The right combination of zoning changes and decreased parking requirements can make infill projects feasible in some of the state's most urban settings. That is the conclusion of Solimar Research Group, which continues to investigate land use options for crowded urban areas. Recently, we explored how regulatory changes affect the financial feasibility of infill projects, and then applied our models to the land use surrounding a major rail extension in Los Angeles. The results should prove interesting to any agency that is approaching the issue of rapid growth with a strategy of high density, transit-oriented development. We sought to calculate the degree to which changes in parking and density policy, as well to zoning, will shrink the notoriously stubborn gap between planning ideal and development reality. Our comprehensive pro-forma analyses revealed that while parking policy affects feasibility more than density allowance, reliance on one or the other is politically unrealistic. A combined strategy is essential. On the other hand, key zone changes may prove a powerful, singular tool in getting infill development off the ground. We further explored how these proposed policy strategies would play out in the very real built environment of the planned Exposition Line extension of the Los Angeles Metro Rail system. Our parcel-by-parcel GIS analysis of infill opportunities surrounding proposed rail stations highlights the infill potential of underutilized industrial land along transit corridors. Grounded Analyses To ensure the "real-time" relevancy of our calculations, we consulted local developers to identify actual development models. Five infill prototypes were selected, and examples of each — from an 8-10 unit townhouse to a 100-200 unit mixed-use project — are currently under construction. We then applied an "as is" pro-forma feasibility model to each, one based on current zoning standards and the industry's minimum expected 15% net margin. With our feasibility baselines established, we analyzied the fiscal impact of incremental increases or decreases in density and parking requirements. The selection of these two policies as regulatory variables was straightforward: one is a powerful determinant of gross revenue, the other a huge booster of project costs. We also calculated the impact on each prototype of building in either industrial or commercial zones. Combined Regulation Our pro-forma for development prototype 2A exemplifies the political near-impossibility of relying on a single regulation to promote infill in Los Angeles. Prototype 2A is a small, mixed-use project of 54 units, with a current feasibility gap of $1.2 million. A 50% density bonus reduces that gap to only $900,000; a 100% density bonus to only $700,000. While feasibility may arrive with 150% bonus, attendant density, height and FAR changes to the C-1 and C-M zones in which this project would be built are unlikely. Construction of prototype 2A also is unlikely without a change in parking requirements. We found that only a 50% decrease in the number of required parking spaces reduces the $1.2 million gap down to $400,000. That is still too much. But a synergy of more modest changes produces a viable alternative. Our study indicates that a 75% density bonus combined with a 25-50% parking reduction provide enough incentive for developers to pursue projects of this size. This outcome repeated itself in our calculations for prototype developments of various sizes. EXPO Application After calculating needed regulatory and zoning incentives, we took our prototypes to a built environment of high infill potential. The Exposition Line is scheduled for completion in 2010. It will serve an almost entirely developed area. We drew circular study zones around the planned La Brea, La Cienega, Crenshaw, Western and Vermont stations. Our GIS "screening" of parcels around the La Cienega stop reveals a repeated pattern of industrial under-use that, as our pro-formas indicate, should be targeted for infill. Nearly 25% of the half-mile area surrounding the station is zoned industrial/light manufacturing, much of that characterized by large parcels. In addition, many parcels are underutilized and ideal for infill redevelopment. Finally, we identified parcels along the La Cienega Boulevard commercial strip that could be assembled into spaces that would increase the feasibility of projects the scale of Prototype 2A. These projects become even more realistic with the regulatory changes identified above. Solimar's complete fiscal and land-use analysis of infill potential along the Expo line is available at: http://www.solimar.org/pdfs/Expo_Final_3-30.pdf . Greg Goodfellow is a research associate and project manager for Solimar Research Group, parent company of CP&DR .

The water supply analysis for one of the largest housing developments ever approved in the Central Valley has been rejected by the state Supreme Court. The court faulted the water study in the environmental impact report for the 20,000-unit Sunrise-Douglas community plan outside Sacramento because the study did not adequately describe long-term water sources and the impacts of using those sources. "While the EIR identifies the intended water sources in general terms, it does not clearly and coherently explain, using material properly stated or incorporated in the EIR, how the long-term demand is likely to be met with those sources, the environmental impacts of exploiting those sources, and how those impacts are to be mitigated," the state's highest court ruled. The court also rejected the EIR's analysis of the impacts of groundwater pumping on the Cosumnes River, which provides critical habitat for federally protected steelhead trout and fall-run Chinook salmon. Sacramento County approved the community plan for 6,000 acres of pastureland south of Highway 50 in 2002 (see CP&DR Local Watch , August 2002 ). The plan calls for approximately 20,000 housing units and nearly 500 acres of commercial and office development. At the same time, the county also approved the 10,000-unit Sunridge specific plan covering nearly half of the community plan site. The property lies within the City of Rancho Cordova, which incorporated a few months after the county approved the plans and zoning. The city has been implementing the plans. Angelo Tsakapoulos's AKT Development is the primary developer. Residents of the area and environmentalists sued the county (the city has since become the defendant) over the EIR for the plans. The lawsuit centered on the water supply, as local residents feared the impacts of large-scale groundwater pumping. Essentially, the project called for using a well field about four miles south of the plan area for short-term supplies. Long-term, the project would be supplied by the wells and Sacramento County Water Agency's new diversion of Sacramento River water. A Sacramento County superior court judge ruled against the project opponents. In an unusually terse opinion, the Third District Court of Appeal concluded the opponents were guilty of "misstatements and omissions" and rejected the opponents' contentions (see CP&DR Legal Digest , April 2005 , March 2005 ). But in a 6-1 decision, the state Supreme Court found it was the county — not the opposition — that was less than forthcoming. "The principal disputed issue," Supreme Court Justice Kathryn Mickle Werdegar wrote for the majority, "is how firmly future water supplies for a proposed project must be identified or, to put the question in reverse, what level of uncertainty regarding the availability of water supplies can be tolerated in an EIR for a land use plan." Justice Werdegar laid out the evolution of case law at the appellate court level. The first case was Santiago County Water Dist. v. County of Orange , (1981) 118 Cal.App.3d 818, in which the court rejected an EIR for a mining project because the EIR did not address the impacts of supplying the mine with up to 15,000 gallons of water per day. The next case in line was the landmark Diablo Grande decision, Stanislaus Natural Heritage Project v. County of Stanislaus , (1996) 48 Cal.App.4th 182. In that case, the court threw out an EIR for the 5,000-unit Diablo Grande project that listed possible long-term water supplies but deferred analysis of the water acquisitions until later phases of project development (see CP&DR Legal Digest , September 1996). The next case was Napa Citizens for Honest Government v. Napa County Bd. of Supervisors , (2001) Cal.App.4th 342, in which the court disapproved an EIR that did not disclose possible alternative water sources and the impacts of using them (see CP&DR Legal Digest , September 2001 ). Finally, in Santa Clarita Organization for Planning the Environment v. County of Los Angeles , (2003) 106 Cal.App.4th 715, the court rejected an EIR that relied on "paper water" from the over-subscribed State Water Project (see CP&DR Legal Digest , April 2003 ). While these decisions provide no definitive standard, according