Preservationists have won at least a temporary victory regarding a big-box home improvement store that is proposed for the site of an historic IBM building in San Jose. The Sixth District Court of Appeal upheld a trial court’s decision to reject the City of San Jose’s environmental impact report for a proposed Lowe’s Home Improvement Warehouse because of an inadequate analysis of a reduced-size project alternative. The city had accepted Lowe’s contention that any modification to the proposed 162,000-square-foot, single-story, rectangular structure with an adjacent surface parking lot was not feasible. But the Sixth District ruled, “Neither the FEIR nor the administrative record contains any meaningful detail or independent analysis of the validity of Lowe’s claim that the reduced-sized alternative is infeasible, and the City Council made no specific finding validating that claim.” More than three years ago, Lowe’s proposed one of its standard big boxes for an 18.75-acre site owned by IBM near Poughkeepsie and Cottle roads in south San Jose. The site contains Building 025, a 69,000-square-foot structure consisting of five wings connected by a narrow spine. Constructed during the mid-1950s, the building is considered an excellent example modern industrial architecture. In addition, IBM engineers invented the “flying head” disk drive, a major advance in computer technology, in Building 025. Lowe’s proposed to demolish Building 025. The company would build its store, garden center and parking lot on 13 acres, and later develop additional retail space on the rest of the site. The San Jose Planning Commission voted to certify the EIR, but the Preservation Action Council (PAC) appealed to the City Council. The preservation group argued that the EIR did not consider project alternatives that would allow Lowe’s to build a full-sized store and garden center while still preserving Building 025. The City Council denied the appeal, certified the EIR and approved the project. Preservationists then filed a lawsuit alleging the city had violated the California Environmental Quality Act (CEQA) by failing to analyze a reasonable range of alternatives, not adopting reasonable mitigation measures and alternatives, and not responding to comments suggesting feasible alternatives. Santa Clara County Superior Court Judge Leslie Nichols ruled for PAC, finding that there was not substantial evidence to reject a reduced-scale project alternative, that an alternative presented by PAC was “substantially different” from alternatives in the EIR and deserved study, and that the city had not adequately responded to comments. In an appeal filed by Lowe’s, IBM and the city, the Sixth District affirmed the trial court’s decision. The EIR had included a “project design alternative” that provided the square footage desired by Lowe’s but in a two-story configuration. The EIR also considered a couple variations of a “reduced-scale” store of 94,000 square feet. All of the alternatives would allow for retention of most or all of Building 025. Lowe’s responded that it has only two project sizes — 162,000 square feet and 137,000 square feet — and that it builds only single-story facilities with surface parking. Because San Jose is a large city, it must have the 162,000-square-foot model. Anything else would be infeasible because it would put Lowe’s at a competitive disadvantage, the company contended. The city apparently accepted Lowe’s contentions at face value. The City Council, which addressed only the two-story alternative, found that the project would cause “significant and unavoidable” impacts to historic resources but that no feasible alternatives had been proposed. The council also adopted findings of overriding consideration based on the project’s economic benefits. The Sixth District found the city’s approach lacking. “The sole basis mentioned in the FEIR to support the proposition that the reduced-size alternative was infeasible was Lowe’s belief that a smaller store would place it at a ‘competitive disadvantage’ in a ‘large market such as San Jose,’ due to its inability ‘to meet the demands and requirements of a large market store in terms of throughput and merchandise availability,’” Justice Nathan Mihara wrote for the court. “The mere fact that an alternative might be less profitable does not itself render the alternative infeasible unless there is also evidence that the reduced profitability is ‘sufficiently severe as to render it impractical to proceed with the project,’” Mihara continued, citing , (1988) 197 Cal.App.3d 1167, 1181. “The administrative record does not contain any evidence that the reduced-size alternative would be so much less profitable and produce so many fewer tax dollars that the project would be impractical.” The court also found that the EIR’s discussion of the reduced-size alternative was unclear because the size of the alternative was ambiguous. The court rejected PAC’s contention that its alternative was substantially different from those in the EIR, but the court agreed that the city’s responses to comments regarding alternatives “appear inadequate.” After the appellate panel issued its ruling, city officials said they would release a revised EIR this fall. The Case: , No. H028201, 06 C.D.O.S. 7205, 2006 DJDAR 10233. Filed August 8, 2006. The Lawyers: For PAC: Susan Brandt-Hawley, (707) 938-3908. For the city: Nora Frimann, city attorney’s office, (408) 277-4454. For Lowe’s: Arthur Friedman, Steefel, Levitt & Weiss, (415) 788-0900. For IBM: Ronald Van Buskirk, Pillsbury, Winthrop, Shaw, Pittman, (415) 983-1000.

