3d 1342, a property owner may seek a base year rent adjustment if the rent at the time was not reflective of general market conditions. Stardust contended that rents were artificially low in 1981 because the then-park owner was trying to assist elderly tenants. The rent board ruled that it could grant a Vega adjustment only if there were unique circumstances, and that none existed here. But the court said that the "peculiar circumstances" in the Vega decision referred to West Hollywood's ordinance. Ventura's ordinance "contains no ‘unique' or ‘peculiar' circumstances requirement," the court found. Thus, the court found the rent board's decision "arbitrary and unreasonable." Even the city's consultant had found that a Vega adjustment was warranted, only not as much as the property owner requested, the court noted. The court returned the issue of a base year adjustment to the city. The Case: Stardust Mobile Estates v. City of San Buenaventura , No. B186454, 07 C.D.O.S. 1955, 2007 DJDAR 2447. Filed February 22, 2007. The Lawyers: For Stardust: Robert Coldren, Hart, King & Coldren, (714) 432-8700. For the city: Donald Lincoln, Endeman, Lincoln, Turek & Heater, (619) 544- 0123.