to state Supreme Court, they provide four principles: • The California Environmental Quality Act (CEQA) is not satisfied unless decision-makers are presented with sufficient facts to evaluate how water will be supplied to a project. • An EIR for a project to be built over a number of years cannot be limited to water supply for the first few years. • Future water supplies must "bear a likelihood of actually proving available. • When water sources are uncertain, there must be a discussion of possible replacement sources or alternatives, and the impacts of those contingencies. It is not enough to say that development will not proceed if anticipated water fails to materialize. The court also discussed legislation of recent vintage. In 1995, lawmakers approved SB 901 (Costa), requiring cities and counties considering a large development proposal to obtain a "water supply assessment" from the appropriate water supplier. Six years later, the Legislature approved two more bills: SB 221 (Kuehl) requires a city or county considering a residential subdivision of at least 500 units to obtain written verification that adequate water is available for the project and other planned uses for 20 years. Meanwhile, SB 610 (Costa) attempts to close loopholes in SB 901 and emphasizes the importance of 20-year urban water management plans (see CP&DR , October 2001 , October 1995). After laying out this background, the court then considered the specifics of the Rancho Cordova project. The community and specific plans contemplate the use of 5,000 to 10,000 acre-feet of water from the well field during the near-term. (These wells are serving the 1,800 houses built since project approval.) Opponents contended the EIR did not adequately describe competing uses for this groundwater, but the court was satisfied with this portion of the environmental study. Long-term supply, however, was a different story. According to the court, the EIR discussed long-term needs — based on the county general plan — within the county water agency's "Zone 40." This zone encompasses much of southern Sacramento County, including the project area. The EIR also addressed water sources and the Sacramento Water Forum, a collection of agencies and stakeholders that adopted a plan for competing American River water uses. These estimates of demand and supply, though, were not consistent throughout the EIR, the court noted, and it appeared that a supply gap for Zone 40 remained. "The general answer given in the EIR, and echoed by real parties and Rancho Cordova, is that the new surface water supplies are to be used conjunctively with groundwater supplies. But this explanation is vague and unquantified," Werdegar wrote. "How much groundwater, existing and new, will be used with how much new surface water? In what combinations will these sources be used during wet and dry years, respectively? No such description of planned future water use appears in the FEIR." The EIR appeared to tier off of a future analysis of what was at the time a pending water agency plan for Zone 40. But an EIR may not tier of off a document that doesn't exist. The Rancho Cordova project EIR, the court ruled, could have tiered off of an earlier analysis for the Water Forum proposal. However, the EIR's relationship to the Water Forum proposal was unclear, even though the EIR included a discussion of impacts and mitigations in the Water Forum EIR. "The reader attempting to understand the county's plan for providing water to the entire Sunrise Douglas development is left to rely on inference and speculation," Werdegar wrote. Developers pointed to a condition of project approval that prohibits approval of entitlements if water is not available. But the court dismissed the argument and cited Stanislaus Natural Heritage: "‘It must be borne in mind that the EIR must address the project and assumes the project will be built.'" As for impacts of groundwater pumping on the Cosumnes River, the court found that the EIR's brief dismissal of concerns expressed by environmentalists and wildlife agencies was not supported by substantial evidence. In a dissenting opinion, Justice Marvin Baxter said the majority was imposing requirements beyond those contained in CEQA or the Water Code. "Under the majority's new rule … once a city or county approves a general plan, it could not approve a project in furtherance of that plan unless or until it had secured water sources for build out of the entire general plan. Northing in CEQA requires such a result," Baxter wrote. To this, Werdegar responded, " ong-term local water planning is not a burden that must be taken up anew, for CEQA purposes, each time a development is proposed; rather, cities and counties may rely on existing urban water management plan's future demand accounting." The Case: Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova , No. S132972, 07 C.D.O.S. 1131, 2007 DJDAR 1453. Filed February 1, 2007. The Lawyers: For Vineyard Area Citizens: Stephan Volker, (510) 496-0600. For the city: Julia Bond, Meyers, Riback, Silver & Wilson, (510) 808-2000. For Sunrise Douglas Property Owners Association: James Moose, Remy, Thomas, Moose & Manley, (916) 443-2745.

Yes, it's been 37 years since Gov. Ronald Reagan signed the California Environmental Quality Act (CEQA) into law. But we're still arguing about the statute's most basic definitions. The California Supreme Court will get another crack at a very basic question — what constitutes a "project" that is subject to CEQA — in a case with the memorable name Save Tara v. City of West Hollywood (No. S151402). Surprisingly, the Cal Supremes have emerged as a force for strict CEQA enforcement. However, the latest case may offer the court an opportunity to swing the other way. The specific question in the West Hollywood case is this: Does the agreement between the city and the developer that describes the proposal in detail — but which expressly withholds any commitment to a definite course of action and is conditioned upon CEQA compliance — constitute "approval" of a "project" necessitating environmental review? The case involves a Colonial revival mansion called Laurel Place, which the previous owner donated to the city. Preservationists want to protect the approximately 90-year-old mansion as-is. The city wants to restore Laurel Place for apartments and build a U-shaped apartment building around the mansion — all to provide housing for poor senior citizens. A state appellate court ruled 2-1 that West Hollywood should have completed an environmental impact report before entering into a conditional agreement in 2004 with a nonprofit housing developer for the sale of Laurel Place (LINK). The city argued that the agreement was contingent, in part, on completion of environmental review — and the city certified an EIR for the 28-unit project last year. But the court said the city waited too long to commence the CEQA process. The ruling appeared to conflict with a decision issued only a few months earlier in which a different appellate panel ruled that the McCloud Community Service District's conditional agreement with Nestlé for construction of a water bottling plant was not yet a project under CEQA . The California Supreme Court accepted only two CEQA cases in the 10 years from 1993 to 2003. Since then, the court has accepted five cases. In two rulings thus far, the court has hewed a strict CEQA line. Last year, the court said California State University must mitigate off-campus impacts of development at the Monterey Bay campus. And earlier this year, the court rejected a water analysis for a 20,000-unit development near Sacramento. By July 2, the court is scheduled to rule on a whether the Solano County Airport Land Use Commission should have undertaken environmental review of a compatibility plan for areas surrounding Travis Air Force Base — a ruling that will likely call for an environmental analysis. (The other pending case involves the EIR for the Cal-Fed Bay Delta project.) The West Hollywood case invites the court to tilt the other direction. A number of CEQA experts said the appellate court went too far and noted that the decision in effect invalidated the 2006 EIR, even though no one sued over that document and no court ever reviewed it. Of course, the other side argues that the city essentially committed itself when it approved the conditional agreement, so any future EIR would amount to after-the-fact rationalization, which CEQA prohibits. - Paul Shigley