Changes to redevelopment law that are short of sweeping but still significant enough to stir the industry won legislative approval this year. The measures tighten blight requirements, ease challenges to redevelopment decisions and potentially limit use of eminent domain, but the bills do not go as far as originally proposed. The redevelopment bills are probably the most significant land use bills passed by lawmakers during 2006, a year in which even modest housing, flood and environmental legislation failed. In fact, this was the quietest year for housing legislation in a while. Of course, lawmakers did pass a series of measures placing $37 billion worth of infrastructure and housing bonds on the November ballot. The redevelopment bills emerged from a series of legislative oversight hearings following the U.S. Supreme Court’s decision in , in which the court upheld use of eminent domain for economic development purposes. Because such an action could occur in California only under the guise of redevelopment, lawmakers focused on the Community Redevelopment Law and ultimately approved eight related bills. Throughout the session, redevelopment advocates continued to argue that did not change existing law in California and therefore the legislative response was unwarranted, even if politically inevitable. “It’s amazing to me that a case of such little legal significance should create so much political reaction,” said Brent Hawkins, general counsel of the California Redevelopment Agency (CRA). The cornerstone legislation is SB 1206, by Sen. Christine Kehoe (D-San Diego). According to a fact sheet from her office, the bill tightens the definition of “blight” by: • Requiring blight descriptions to contain “specific, quantifiable evidence.” • Requiring findings to be supported by “clearly articulated and documented evidence.” • Repealing an exception to blight finding requirements for antiquated subdivisions with small and irregular parcels. • Reinstating the ban on placing unblighted property into redevelopment project areas. • Mandating that land use findings link to local general plans and zoning standards. • Requiring local officials to document blight before merging redevelopment projects. “Kehoe correctly recognized that blight is the gateway to eminent domain by redevelopment agencies,” Hawkins said. The bill also increases state oversight by requiring local governments to send redevelopment plans and amendments in advance to the Department of Finance and the Department of Housing and Community Development for fiscal analysis and comment. The legislation also gives redevelopment opponents more time to challenge decisions via referendum or lawsuit, and eases the attorney general’s ability to intervene in those lawsuits. Although she amended her bill by decreasing some proposed requirements, Kehoe made clear that she thought some cities are abusing redevelopment and that the state — which backfills school districts that lose revenue to redevelopment agencies — should play a greater role. The California Redevelopment Association conceded that SB 1206 improved during negotiations. Still, in an analysis, the CRA stated, “Certain provisions changing and restricting the definition of blight and adding unnecessary, duplicative bureaucratic layers to the redevelopment process are objectionable to CRA.” Another Kehoe bill, SB 53, and SB 1809 (Machado) require redevelopment agencies to be clear up front about the possible use of eminent domain, while SB 1210 (Torlakson) alters the eminent domain process for all public agencies, in part by making it more difficult for agencies to obtain possession prior to a court decision on compensation. In contrast to the redevelopment reforms, a package of eight flood bills failed to escape the state Senate. Among the bills was AB 1899 by Assemblywoman Lois Wolk (D-Davis), which would have barred new development in areas lacking 100-year-flood protection and in areas that would not soon have 200-year protection. Other bills would have required cities and counties to share liability with the state for new levees (AB 1528 — Jones), and would have required cities and counties to consider flood protection when writing general plans (AB 802 – Wolk). The failure of the flood bills was a “big loss,” said Planning and Conservation League Executive Director Gary Patton, because there is a need to prevent additional flood-prone development. Patton’s group and other environmentalists worked hard on AB 1899. In fact, said Patton, there was little opposition in the Legislature to AB 1899. Instead, the bill stalled when Senate President Pro Tem Don Perata (D-Oakland) held it up, saying that he did not want to rush a major policy change. More than a few people noted that Perata held up AB 1899 and other flood bills opposed by the California Building Industry Association (CBIA) only days after the group donated $500,000 to a campaign committee controlled by Perata. “It was an effort by the building industry — on behalf of a few developers who are ready to get their entitlements in the next few years — to delay things,” Patton charged. Perata denied there was any connection between stalling the legislation and campaign contributions, and CBIA Vice President Tim Coyle said Wolk’s legislation “was just a blunt, unabashed assault on housing.” The debate should be about public safety and infrastructure, not about growth, Coyle contended. “This got started off on the wrong foot. It started out as a growth-control measure,” Coyle said. “If we don’t build one more home, there is still a risk of flooding in Sacramento and in Stockton.” Coyle said the various factions have a lot more in common regarding flood safety than people realize. “The homebuilders are for getting to 200-year flood protection,” he said. But bills that attack new housing and nothing else are not helpful, he contended. Wolk agreed that more needs to be done to protect people already living in harm’s way. But, she said, new subdivisions only compound the problem. “We continue to build in places that were under three feet of water or more twice in the last 20 years. We should just stop,” Wolk said. “There’s not enough public money in the world to fix a 19th Century levee system. And, besides, the public shouldn’t have to subsidize private speculation.” The disaster wrought by Hurricane Katrina provided lawmakers with an opportunity to address flooding issues in the Central Valley, where an estimated 500,000 people live in areas lacking 100-year flood protection. The Assembly approved eight bills that