LAS VEGAS _ Everywhere you go on the planning and development circuit these days, people are talking about mixed use. But does everybody really want to build it? Or lease it? Or live in it? Or finance it? Sometimes I'm not so sure. I figured the ultimate test was here during the 50th annual convention of the International Congress of Shopping Centers, where 50,000 people in the retail business gathered in one of the biggest conventions in America. (It's so big that the convention center has streets with names – 20th Avenue, D Street – and the biggest retailers and developers have special business cards made up with their Convention Center address on them.) As I expected, everybody is talking about mixed use. But the real estate business, like the planning business, is segregated by sector. You know how the New Urbanists are always complaining about a segregation of uses created by the zoning code? Well, that segregation is also institutionalized in the real estate business as well. There are retail developers, single-family developers, condo developers, business park developers. They each tend to do only one thing and they have specialized lenders and financial partners behind them, who also understand only one of these "asset classes," as real estate people call them. Nevertheless, mixed use was a big topic of discussion at ICSC for a variety of reasons, mostly having to do with money. Some shopping centers have excess land in the form of surface parking lots that could be developed or sold off. In urban areas, the mall owners recognize as well that they can generate more revenue by "going up" – developing housing or office space or some other use in a second, third, or fourth floor. One thing you get at ICSC – which we don't always get at planning events – is the private-sector take on things. Jon Peterson of The Peterson Co., a Northern Virginia-based developer, pointed out that while mixed-use can sometimes minimize market risk by diversifying the real estate development you're building, it can also increase the risk if you lay your chips on something that is out of fashion. "If you're trying to put some office space above a retail component and that office market isn't there and this building is a centerpiece of your project, you can't go forward with it," Peterson said at a mixed-use session. "You're not going to build a 100,000 square foot office building in the middle of your project just to get the ground-floor retail." At the same time, if you don't build the building, you may have a critical hole in the middle of your project. Still, there's a sense that the retail real estate folks are beginning to catch on that mixed use is not entirely newfangled. At the same mixed-use session, Tom D'Alesandro of General Growth in Chicago, which has worked on many master-planned communities, said that in developing Reston Town Center – a New Urbanist downtown in a '70s master-planned community in Virginia – "we took the DNA of the large-scale master-planned community, concentrated it, and condensed it into a more vibrant focus point." They also had to make lemonade out of lemons. Squeezed between three large malls, downtown Reston was never going to get a department store, so they used mixed-use as a substitute. Still, there's always a sense at ICSC that somebody else is making a lot of money off of your idea and you're somehow not realizing that value. One veteran retail broker told me that retail doesn't get a big financial pop from mixed-use – but seems to create value for offices and condos, which get big increases in value as a result. And although he cast his viewpoint as a lament, I think it's not so bad. If tunnel-vision retail developers think more broadly about the mixed-use district and towns they're located in, that's all to the good. - Bill Fulton

A proposal to develop what amounts to a 5,000 housing-unit new town in the foothills of Yuba County is advancing, but the project still faces numerous hurdles. In addition to concerns raised by environmentalists and slow-growth advocates, numerous government agencies have questioned both the project's environmental impact report (EIR) and the wisdom of building a new town in a very rural location nearly 15 miles from the nearest services. Proponents of Yuba Highlands counter that the project is consistent with a 1993 community plan for the area and provides a preferable alternative to additional development of Yuba County's farmland and floodplains. In late May, the Yuba County Board of Supervisors began considering whether to put the project on the ballot. But only one week earlier, the supervisors voted 3-2 to deny an appeal of the Planning Commission's certification of the Yuba Highlands EIR. But, because local practice requires a four-fifths vote for statements of overriding consideration — which the EIR contains because of the project's significant, unavoidable impacts — the effect of the 3-2 vote was unclear, and supervisors are scheduled to make a final decision on the EIR in June. Assuming the EIR is in place, the board could also consider an area plan, a development agreement and a general plan amendment in June. The county's approval of the EIR and project would almost guarantee lawsuits. At least six government agencies — the attorney general's office, Caltrans, the Department of Fish and Game (DFG), the Central Valley Regional Water Quality Control Board, the Sacramento Area Council of Governments (SACOG) and the Northern Sierra Air Quality Management District — have called the EIR inadequate, and some surrounding local governments have expressed concern about the project's traffic, air quality and housing impacts. "They really just bulled their way through and didn't address any of the city's concerns," Marysville Community Development Director Gary Price said. "We think the EIR is completely inadequate." "You are not seeing the complete picture," Jeff Finn, a DFG biologist, told the Board of Supervisors during a standing-room-only public hearing for the EIR appeal. Supervisors Hal Stocker and Mary Jane Griego agreed, saying the traffic, water, wildlife and air quality analyses were incomplete. "If this is a good EIR, I'd hate to see a bad one," said Stocker, an outspoken project opponent whom the developer has tried to disqualify from considering the project. "It has more holes than Swiss cheese." Complicating things further is the project's location adjacent to Beale Air Force Base. Although the Air Force is officially neutral on Yuba Highlands, project detractors say the development would unnecessarily encroach on the 22,000-acre base, potentially threatening its future viability. Yuba County has long been one of the poorest in California. Although it has increasingly become a home to Sacramento-area commuters, the county's unemployment rate remains high: It was 9.5% in April, roughly double the state rate, according to the state Employment Development Department. Per capita income is approximately one-third less than the state average. Partly because of the weak local economy, the county has warmly greeted numerous development proposals. Depending on who is counting, at least 15,000 housing units in a county of only 70,000 people are somewhere in the pipeline — and that estimate doesn't include thousands of houses proposed for the tiny City of Wheatland. During the 1980s and 1990s, Yuba County designated new growth areas. One of them is River Highlands, a 21,800-acre area approximately 20 miles east of Marysville, between Beale and the Nevada County line. The River Highlands community plan, adopted as part of the general plan, designated much of the area for five-acre parcels. A core area, however, was designated for two units per acre. In 2001, developer Gary Gallelli proposed the Yuba Highlands project for the core area. The review process ground on for years until October 2006, when the county released a final EIR. At that point, what had been a proposed specific plan became an area plan because the proposal lacks aspects required of a specific plan, such as detailed infrastructure and financing plans. Early this year, a divided Yuba County Planning Commission certified the EIR and recommended project approval. The project proposes 5,100 dwelling units on about 1,900 acres of the 2,900-acre site. Also proposed are 85 acres of commercial development in three locations, a business park, a golf course, an 81-acre park and three schools. Proponents say the site is ideal for growth because it is not in a floodplain (unlike many new Yuba County developments), nor is the mostly treeless grassland valuable farmland or high-quality oak woodlands. But opponents contend the site is simply too remote, and that its proximity to Beale and the 11,000-acre Spenceville State Wildlife Area is a drawback. The project site has no municipal services, infrastructure, schools, shopping or anything else, Supervisor Griego pointed out. "Just because you're not in a flood zone doesn't mean you are in a proper place to develop," Griego said. "We have enough development to supply us for many, many years to come. We have no shortage of houses." Yuba Highlands would be a 15- to 20-mile drive on two-lane country roads to the nearest urban areas, and, according to the EIR, would generate 24,000 automobile trips a day on only one county road to Marysville. Yet Caltrans, SACOG and the City of Marysville question even that high number, as they contend the EIR's traffic analysis is inadequate because it is based on outdated statistics. They also argue that the EIR improperly defers mitigations. Related to the traffic concerns are air quality — and global warming — worries. The attorney general's office urged county supervisors to reject the EIR because it "completely ignores impacts from greenhouse gas emissions." Yuba County received the attorney general's protest letter only a few weeks after the attorney general sued San Bernardino County for not addressing global warming in a general plan update. Meanwhile, downwind Nevada County is concerned about air pollution from the development. Western Nevada County is a "non-attainment" area because of ozone pollution. Emissions blowing in from Yuba Highlands would more than offset every measure that the Northern Sierra Air Quality Management District has planned for western Nevada County to reach attainment, the district's Sam Longmire said. Richard Thomas, a longtime Sierra Club organizer and chair of Friends of Spenceville, said the development would send 7,000 cars a day on a road through the wildlife area, threatening its integrity. Department of Fish and Game representatives have raised similar concerns and contend the EIR does not fully address the impacts of Yuba Highlands and other new developments on the wildlife area. The DFG's Finn said the EIR contains conclusions without scientific support. And then there is Beale. For decades, the Air Force base has been the cornerstone of Yuba and Sutter counties' economy. The base has about 5,000 employees, making it by far the largest employer in the area. Recognizing that land use conflicts have been a factor in some California base closures, the Governor's Office of Planning and Research is managing a Beale joint land use study with the Department of Defense and other interested parties. So far, the process has identified a number of existing and potential conflicts, but a draft plan, originally due in March, has not been released. Two years ago, Beale's commander expressed concerns about Yuba Highlands. Since then, the commander has changed and the Air Force has gone publicly mute. During recent public hearings, project opponents and proponents have argued over whose position better supports Beale. Supervisor Griego said that a housing development adjacent to the base conflicts with Beale's operations and sends the wrong message to the Pentagon. William Kopper, an attorney for labor unions that appealed the EIR, said the environmental document uses the wrong noise standard. Instead of measuring single-instance noise from Air Force planes, the EIR relies on a 24-hour standard that is skewed by long periods of quiet to suggest that homeowners in the proposed development would not be bothered by military aircraft, he said. But Supervisor Dan Logue said that Beale leaders told him they want to see Yuba Highlands go forward because it would provide housing for Beale personnel, an argument also advanced by some community liaisons to Beale and by retired Air Force personnel. Water is also an issue. Developer Gallelli plans to rely on groundwater — supplied by the Yuba County Water Agency and distributed via a community services district — and the EIR says groundwater is plentiful. However, the Regional Water Quality Control Board contends that the groundwater source is "underflow" of the Yuba River and, therefore, is water under the state's jurisdiction. If that is the case, the state would conduct a lengthy process to determine who is entitled to use the water. Supervisors Logue and Don Schrader both said they were comfortable with the EIR's water analysis because the project will stop if the developer can't get access to water. Project opponents, however, note that courts have been reluctant to accept that line of reasoning. But project backers say the time has arrived to stop studying and move ahead. Richard Floch, a planning consultant for the developer, said Yuba County officials adopted the original River Highlands community plan because they could see growth coming. The Yuba Highlands plan is simply the next step, he said. Contracts are in place to provide water and the Wheatland-based school district is prepared to provide new schools. Planners have clustered housing away from areas that get the most noise from Beale, and they have proposed a mix of commercial and industrial uses to reduce vehicle travel — all of which improves on the original plan, he said. If the county rejects Yuba Highlands, Floch asked, then what is the value of long-term planning? To which Logue says: "I wish we could go back to 1993 because I guarantee I wouldn't have supported this project." Yet Logue appears to be a project supporter now, as does Schrader, albeit a wary one. "Why," asked Schrader, "do I have the feeling this is going to end up before a person with a black robe?" Resources: Yuba Highlands area plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/Yuba%20Highlands%20Area%20Plan/default.aspx River Highlands community plan: http://www.co.yuba.ca.us/Departments/Community%20Development/Planning/Specific%20Plans/River%20Highlands%20Community%20Plan/default.aspx Beale joint land use study: http://www.cajlus.com/beale_home.htm Friends of Spenceville: http://www.spenceville.org/

A real estate company's purchase at a tax sale of townhouses owned by the Los Angeles County Housing Authority is not valid, the Second District Court of Appeal has ruled. How could real estate owned by a public agency get sold for nonpayment of taxes? Erroneously. During the 1980s, E.A. Reeves Partnership contracted with the state to build a low-income townhouse project on lots 14, 15 and 16 of the Springdale Tract, along Willowbrook Avenue, in South Central Los Angeles. After the housing was built, Reeves conveyed the property to the state. However, a scrivener's error in the grant deed omitted reference to parcels 15 and 16. When the state sold the project to the county Housing Authority in 1990, the error was perpetuated. The Housing Authority notified the county auditor of ownership by a tax-exempt entity, but failed to tell the county assessor, which continued to send tax bills for lots 15 and 16 to Reeves. The taxes went unpaid, and in 1995 Hector Nevarez acquired the two lots at a tax sale. When Nevarez failed to pay taxes, the assessor conducted another tax sale in 2003, at which L&B Real Estate acquired lots 15 and 16 for $99,000. When L&B learned that the Housing Authority was asserting ownership, L&B filed suit to clear up the title. The Housing Authority filed a counter-complaint contending the tax deed was void. Los Angeles County Superior Court Judge Alice Altoon ruled that the property could not be sold at a tax sale and the Housing Authority was the owner. Ordinarily, public property is exempt from taxation and, therefore, cannot be sold for nonpayment of taxes. On appeal, L&B argued that the usual rule did not apply because the Housing Authority had waived its tax exempt status by not complying with the Revenue and Taxation Code, because state law required L&B's and Nevarez's tax deeds to be presumed valid, and because the Housing Authority's attempted to invalidate the tax deed too late. A unanimous three-judge panel of the Second District, Division Eight, rejected all three arguments. The statutes cited by L&B for the proposition that the Housing Authority waived its tax exempt statues (Revenue and Taxation Code §§ 5082.1 and 4987) are inapplicable, the court ruled. The first section concerns cancellation of tax liens when property is acquired by the government, while the second regards cancellation of wrongly imposed taxes. As for the presumptive validity of the tax deeds, the court said, "Among the jurisdictional prerequisites to a valid tax deed is property legally subject to being taxed." In this instance, there was no tax liability. To L&B's argument that there was a one-year statute of limitations, the court said the time limit does not apply because "the defect in title was jurisdictional. The Authority remained in possession of the property since 1990." Only in a footnote did the court cut to the chase: The townhouse project straddles all three lots, and a large "Community Development Commission, County of Los Angeles" sign sits in front. L&B did not obtain a title report until after the sale, and that report mentioned documents in the chain of title indicating that all three lots were intended to be conveyed originally. "In short, L&B either knew or should have known it was buying property that belonged to the Authority," Justice Laurence Rubin wrote for the court. A lawsuit in Los Angeles County Superior Court in which L&B seeks return of the $99,000 purchase amount is pending. The Case: L&B Real Estate v. Housing Authority of the County of Los Angeles , No. B189740, 07 C.D.O.S. 3981, 2007 DJDAR 5013. Filed April 16, 2007. The Lawyers: For L&B: Michael Ezer, Ezer, Williamson & Brown, (310) 277-7747. For the Housing Authority: Wayne Grajewski, Brown, Winfield & Canzoneri, (213) 687-2100.