sought to discourage new development in flood-prone areas, improve planning and increase public notification, but the Senate never voted on the legislation. “The BIA was able to drive a wedge between the Legislature’s members, and the governor sat on the side and watched,” Wolk charged. The failure of a flood bill package means the state lacks updated policies for spending the $4 billion contained in Proposition 1E, lamented both Wolk and Patton. The state could end up spending the money immediately without addressing the land use patterns that have helped cause the problem, Patton said. Besides supporting the flood bills, environmentalists largely played defense against bills to overhaul the California Environmental Quality Act (CEQA), said Bill Allayaud, state legislative director for the Sierra Club. High on the hit list was SB 1800 (Ducheny), a multi-faceted bill backed by the Schwarzenegger administration and the CBIA aimed at easing housing development. “They basically were trying to drive a truck through CEQA,” Allayaud charged. “You could have this broad, sweeping EIR, and then 15 years later somebody could propose a subdivision and say the review has already been done.” The bill would have eliminated subsequent environmental review of projects that comply with a required “housing opportunity plan” that was the subject of an environmental impact report. But the CBIA’s Coyle said the CEQA provision was “a non-issue.” “CEQA has become kind of the third rail in California. You can’t even utter the words without people overreacting,” Coyle said. Instead, the heart of SB 1800 was a provision requiring cities to identify land to meet the need for 20 years worth of new housing, and zone land for 10 years of housing. “It’s a real simple idea that if we grow by a certain amount in these communities around the state, you’ve got to identify the land,” Coyle said. The bill emerged from lengthy talks between the CBIA and the League of California Cities. Ultimately, though, the league’s board voted not to support the legislation. The concept of a 20-year housing plan is not a bad idea, said Sande George, lobbyist for the California Chapter of the American Planning Association. But there were problems with SB 1800, especially the lack of funding to do the required planning and document updates, she said. “It was a huge change in planning law and would have cost an awful lot of money to implement,” George said of AB 1800. Both the CBIA and SB 1800 author Sen. Denise Ducheny (D-San Diego) have indicated they will try again next year with a 20-year housing plan mandate. Probably the most significant housing bill that did pass was AB 2511 (Jones). The bill includes a number of measures intended to strengthen anti-discrimination laws. It also requires local governments to decide within 90 days on a project if at least 49% of the units are affordable to very low- or low-income households, and limits conditions local governments may impose on housing developments. Additionally, the bill permits courts to sanction cities and counties for not filing annual general plan status reports — something that many cities and counties do not submit every year. League of cities lobbyist Bill Higgins said the final provision is a “poison pill” for cities. “This comes on the tail end of a lot of changes in the housing element law mandating a lot of new requirements. It’s death by 1,000 cuts,” he said. Although the league opposed AB 2511, Higgins conceded that bill language regarding permit streamlining is helpful because it actually defines an affordable housing project. Housing advocates favored AB 2511, although their support tempered over the months while the author, Assemblyman Dave Jones (D-Sacramento), reduced the scope of what started out as a very broad bill. Another bill that evolved greatly during the session was SB 1627 (Kehoe), regarding wireless telecommunications antennas. The bill started out as an industry-backed vehicle to eliminate virtually all local regulation of antennas. By the time lawmakers passed it, SB 1627 provided useful guidelines for regulation and for the application of CEQA, said Jonathan Kramer, a consultant to cities on antenna issues. “The original bill was just awful in terms of what would have been its impact on local governments and their ability to plan,” Kramer said. As passed, though, the bill requires carriers to be up front about their intentions for wireless facilities; otherwise, they have to start the environmental review process anew. “This will actually bring some clarity and some new options to cities and to carriers as to long-term site planning,” Kramer said. A bill that received a great deal of worldwide attention may ultimately be the most important land use bill of the year, according to Patton, of the Planning and Conservation League. The bill is AB 32 (Nunez) and it calls for California to reduce greenhouse gas emissions. Its approval by Gov. Schwarzenegger marked a sharp split within the Republican Party. The bill does not address land use directly, but curbing auto-dependent, low-density sprawl is an obvious way to limit emissions, Patton said. “This pattern of development is the antithesis of what we need to reduce global warming emissions,” Patton said. “We think AB 32 will ultimately be a driver of better land use.” Contacts: Tim Coyle, California Building Industry Association, (916) 443-7933. Assemblywoman Lois Wolk, (916) 319-2008. Gary Patton, Planning and Conservation League, (916) 444-8726. Bill Higgins, League of California Cities, (916) 658-8200. Sande George, California Chapter of the American Planning Association, (916) 443-5301 John Kramer, Kramer Firm, Inc., (310) 473-9900.