The apportionment of lots in a subdivision is not an "exaction" under the Mitigation Fee Act, a state appellate court has ruled. The ruling stemmed from a Chico City Council decision to alter a subdivision approved by the Planning Commission. The council precluded development on one large parcel and transferred the permissible housing units to an adjacent parcel. The developers argued that this decision amounted to an illegal exaction under the Mitigation Fee Act. But a trial court and the Third District Court of Appeal found that the city's decision fell under the Subdivision Map Act — and that the developer's lawsuit alleging an illegal taking was filed too late to challenge a map act decision. In March 2005, the Chico Planning Commission approved the Oak Valley subdivision of up to 1,300 units on 340 acres in the foothills on the east side of town. The commission authorized 80 to 160 units on "Lot Q." Opponents appealed to the City Council, which in May 2005 affirmed the decision but also approved a motion of intent to limit Lot Q to 80 units. Upon making a final decision on September 20, 2005, the council prohibited residential use of Lot Q and increased permissible development on Lot P by 160 units. The council said Lot Q should remain open space because of its steep slopes, oak woodlands, riparian areas and rare plant species. Developer Tom Fogarty, who has been attempting to sell the project, contended that the City's Council's ultimate decision unconstitutionally reduced the fair market value of Lot Q by $17 million. He filed a lawsuit on December 19, 2005, but did not serve the city with the suit until December 27 — 98 days after the City Council's final decision. Butte County Superior Court Judge Barbara Roberts threw out the lawsuit because the Subdivision Map Act gives plaintiffs 90 days to serve a summons after the date of the public agency's decision. Fogarty appealed, arguing that the Mitigation Fee Act — which gives plaintiffs 180 days — applied. The Mitigation Fee Act (Government Code § 66000 et seq .) permits an attack on fees, dedications, reservations and "other exactions." Fogarty argued that the City Council's decision fell into the "other exactions" category. However, the Third District noted that fees, dedications and reservations all concern either the payment of money or an interest in land — and not land use restrictions. "The interpretation that the plaintiffs champion violates the intrinsic principle of ejusdem generis , under which we should construe general terms following specific terms as embracing only objects similar in nature to the specific term," Justice Rodney Davis wrote for the unanimous three-judge panel. "As the plaintiffs concede, the specific terms in § 66020 all involve divesting a developer of either money or a possessory interest in the subject property. The present land use conditions at issue do not result in either consequence; they are simply a restriction on the manner in which the plaintiffs may use their property." The remedy for a violation of the Mitigation Fee Act is a refund or return of the improper exaction. But in this case, a refund or return would not be possible because nothing was transferred to the city, Davis wrote. Thus, the Mitigation Fee Act — and its 180-day time limit — do not apply, the court concluded. Nothing prevented Fogarty from seeking redress under the Subdivision Map Act (Government Code § 66410 et seq .), the court noted. In May, Fogarty asked the state Supreme Court to review the case. The Case: Fogarty v. City of Chico , No. C052576, 07 C.D.O.S. 2660, 2007 DJDAR 3375. Filed March 12, 2007. The Lawyers: For Fogarty: Douglas Aikins, GCA Law Partners, (650) 428-3900. For the city: James Meeder, Allen, Matkins, Leck, Gamble, Mallory & Natsis, (415) 837-1515.

The City of Poway did not conduct an adequate hearing before issuing tax-exempt bonds for the purchase of a mobile home park, the Fourth District Court of Appeal has ruled. The issuance of tax-free bonds for a housing project requires a public agency to conduct a "TEFRA hearing" (named for the Tax Equity and Fiscal Responsibility Act of 1982), at which the agency accepts public input regarding affordable housing needs. However, there was no evidence Poway officials "brought forth or discussed any information on the provision of low-income housing at the park, a critical element in the maintenance of the tax-free status of the bonds," the court ruled. In addition, the hearing and the city's bond resolution were misleading because they did not explain the precise deal the city was contemplating or the uncertain tax-exempt status of the private entity acquiring the mobile home park, the court ruled. The court rejected arguments from mobile home owners that the city had to abide by earlier oral promises that the city would offer to sell the park to the residents. In 1991, Poway's Redevelopment Agency purchased Royal Poway Mobilehome Park with the intent of preserving affordable housing. Four years later, the Redevelopment Agency transferred ownership to the city, which issued $31.7 million in bonds to pay off the debt remaining on the agency's original purchase. The city and contract employees managed the 399-unit park until 2004, when the city hired Wakeland Housing and Development Corporation for the task. In November 2004, the city announced it intended to sell the park to a 501(c)(3) nonprofit housing corporation using tax-exempt bond financing. Members of the Royal Poway Mobilehome Owners Association protested that city officials said in 1999 that if the city ever sold the park, residents would have a chance to purchase it. The association made an offer in February 2005, but the city rejected it and went forward with its plan to sell the park to Wakeland, even though Wakeland's 501(c)(3) status was pending. The deal was this: The city would issue $32 million in tax-exempt bonds and loan the proceeds, plus another $9.5 million, to the Redevelopment Agency. The agency would then loan all of that money to Wakeland, who would purchase the park for $35.6 million and assume all of the debt payments. At the time, Wakeland did not have a determination from the IRS on 501(c)(3) tax-exempt status. If Wakeland failed to get 501(c)(3) status, the city's backup plan was to have the Redevelopment Agency take ownership of the park. The city filed a validation action to get a court ruling on the legality of the financing plan. Meanwhile, the owners association filed their own lawsuit attempting to block the deal. After the legal actions were combined, San Diego County Superior Court Judge Yuri Hofmann approved the city's request for validation and rejected the owners association's various arguments. The Fourth District overturned part of the decision. The appellate court explained that a local public agency may not issue tax-exempt bonds and loan the proceeds to a private business if the bond proceeds are going to be used for "residential rental property for family units." There is an exception, though, for "qualified" projects in which at least 20% of the units are occupied by individuals whose income is 50% or less of the area's median. These are among the things a city must consider at a TEFRA hearing. Poway noticed a TEFRA hearing on June 14, 2005, at which the city and the Redevelopment Agency approved resolutions approving the bonds and related transactions. The owners association argued in court that there was no evidence at the hearing that Wakeland or its subsidiary, Poway Royal Estates LLP (PRE), was a tax-exempt charitable corporation, and that the city did not satisfy the low-income housing requirements. The city countered that the deal was contingent on Wakeland getting 501(c)(3) status. The city also said it was not required to present evidence regarding affordable housing because the agreement with Wakeland