A plan that would overhaul the San Diego Bay waterfront in Chula Vista with a convention center, large hotels, as many as 2,000 housing units in towers up to 17 stories tall, and extensive parkland may be headed toward final approval after more than three years of work. The Chula Vista Bayfront master plan prepared by the Port of San Diego — which controls most of the land in the area — and the City of Chula Vista would remake what has been a mostly industrial waterfront with rather limited public access. “The whole goal of this is to get people down there,” summed up Laurie Madigan, assistant city manager for special projects. “It’s going to be a world-class waterfront,” said Richard Campbell, of Pacific Companies, which plans to develop the housing component. “I think everybody wants it.” Although the plan covers 550 acres of land, coastline and wetlands, two tightly concentrated projects are dominating the discussion. One is Gaylord Entertainment’s proposal for a 400,000-square-foot convention center, up to 2,000 hotel rooms, and ancillary restaurant and retail development on about 33 acres. The other involves a swap between the port district and developer Pacifica in which Pacifica would trade all or part of 120 acres of land next to a wildlife refuge for about 35 acres of brownfields owned by the port. Pacifica would then develop up to 2,000 housing units in the form of townhouses and mid- to high-rise condominiums. Pacifica also plans a 250-room hotel and up to 300,000 square feet of office space. Elsewhere in the master plan area would lie approximately 230 acres of parks and open space, a promenade, an improved harbor, and additional hotel, office and restaurant development. Although the city and port district began the planning process in 2003, they still have a long ways to go. The draft environmental impact report for the plan came out at the end of September, kicking off what could be a lengthy adoption process. The city and port district must work out financial agreements with Gaylord and Pacifica. The State Lands Commission must approve the swap between Pacifica and the port district. The Coastal Commission must bless the master plan, which would then allow the port district and city to issue actual development permits. And industrial brownfields, which have not been fully evaluated yet, must be cleaned up. Indeed, much of the site lies in a city redevelopment project area with an industrial past. A former 80-acre BF Goodrich Aerostructures Group campus that the port district now owns and the aging South Bay Power Plant are predominant. All of that will go away to make room for new development. Six years ago, Pacifica began planning to develop its land with up to 3,400 housing units, hotels, offices and retail space. The project met strong opposition from environmentalists because of the site’s sensitive location next to Sweetwater Marsh National Wildlife Refuge and Chula Vista Nature Center. As Pacifica began revising its project with fewer units, the port district started a master planning effort for its 420 acres. At environmentalists’ urging, the two planning processes were combined. However, the port’s land is state tidelands, which means it is limited to water-related uses such as shipping and energy production, tourism, navigation, environmental protection and recreation — but not housing. So city and port planners, with the assistance of a 30-member citizens advisory committee and the design firms Carrier Johnson of San Diego and Cooper, Robertson & Partners of New York, began work on a site design that ignored ownership. The idea was to choose the best design and work out ownership details later. They ended up designating three districts: The largely undeveloped Sweetwater District next to the wildlife refuge, a centralized Harbor District that would be heavy on visitor-serving uses, and the Otay District to the south, where housing would replace the power plant and other industrial uses. “Just as we were coming to the final process, we had a visit from Gaylord,” Madigan recalled of the first meeting with the developer in 2005. Gaylord Entertainment owns the Grand Ole Opry in Nashville and hotel/convention centers in the suburbs of Dallas and Orlando, and Gaylord is building a waterfront convention facility in Price George’s County, Maryland. In searching for a West Coast location, Gaylord looked at an eastern Chula Vista location in the massive Otay Ranch development. However, Madigan steered Gaylord to a 33-acre “event center” site proposed for the bay front’s Harbor District. Gaylord liked the waterfront idea but did not like the site, so the city and port district reworked the Harbor District plan to provide the company with an acceptable location closer to the bay. Two other developers — JMI Realty and Manchester Financial Group — also submitted convention center and hotel proposals, but they were smaller than Gaylord’s plan, Madigan said. In July, the city and port district signed a letter of intent with Gaylord under which the city and port district would provide up to $308 million for the project by committing revenues from hotel bed taxes, redevelopment tax increment and port leases. That amount is based on the need for $178 worth of infrastructure, plus $130 million needed to assist convention center construction, Madigan said. “The theory is that convention centers don’t make money, but they serve as a catalyst for redevelopment and for all of the other revenues we will receive,” Madigan explained. Randa Coniglio, area real estate manager for the port district, called the Gaylord project “the anchor for this plan. It provides the revenues for the public improvements that are needed.” Under the letter of intent, the city, port district and Gaylord have until May 2007 to reach a deal. Negotiations are ongoing. At the same time, the port and Pacifica are negotiating their land swap. Campbell said the company envisions about 1,700 units of condominiums and townhouses, as well as offices, and a hotel and retail space that would serve the convention center, which is something Gaylord wants. Campbell called the proposed park spaces “gorgeous” and said that the residential site offers great views. “Gaylord is the trigger that makes the entire project possible,” Campbell said. “I cannot think of anything negative that the Gaylord project does to our project. We feel we fit together very well.” Environmentalists have participated throughout the master plan process and, at this point, are not opposing the project. What sets the area apart is Chula Vista’s intact sensitive coastal habitat, including a large saltwater marsh, said Laura Hunter, a spokesperson for the Environmental Health Coalition and member of the master plan advisory committee. Past development proposals have not accounted for the natural resources in the way the master planning effort has. Still, Hunter is not ready to endorse the project until the port district and city decide on mitigation measures. She’s also concerned about Gaylord’s chosen development site. “We thought we had a plan. It got significantly changed,” Hunter said. “We don’t know how that is going to play out. We still have a ways to go.” Project proponents say development could start in 2008, but large coastal developments nearly always get delayed in permitting processes and litigation. “It’s the largest planning effort we’ve ever undertaken,” added the port district’s Coniglio. Contacts: Laurie Madigan, City of Chula Vista, (619) 691-5031. Randa Coniglio, Port of San Diego, (619) 686-7217. Richard Campbell, Pacifica Companies, (619) 296-9000. Bayfront master plan website: http://www.portofsandiego.org/projects/cvbmp/