called for 20% of spaces to be available to very-low income residents and for an additional 40% to be available to "lower-income" households. The court was not satisfied. The first step of the city's plan was to loan the bond proceeds to the Redevelopment Agency, which is not a 501(c)(3) charitable corporation, the court noted. "The city explains that to take advantage of favorable interest rates and retire existing debt on the park, it sought to issue tax-exempt bonds before Wakeland or PRE obtained a determination letter from the IRS. For reasons not satisfactorily explained, the city did not refinance the debt itself," Presiding Justice Judith McConnell wrote for the court. "Rather it decided to first loan the proceeds of the bond issuance to the Redevelopment Agency for its interim purchase of the park." " t appears that in a rush to take advantage of favorable interest rates, laudable in and of itself, the city put the cart before the horse," McConnell continued. The hearing did not give the public adequate opportunity to comment on low-income housing, and apparently no such discussion took place, the court found. "We conclude that given the contingent nature of step two of the city's divestiture plan, the uncertain status of Wakeland or PRE at the time of the hearing, and the lack of any information on the low-income aspect of the project, the city's hearing was essentially tantamount to no TEFRA hearing at all," McConnell wrote. As for city officials' oral promises made in 1999 about selling the park to residents, the court concluded that such pronouncements are not enforceable contacts. The Case: Royal Poway Mobilehome Owners Association v. City of Poway , No. D048211, 07 C.D.O.S. 4305, 2007 DJDAR 5486. Filed April 20, 2007. The Lawyers: For the owners association: James C. Mitchell, Mitchell & Gilleon, (619) 702-8623. For the city and Wakeland Housing and Development Corporation: Douglas J. Evertz, Stradling, Yocca, Carlson & Rauth, (949) 725-4000. For the city: Lisa A. Foster, McDougal, Love, Eckis, Smith & Boehmer, (619) 440-4444.

The state attorney general cannot recover fees under the Code of Civil Procedure's "private attorney general" provision, the Third District Court of Appeal has ruled in a Tehama County case involving the Subdivision Map Act and the Williamson Act. The attorney general's office sued the county over a lot-line adjustment that the state argued should have been subject to map act restrictions and Williamson Act findings. The attorney general (AG) won the case and a trial court awarded the AG $173,000 in fees. However, the Third District, citing California Licensed Foresters Assn. v. State Bd. of Forestry , (1994) 30 Cal.App.4th 562, 570, ruled, " n award of attorney fees under Code of Civil Procedure § 1021.5 has always served ‘as a "bounty" for pursuing public interest litigation, not a reward for litigants motivated by their own interests who coincidentally serve the public.'" "The attorney general," Justice Ronald Robie wrote for the court, "needs no encouragement to pursue litigation that is in the general interest of the state's population because, put simply, that is his or her job." The case involved Tehama County Planning Director George Robson's approval in 1999 of a lot line adjustment for the 3,300-acre Burr Valley Estates west of Red Bluff. The property owned by KAKE, LLP, is under a Williamson Act contract, which provides property owners a tax break for not developing their land. Robson approved KAKE's lot line application after determining it would not create more parcels than already existed. In recent years, the state Department of Conservation has expressed concern over Tehama County practices regarding the division of land covered by the Williamson Act. Generally, the Williamson Act bars land divisions unless the resulting parcels would still be of sufficient size to sustain agricultural uses. Tehama County has approved such divisions as long as resulting parcels are at least 40 acres in size. In May 2001, the AG, the Resources Agency and the Department of Conservation sued over the KAKE project, arguing that the lot-line adjustment violated the Subdivision Map Act and the Williamson Act. Retired Lassen County Superior Court Judge Joseph Harvey ruled for the state and eventually awarded the AG attorney fees. The county and KAKE appealed both the ruling and award of fees. In a lengthy, unpublished portion of the decision, the Third District ruled that the county had in fact violated the Subdivision Map Act because the lot line adjustment resulted in 29 parcels, which was at least two more than existed prior to the lot line adjustment. Lot line adjustments may not increase the number of parcels. The court reached its conclusion after a detailed examination of early 20th Century land transactions. KAKE had argued there were 37 or 40 pre-existing parcels, while the state argued there were 21 or 24. KAKE argued that the state's figure was based on the forced merger of lots, which Code of Civil Procedure § 1093 prohibits. But the court concluded KAKE read the law too broadly. After concluding the state was correct and the lot-line adjustment was subject the Subdivision Map Act, the court turned to the issue of attorney fees. The discussion of attorney fees was the only portion of the decision the Third District published, meaning it is the only part of the case that may be cited as precedent. Judge Harvey had awarded the $173,000 based on the "obdurate behavior" of a previous county attorney. The state conceded this was not a proper basis for the fee award and instead argued that the case was an extreme situation and that the AG's costs of conducting the litigation were out of proportion to the any pecuniary interest of the state. But the Third District ruled that under the financial burden criterion of § 1021.5, the attorney general does not qualify for fees. " he pertinent question is whether the public entity deserves a reward for pursuing litigation that was in the interest of a greater spectrum of the public than its own constituents," Robie wrote, citing cases involving lawsuits filed by one local government against another. " pplying the traditional financial burden criterion to public entity litigants will not always preclude a fee award under Code of Civil Procedure § 1021.5, except then the public entity litigant is the state itself, acting through the attorney general. Such a case will always be self-serving, in that the People will always be pursuing their own interests through their chief attorney, whose very raison d' etre is to enforce the laws of the state and serve the public interests of the state's population as a whole," Robie wrote. "To reward the attorney general with attorney fees for pursuing litigation it is his or her duty to pursue would stand the private attorney general doctrine on its head," the court concluded. The decision pleased not only Tehama County but city and county organizations that were concerned about costs and the possibility that the AG's office might make decisions based on the likelihood of winning fees. The Case: People ex rel. Brown v. Tehama County Board of Supervisors , No. C049048, 07 C.D.O.S. 2872, 2007 DJDAR 3650. Filed March 16, 2007. Modified April 11, 2007 at 2007 DJDAR 4803. The Lawyers: For People: Richard Thalhammer, attorney general's office, (916) 445-9555. For the county: Arthur Wylene, county counsel's office, (530) 527-9252. For KAKE, LLP: James Wagstaffe, Kerr & Wagstaffe, (415) 371-8500. Corrections . A case involving enforcement of the Williamson Act in Tehama County and the payment of attorney fees to the state has in fact been published in full. A story in the June edition erroneously reported that only a portion of the case was certified for publication. The case is People ex rel. Brown v. Tehama County Board of Supervisors.