The habitat conservation plan for the rapidly growing Natomas Basin in Sacramento and southern Sutter counties has been upheld by a state appellate court. The Third District Court of Appeal found that environmentalists had failed “to discredit the overwhelming evidence in support” of the habitat conservation plan (HCP) for the 53,000-acre basin. In its decision, the Third District repeatedly noted that a federal district court judge who had rejected an earlier version of the HCP has since upheld federal permits issued as part of the revised plan. The environmentalists who challenged the revised plan “have failed to demonstrate how the federal court’s analysis is faulty in the same way they fail to demonstrate the deficiencies in the volumes of evidence in support of the Department findings,” Justice Vance Raye wrote for the Third District. Located north of downtown Sacramento, the Natomas Basin provides the City of Sacramento’s major growth area (see , October 2005, September 1994, December 1992, June 1991). The basin also includes the Sacramento airport and portions of Sutter County where major growth has been proposed numerous times (see , December 2004, December 2002, November 1997, June 1995, July 1993, January 1993). However, the basin’s rice farms and open space are home to two endangered species, the Swainson’s hawk and the giant garter snake. In 1997, Sacramento adopted an HCP that permitted development to proceed in exchange for the developer-funded purchase of habitat elsewhere in the basin. In 2000, U.S. District Court Judge David Levi threw out the plan, primarily because not all parties required to implement the document had agreed to participate (see , June 2001). In 2003, a revised plan that included Sutter County was adopted. The policies in the revised plan, though, were essentially the same as in the 1997 original. The Natomas Basin Conservancy would use development fees to acquire 8,750 acres, equal to one-half acre for every acre of planned development. The conservancy would then manage the property specifically for the benefit of the endangered hawk and snake, and about 20 other species. Led by the Environmental Council of Sacramento (ECOS), environmentalists sued in state and federal court over the revised plan but lost at the trial court level in both venues. In its appeal of Sacramento County Superior Court Judge Gail Ohanesian’s decision, ECOS argued that the HCP was inadequate under both the California Environmental Quality Act and the California Endangered Species Act (CESA). In its opinion, the Third District boiled down environmentalists’ arguments to three assertions: The agencies failed to consider the impacts of a “joint vision memorandum of understanding” between the City of Sacramento and Sacramento County, as well as other potential development projects; mitigation measures are impermissibly unfunded, voluntary, unenforceable and infeasible; and the 0.5-to-1 ratio for land mitigation is inadequate. The court rejected all three assertions. In the months prior to revised HCP approval, the city and county adopted the memorandum of understanding (MOU) as a “roadmap” for future land use decisions. The MOU envisions development in Natomas Basin beyond the 17,500-acres contemplated by the HCP, but the agreement does not involve specific development proposals. Environmentalists argued that the MOU and general plan revisions that reflect the MOU had to be evaluated in the HCP’s environmental impact report. But the Third District said it was too early. “We agree with the trial court and the federal district court that an environmental analysis now of the unspecified and uncertain development that might be approved in the future under the joint vision MOU would be speculative, wasteful and of little value to the consumers of the EIR,” Justice Raye wrote. “Far too little is known about the scope, the location or the types of projects that might be proposed in the future to assist decision makers in evaluating any potential environmental tradeoffs.” Likewise, the court ruled, CESA does not require “wasteful speculation on potential projects yet to be conceived and described.” The court then turned to the mitigation measures. Environmentalists charged that the HCP assumes that large amounts of farmland will remain in agriculture, and that the maze of irrigation and drainage channels on which the snakes rely will remain in place even though the agencies that operate the channels are not parties to the HCP. But the Third District agreed with the federal court findings that the channels must remain open to drain farmland, that closure or filling of canals would require further federal review, that the HCP ensures water channels will remain connected, and that the Natomas Basin Conservancy will be able to influence decisions because the conservancy is a local water company shareholder. In addition, the HCP specifically states that it does not rely on the continuation of agriculture as a mitigation measure, the court noted. Regarding, the mitigation ratio, the court accepted the city and Sutter County’s conclusion that a one-for-one ratio was neither feasible nor necessary. The court also pointed out that the plan mitigates “in a variety of ways beyond the purchase of a half acre for every acre developed.” The plan requires the conservancy to manage habitat, and mandates pre-construction surveys to locate individual animals, avoidance of development within a mile of a hawk zone, the preservation and planting of nesting trees, and other measures. “Cognizant of their heavy burden to mitigate under both statutes, the city and Sutter fashioned an enormously comprehensive and integrated mitigation plan. Plaintiffs parse but one component from the integrated mitigation program, ignoring the broader context, the broader findings, and the broader evidence relied on by the agencies,” the court ruled. The court also rejected arguments regarding the adequacy of evidence to support the Department of Fish and Game’s CESA findings. “We will not arbitrate between scientists,” Raye wrote. The Case: , No. C049527, 2006 DJDAR 12175. Filed August 9, 2006. Ordered published September 11, 2006. The Lawyers: For ECOS: James Pachl, (916) 446-3978. For Sacramento: Clark Morrison, Morrison & Foerster, (916) 448-3200.

Lake Berryessa, a 30-square-mile federal reservoir in the hills northeast of the more famous Napa Valley, may be California’s most secret lake. But a new land use and management plan could change that by promoting a more high-end tourist activity than the lake has seen in the past. In fact, the very nature of the Lake Berryessa experience appears to be changing. The Lake Berryessa Visitor Services Plan adopted earlier this year by the Bureau of Reclamation calls for removal of about 1,100 mobile homes and recreational vehicles that are parked in seven “resorts” on federal land along the lakeshore, and erasure of many improvements built by the resort owners. In place of the trailer parks, the Bureau of Reclamation hopes to have private concessionaires develop facilities for short-term visitors, such as rental cabins, camping sites and possibly motels and other tourist facilities. The bureau’s record of decision “allows for the hospitality industry to suggest to us, based on their experience, what would work best in the concession areas,” said Pete Lucero, chief of recreation for the bureau’s Central California area office. The goal of the plan is to boost short-term visitor use of the 49-year-old lake, which now gets about 1.2 million visitors annually. “We expect to see a greater degree of recreational opportunities. We’re looking at a wholesale improvement for the general public,” said Lucero. “I believe that as more of the Bay Area population finds Berryessa to be a destination spot for more traditional activities, it (visitor use) will increase. And if it’s not an increase, it will be a more varied visitor population, rather than the same people returning every weekend.” However, the weekend regulars who own mobile homes, prefab houses, travel trailers and recreational vehicles in the resorts fought the new strategy throughout the administrative process. Their residences sit on federal property that is leased to contractors who have agreements with the federal government. Those seven contracts expire from 2007 through 2009. Under the approved visitor services plan, the owners must remove their residences from federal land at their own expense when the contracts expire, and the contractors must remove facilities and improvements that do not go along with new contracts. According to Hank Howard, head of the group Berryessa For All, about 200 people who live in the resorts full-time will lose their homes, and hundreds of other families who have been coming to the lake for decades are being kicked out. The group, which Howard says has about 750 members, is considering filing a lawsuit over the record of decision. “We think the document is highly flawed,” said Howard, who owns a manufactured home at the lake. The Bureau of Reclamation decision is arbitrary and capricious, and the agency is illegally taking private property, Howard charged. “One hundred percent of everything that exists in the seven resorts was permitted, inspected, reviewed and master planned by Napa County and the Bureau of Land Management,” Howard said. The vast majority of mobile homes at Berryessa are too old to be moved into other parks, so the bureau’s plan makes them less than worthless. Removal of the old units will cost upwards of $20,000 to $25,000 apiece, said Denise Trevor, a mobile home owner and Berryessa For All organizer. “We can’t just move these places,” she said. After six years of planning, environmental review and sometimes tense public meetings, federal officials have little patience for these arguments. A 2002 evaluation prepared for the bureau by Kleinfelder, Inc., found that infrastructure in the resorts, including water and wastewater systems, is in poor shape and needs extensive upgrades or replacement. Napa County officials agreed with the assessment. In a 2005 letter to the bureau, County Executive Officer Nancy Watt said the county “has recorded a history of assorted non-compliance issues, notice of violations, capacity failures, insufficient maintenance, missing or late inspection reporting and illegal discharges associated with a number of water and wastewater treatment facilities serving the concession areas at Lake Berryessa.” Many of the residences are not in any better shape than the infrastructure. Even Howard conceded there are as many as 400 “trailers that need to go.” Still, he said, it is unfair to lump together everyone as “exclusive long-term users” that are blighting the lake. Most of the trailers and mobile homes were moved onto the lakeshore during the 1960s and 1970s, and their precise administrative history is murky, although it may not matter much because there is no question they are located on federal land for which leases are about to expire. Napa County Conservation, Development and Planning Director Hilary Gitelman said the county has done no planning for the area because “it’s federal lands in federal jurisdiction.” “The main thing that the county has been concerned about all along is that the county spends a lot of resources out at the lake,” Gitelman said. The county estimates it spends $700,000 a year providing emergency services, health and safety services, and public works to the area. Supervisors in both Napa and Solano counties ended up endorsing the visitor services plan but there was some hesitation because of the housing unit removal. A number of trail advocacy, environmental and mountain bike groups also backed the project, saying it would encourage more use of the lake and surrounding federal lands while also increasing environmental sensitivity. And in her letter to the bureau, Napa County’s Watt wrote, “With Reclamation’s help, Lake Berryessa will become an asset for the citizens for Napa County for generations to come, rather than the liability that is has been for too long.” But that sounds like a harsh assessment to people like Trevor and Howard, who have been coming to their second homes on the lake for many years. “They paint the picture that there are trailers around the whole lake, which is ridiculous,” Howard said. The residences cover only about 4% of the shoreline, he said. “The problem with this whole thing is that at no time has any short-term user ever been turned away from the facility.” The bureau’s Lucero said officials are currently working on a prospectus for potential concessionaires. There is no strict timeline for the project because planned improvements are dependent on federal funding and the willingness of private investors, he said. Contacts: Pete Lucero, Bureau of Reclamation, (707) 966-2111. Hilary Gitelman, Napa County Department of Conservation, Development and Planning, (707) 253-4805. Hank Howard, Berryessa For All, (707) 645-8367. Visitor Services Plan website: www.usbr.gov/mp/berryessa

The California Supreme Court has recently accepted two land use cases and ordered an appellate court decision regarding fees to be depublished. One of the accepted cases permits the state high court to delve into the touchy issue of local authority over wireless telecommunications antennas. The second case involves an award of damages to the owner of an adult cabaret in San Bernardino who was subjected to an unconstitutional zoning ordinance. Exactly how far local governments may go in regulating antennas has been the subject of extensive litigation during recent years. In June, the Fourth District Court of Appeal upheld a San Diego County zoning ordinance that establishes a detailed permitting process for antennas — and said that a Ninth U.S. Circuit Court of Appeal decision striking down a similar ordinance in the City of La Cañada Flintridge was wrong (see , August 2006). The first question for the state Supreme Court is this: Do Public Utilities Code §§ 7901 and 7901.1 — which give “telephone corporations” the right to install lines and other fixtures in the public right-of-way — extend to wireless telecommunications providers? Lower courts have generally said yes. The larger controversy is over the second question for the state Supreme Court: Does a provision in § 7901.1 permitting local governments to control the ‘time place and manner’ in which telephone corporations access roads give a local government the ability to regulate the aesthetics of telecommunications towers in the public right-of-way? Cities and counties contend that they may use the § 7901.1 provision to regulate the location, height and appearance of antennas. Telecommunications companies argue that the state law does not extend to aesthetics. The case is , No. S145541. In the San Bernardino case, the owner of Flesh Night Club was awarded $1.4 million based on expenses and lost income from a 53-month period when the city enforced a zoning ordinance defining where adult businesses could locate. Although the club owner challenged the ordinance, the city got a court injunction permitting the city to enforce the ordinance. Flesh Night Club was in the wrong location under the ordinance, so the business closed. Eventually, the Fourth District ruled that the ordinance violated the First Amendment. The business owner sued for damages and a jury awarded $1.4 million, which the Fourth District upheld earlier this year (see , June 2006). The central question for the state high court is whether a city may be held liable for damages under the federal Civil Rights Act for obtaining a preliminary injunction to enforce an ordinance that is later found to be an unconstitutional impingement on free speech. The case is , No. S144492. The depublished case is , which appeared at 140 Cal.App.4th 261. In that case, the Fourth District upheld the city’s building inspection and plan check fees (see , August 2006). The ruling will stand, but it cannot be cited as precedent now.