A California Environmental Quality Act lawsuit over the City of Fresno's move to metered water rates has been dismissed because attorneys missed a deadline. Attorneys for the San Joaquin Valley Taxpayers Association did not file a request for a hearing on the lawsuit until 91 days after they filed the suit. Under the California Environmental Quality Act (CEQA), a plaintiff has 90 days to request a hearing. The court ruled that dismissal of the case was mandatory and that the attorneys' error was not "excusable neglect." In 2005, Fresno approved an updated contract with the Bureau of Reclamation for continued delivery of 60,000 acre-feet of water from the Central Valley Project. A condition of the contract requires the city to begin charging for water based on usage, rather than continuing the city's practice of charging a flat rate based on the connection. The taxpayers association, which complained the plan would raise water bills, filed a lawsuit contending that the city's environmental review of the contract extension was inadequate. The group filed its lawsuit on August 19, 2005. But not until November 18, 2005, did the group file with the Superior Court a request for a hearing. Three days later, the city requested dismissal of the lawsuit because the taxpayers association missed the 90-day deadline for requesting a hearing contained in Public Resources Code § 21167.4, subdivision (a). The taxpayers association responded that it had filed the request late because the deadline had been inadvertently "miscalendared" and no one realized it until late on the afternoon of November 17. At that point, no one could get the hearing request to the courthouse in time, the association said. Fresno County Superior Court Judge Rosendo Peña ruled the association had failed to show excusable neglect and dismissed the case. The taxpayers association appealed, but the Fifth District Court of Appeal upheld the decision. On appeal, the taxpayers association argued that the city's request to dismiss the case was moot because the association had filed its request for a hearing. The basis for the city's dismissal request "no longer existed when the dismissal motion was filed and served," the group argued. The Fifth District called this argument "wrong on the facts." The court ruled: " violation of the 90-day deadline existed at the time the motion to dismiss was filed and the violation still exists today. The late-filed request for hearing did not cure the violation." The taxpayers association argued that the missed deadline can be cured if a request for hearing is filed before the motion to dismiss, as occurred in this case. But the court rejected that argument, too. The statute "means what it plainly says — the request for a hearing must be filed within 90 days from the date the petition was filed," the court ruled. In an unpublished portion of the opinion, the court determined that the missed deadline was not excusable error because, upon realizing the impending deadline with time to act, the association could have filed the request for hearing by fax or delivered the request to a court drop box before 5 p.m. on deadline day. The Case: Fiorentino v. City of Fresno , No. F050578, 07 C.D.O.S. 4994, 2007 DJDAR 6340. Filed April 5, 2007. Modified and ordered partially published May 4, 2007. The Lawyers: For Fiorentino (San Joaquin Valley Taxpayers Association): Raymond Carlson, Griswold, LaSalle, Cobb, Dowd & Gin, (559) 584-6656. For the city: Lisabeth Rothman, Hatch & Parent, (310) 440-9996.

The City of Alameda's approval of a development and disposition agreement (DDA) with a developer for restoration of an historic theater and construction of a new theater and parking structure was a "project" under the California Environmental Quality Act, the First District Court of Appeal has ruled. The ruling was a loss for historic preservation advocates who did not challenge the City of Alameda's environmental review of the DDA when the city approved the study. Opponents of the Alameda project argued that the city should have conducted new environmental reviews when it approved the project design and use permits after signing the DDA. The opponents argued that a fair argument could be made that those subsequent actions may have a significant impact on the environment. But the court ruled that, because the mitigated negative declaration for the DDA was in place and unchallenged, the fair argument standard did not apply. Rather, the opponents had to show that the project or circumstances had changed, or that new information had become available. The opponents failed that test, the court ruled. The historic Alameda Theatre, a 1932 art deco structure designed by the firm Miller & Pflueger, is what has stirred preservationists. The theater is on the National Register of Historic Places and is important for Alameda's Park Street historic district. However, the building has sat mostly vacant since 1979. In 2000, the city began exploring options for rehabilitating the theater. After finding no interest in reopening the building as a single-screen cinema, the city pursued a larger project that involved restoration of the historic theater, and construction of a multi-screen cineplex and 350-space, six-story parking structure next to the existing theater. After a series of public meetings, the City Council, also acting as the Community Improvement Commission (Alameda's redevelopment agency board), approved a DDA with Alameda Entertainment Associates in early May 2005. Under the DDA, the city would acquire, assemble and prepare all of the necessary real estate, renovate the theater, build the parking garage and provide grants and loans totaling $2.9 million to the developer, which would build and run the new cineplex. In June, the Alameda Planning Board approved the designs of the cineplex and parking structure, and a use permit for the parking structure. Preservationists, calling themselves Citizens for a Megaplex-Free Alameda, appealed the decision to the City Council and urged preparation of an environmental impact report. On August 16, 2005, the City Council upheld the Planning Board and declined to do additional environmental review. On September 29, 2005, the Planning Board approved a use permit for the cineplex. Again, preservationists appealed and, again, the City Council on November 1, 2005, upheld the Planning Board and found no reason for further study. On October 3, 2005, the citizens group sued the city for allegedly violating the California Environmental Quality Act (CEQA). They argued that, under the fair argument standard, the mitigated negative declaration was inadequate. They also argued that, under the substantial evidence standard, the city had failed to address new information made available at the time of subsequent decisions. Alameda County Superior Court Judge Bonnie Sabraw ruled that the lawsuit was filed too late to challenge the mitigated negative declaration. Sabraw found that the group could challenge the subsequent August and November decisions — but not under the fair argument standard. The judge found that the substantial evidence standard applied, and ruled that substantial evidence supported the city's decision that the project had not changed and no new information warranting further study was available. A unanimous three-judge panel of the First District, Division Five, upheld Sabraw. On appeal, the citizens group argued that approval of the DDA did not amount to approval of a project under CEQA because other land use approvals were necessary. Thus, they argued, they should be allowed to challenge the mitigated negative declaration on which the subsequent decisions relied. The court disagreed. "Citizens' argument misapprehends the definition of ‘project,'" wrote San Francisco Superior Court Judge Maria Miller, sitting by assignment to the First District. "Under CEQA, ‘project' refers to the underlying activity which may be subject to approval by one or more governmental agencies; it does not refer to the each of the several approvals sequentially issued by different agencies. Here, the underlying activity is quite plainly the work agreed to by the parties to the DDA — the restoration of the Alameda Theatre and the construction of the cineplex and parking structure. This constitutes the ‘project' within the meaning of CEQA." Under the CEQA Guidelines, "approval" occurs upon the earliest commitment for funding or land use approvals, Miller continued. The DDA committed the city to acquire and assemble parcels, grant and loan specific amounts of money, perform demolition, grading and remediation work, renovate the theater and build the parking structure. "Our examination of these provisions leaves us with no doubt that the city's execution of the DDA constituted an ‘approval' as that term is defined in the Guidelines," the court ruled. Thus, preservationists had 30 days from the May 3 DDA approval to contest the mitigated negative declaration — a deadline the group missed by four months. Challenges to subsequent determinations by the city are subject to the more stringent substantial evidence standard. The citizens group argued that a report it commissioned by a local historian and testimony at an August historical advisory board hearing amounted to new information that should trigger preparation of an EIR. The court, however, determined that this information could have been known when the city adopted the mitigated negative and, therefore, did not require preparation of a new environmental document. The Case: Citizens for a Megaplex-Free Alameda v. City of Alameda , No. A114941, 07 C.D.O.S. 3376, 2007 DJDAR 4231. Filed March 29, 2007. Modified April 24, 2007 at 2007 DJDAR 5688. The Lawyer: For Citizens: Susan Brandt-Hawley, (707) 938-3908. For the city: Ellen Garber, Shute, Mihaly & Weinberger, (415) 552-7272. For Alameda Entertainment Associates: Donald Black, (707) 576-7850.