CEQA • AB 1387 (Jones). Expands a CEQA exemption for urban infill to projects of up to 100 units with a minimum density of 20 units per acre. The projects also must be within half a mile of a transit stop and comply with the local circulation element. Signed by governor. • SB 832 (Perata). Expands an exemption for urban infill housing developments. Gutted. • SB 1191 (Hollingsworth). A major Republican overhaul of CEQA. Died. Flooding • AB 802 (Wolk). Requires cities and counties to account for flood safety in general plan updates. Died. • AB 1528 (Jones). Requires cities and counties to share flood liability with the state in areas protected by new levees. Died. • AB 1665 (Laird). The administration’s package, which includes requirements for levee evaluations, plans for levee upgrades and notification of property owners. Died. • AB 1898 (Jones). Requires property owners in Central Valley areas lacking 200-year flood protection to get flood insurance. Died. • AB 1899 (Wolk). Prohibits development on land that lacks 100-year flood protection and land that will not soon have 200-year protection. Died. • AB 2208 (Jones). Requires the state to identify landowners that benefit from levees, for the purpose of establishing fees. Died. • AB 2500 (Jones). Requires cities and counties to adopt safety plans as a condition of receiving money for levee upgrades. Died. • AB 3022 (Umberg). Increases flood insurance disclosure requirements. Died. General Plans • SB 44 (Kehoe). Requires all jurisdictions to adopt air quality elements that account for development patterns. Gutted. • SB 409 (Kehoe). Requires cities and counties to correlate the water supply portion of their conservation elements with their land use elements. Gutted. • SB 655 (Ortiz). Requires new mapping of areas with naturally occurring asbestos, identification of the areas in general plans, and disclosure to buyers if asbestos is present. Failed in Assembly. • SB 1059 (Escutia). Authorizes the California Energy Commission to designate electricity transmission corridor zones, and requires cities and counties to consider such zones when making land use changes. Signed by governor. Housing and Housing Elements • AB 350 (Matthews). Authorizes local governments in Alameda, Contra Costa, Santa Clara, San Joaquin and Stanislaus counties to create infrastructure finance districts in jobs-housing opportunity zones. Gutted. • AB 2158 (Evans). Requires regional housing needs assessments to consider local agency formation commission policies on growth. Vetoed by governor. • AB 2378 (Evans). Makes condominiums developed under density bonus provisions subject to a resale restriction to ensure affordability to moderate-income households. Died. • AB 2511 (Jones). Gives cities and counties 90 days to decide on projects in which at least 49% of units are for very low- or low-income households, bolsters anti-discrimination laws, and permits courts to sanction local governments for not filing annual general plan status reports. Signed by governor. • AB 2634 (Lieber). Requires housing elements to provide for households that have incomes of 30% of median. Signed by governor. • AB 3042 (Evans). Establishes a procedure for cities and counties to transfer shares of regional housing needs. Died. • SB 1322 (Cedillo). Requires cities and counties to make emergency shelters and group homes by-right uses in certain zones, and to account for emergency shelters in general plans. Vetoed by governor. • SB 1432 (Lowenthal). Amends the Mello-Roos Community Financing Act in multiple ways, including a provision that permits use of Mello-Roos bonds for affordable housing development. Vetoed by governor. • SB 1800 (Ducheny). Makes numerous changes to housing element law and CEQA to ease housing construction. Died. Redevelopment • AB 773 (Mullin). Increases from 30 days to 90 days the time in which voters may prepare a referendum of a redevelopment ordinance. Signed by governor. • AB 782 (Mullin). Removes as a basis for establishing a redevelopment project area the existence of small and irregular lots. Signed by governor. • AB 1162 (Mullin). Places a moratorium until 2008 on redevelopment agencies taking by eminent domain an owner-occupied residential property if the property is to be transferred to a private entity. Died. • AB 1893 (Salinas). Prohibits a redevelopment agency from using tax-increment financing to fund the development of a city hall or county administration building. Signed by governor. • AB 1990 (Waters). Prohibits use of eminent domain if the real property being acquired is to be transferred to a private entity. Died. • AB 2922 (Jones). Stiffens affordable housing covenants for subsidized projects and increases tenants’ rights. Vetoed. • ACA 22 (La Malfa), SCA 15 and SCA 20 (McClintock). Constitutional amendments to restriction use of eminent domain. Died. • SB 53 (Kehoe). Requires redevelopment plans to explain where, when and how officials will use eminent domain, and requires agencies to document blight before extending the time period for use of eminent domain. Signed by governor. • SB 1206 (Kehoe). An overhaul of the Community Redevelopment Law that tightens the definition of blight, makes it easier to file legal challenges and referendums, and increases state oversight. Signed by governor. • SB 1210 (Torlakson). Makes numerous changes to how all public agencies carry out eminent domain actions. Signed by governor. • SB 1329 (Alquist). Authorizes redevelopment agencies to award planning grants and other financial incentives to supermarkets and other