The City of Fresno's policy of not requiring mitigations for developments' impact on state highways is illegal, according to the Fifth District Court of Appeal. In an expansive ruling, the court stepped into the middle of the long-running feud between Fresno and Caltrans over mitigation fees. Fresno has refused to impose fees on new development to pay for highway improvements, because city officials said Caltrans could not justify the fees. "The policy is illegal because CEQA does not allow agencies to approve projects after refusing to require feasible mitigation measures for significant impacts," Justice Rebecca Wiseman wrote for the court. The unanimous three-judge panel also rejected the city's baseline for studying the project that brought about the litigation. The project is mix of offices, a shopping center and apartments on nearly 40 acres. In the environmental impact report, the city compared the impact of this project with impacts expected under full build-out of existing zoning for an office park, rather than comparing the project with the site's existing condition as vacant land. The court determined that the EIR was misleading. In December 2004, the Fresno City Council amended the general plan and the Woodward Park community plan, rezoned property and approved Zinkin Development Company's proposal for a 39-acre site at North Friant Road and North Fresno Street, one block off Highway 41. The project called for 274,000 square feet of offices, a 203,000-square-foot shopping center and, tentatively, 20 apartments. The city certified an EIR for the project and adopted a statement of overriding considerations because a variety of significant impacts could not be mitigated. The Woodward Park Homeowners Association and Valley Advocates sued, arguing that the city failed to require feasible mitigation for significant cumulative traffic impacts, performed an inadequate analysis of cumulative air quality impacts and project alternatives, rendered the general plan internally inconsistent and inconsistent with the community plan, and used an improper procedure to adopt the statement of overriding considerations. Fresno County Superior Court Judge Wayne Ellison rejected all of the project opponents' claims. The groups appealed a portion of the ruling, but the Fifth District actually expanded the issues. The court started with the environmental baseline. The city and developer argued that the EIR was adequate because it evaluated the project's impacts in relation to the vacant land and a hypothetical large office park permissible under existing zoning. That approach would have been acceptable, the court ruled, but it wasn't what happened. Instead, the EIR used the comparison with hypothetical development to obscure the project's true impacts, the court found. " he EIR never presented a clear or complete description of the project's impacts compared with the effects of leaving the land in its existing state," the court ruled. "Readers who have been told that the air pollution impact is slight and that the traffic generated will be less than the given benchmark should not have to stop and puzzle it out that these conclusions are based on a comparison with a large office park that is not, in fact, there. Those who did puzzle it out were still left wondering whether the impacts would be slight or major in relation to vacant land." The court found the EIR's required "no project" alternative invalid for similar reasons: The no project alternative was based on full build-out under existing zoning, not on leaving the site undeveloped. The court continued the theme into its consideration of the statement of overriding considerations. The court found that the EIR presented project alternatives as substantially more intensive than the proposed project, yet the statement of overriding considerations dismissed the alternatives as smaller and less economically beneficial. This misled the public, the court determined. The real difference between the project and alternatives was the inclusion of a shopping center in the Zinkin plan. "If the statement of overriding considerations had said accurately that the alternatives proposed ‘no shopping center or a smaller shopping center' instead of inaccurately ‘no development or development to a lesser degree,' it would have made a far different impression on the public. We do not have to look far to find a reason why the city might not have wanted to use the accurate language since many project opponents, especially neighbors, concentrated their fire on the shopping center component of the project," Justice Wiseman wrote for the court. Moreover, the city did not make the statement of overriding considerations available to the public prior to the public hearing at which the City Council approved the project. At that hearing, a city planner "misrepresented the contents of the statement" to a skeptical councilman, the court found. After identifying all of these legal inadequacies, the court considered the issue of highway mitigation. The city and Caltrans had argued about the number of peak hour trips the project would generate and the assessment of fees to fund offsetting Highway 41 improvements. Ultimately, Caltrans insisted on $306,000 to fund the project's fair-share of an $11 million southbound auxiliary lane. City staff members, however, advised the Planning Commission and the City Council that Caltrans had not provided adequate proof of a nexus between the project and the mitigation fee — and that charging such a fee would therefore be illegal. The city imposed no impact fee. In fact, the city has refused similar Caltrans' fee requests since at least 1998. "Simply stated: The city's practice is illegal," the court ruled. "There is no foundation for the idea that the city can refuse to require mitigation of an impact solely because another agency did not provide information. The seed of the city's confusion, as evidenced in the city staff report to the Planning Commission and City Council, is its belief that the city needs to require mitigation of this category of impacts only if Caltrans proposes a mitigation measure and then proves to the city's satisfaction that the measure is legal. This is not how CEQA works." "Here is another way of putting the point. The city may view this matter as a conflict between it and Caltrans. In referring to Caltrans in the context of this issue at oral argument, counsel for the city said it was ‘their issue' and argued that this court should not reach it because Caltrans had not appeared as a party. In reality, the conflict between the city and Caltrans is irrelevant to the city's obligation to require mitigation of impacts. The city's failure to resolve this conflict and require mitigation of these acknowledged impacts only punishes the public. CEQA does not permit this to happen," the court concluded. Although it rejected the EIR, the court did not find the project in conflict with the general and community plans. The Case: Woodward Park Homeowners Association, Inc. v. City of Fresno , No. F049481, 07 C.D.O.S. 3914, 2007 DJDAR 4948. Filed April 13, 2007. The Lawyers: For the homeowners association: Richard Harriman, (559) 226-1818. For the city: Geralyn Skapik, Burke, Williams & Sorensen, (951) 788-0100. For Zinkin Development: James McKelvey, Motschiedler, Michaelides & Wishon, (559) 439-4000.