grocers to assist with planning and building supermarkets in underserved areas. Amended and died. • SB 1650 (Kehoe). Restricts how agencies may use property taken by eminent domain. Signed by governor. • SB 1809 (Machado). Requires local officials to add information about possible use of eminent domain to required statements. Signed by governor. Other • AB 1020 (Hancock). Requires Caltrans and regional transportation agencies in most urban areas to prepare new transportation models that better account for land uses policies. Vetoed by governor. • AB 1766 (Dymally). Permits enterprise zones to request 25-year extensions. Died. • AB 1785 (Bermudez). Increases by $55 million annually the money available for railroad grade separation projects. Died. • AB 2223 (Salinas). Extends until 2104 expedited procedures for cities to annex unincorporated islands. Signed by governor. • AB 2762 (Levine). Permits 16 Indian tribes to join the Southern California Association of Governments. Vetoed by governor. • SB 625 (Battin). Authorizes the Department of General Services to offer surplus land to local governments at fair market value. Died. • SB 1230 (Florez). Creates a clean air enterprise zone within the San Joaquin Valley, requires the state to provide low-interest loans to certain clean businesses in the zone, and expedites permitting. Vetoed by governor. • SB 1523 (Alarcon). Requires cities and counties to prepare economic impact reports for proposed big-box retail stores. Vetoed by governor.

A local agency formation commission may impose as a condition on its approval of the incorporation of a new city the requirement that voters support a general tax funding the new city, the attorney general’s office has concluded. The question came from the San Diego County LACFO. With a couple incorporation drives in the works, the agency wanted to determine what conditions it could impose on formation of a new city, explained San Diego LAFCO Executive Officer Michael Ott. One possibility is having voters decide on both incorporation and a general tax at the same time, and requiring that the tax receive approval for incorporation to be valid. But, said Ott, “There had been some question as to whether a dual ballot question was legal.” Ott said the agency’s attorney had determined a dual ballot question was legal. With a very straightforward reading of the Cortese-Knox-Hertzberg Local Government Reorganization Act (Government Code §§ 56000 – 57550), the attorney general agreed. In the opinion, Deputy Attorney General Gregory Gonot noted that § 56886 permits LAFCOs to impose conditions on incorporations, including the levying of assessments and fees “or the approval by the voters of general or special taxes.” “General taxes constitute one of a ‘virtually limitless array of factors’ upon which a LAFCO may condition its approval of a change of organization,” Gonot wrote, citing , (1992) 3 Cal.4th 903, 912. Seven years ago, the attorney general concluded in 82 Ops. Cal.Atty.Gen. 180 (1999) that a LAFCO could condition approval of a change of agency organization upon the continued collection of previously established taxes. In that opinion, the attorney general concluded that the then-Cortese-Knox Act complemented — rather than conflicted with — the state constitution’s requirements for voter approval of general tax increases. In the question raised by the San Diego LAFCO, approval of the tax and incorporation would take place at the same time, which would be permissible, Gonot concluded. The San Diego LAFCO has not imposed such a condition on incorporation but is considering doing so for the proposed city of Rancho Santa Fe, Ott said. “It gives incorporation proponents another tool to achieve feasibility, especially in light of the revenue-neutrality requirements that have been in effect since 1992,” Ott said. The San Diego LAFCO also raised the question of whether the imposition of such a condition would require a two-thirds vote of the LAFCO board. Proposition 62, a 1986 follow-up to Proposition 13, requires that a resolution proposing a general tax be approved “by a two-thirds vote of all members of the legislative body of the local government.” Gonot concluded that the Proposition 62 provision would not apply here because “LAFCO does not have the authority to ‘impose’ a tax.” Instead, all LAFCO can do is condition formation of the new city on voters’ approval of a tax, he wrote. In a letter to Ott analyzing the attorney general’s opinion, San Diego Senior Deputy County Counsel William Dean Smith called the attorney general’s answer to the Proposition 62 question “reasonable but still subject to potential challenge should LAFCO not achieve a two-thirds vote of all its members in approving an incorporation subject to a general tax condition.” Attorney General’s Opinion 06-210 was issued August 11, 2006. It may be found at 06 C.D.O.S. 7473, and 2006 DJDAR 10697.

Should Californians vote to “protect our homes,” or should they vote against a “taxpayer trap?” This, in a nutshell, is the campaign about Proposition 90, the property rights initiative on the ballot in November. And, given the way initiative campaigns go in California, a nutshell is all the voters will ever debate. But in planning and development circles, the debate about Proposition 90’s impact is raging because there is little question that if Proposition 90 passes, it will be the most disruptive event in California planning since approval of Proposition 13 in 1978. Riding the post- wave, Proposition 90 supporters advertise the initiative as an anti-eminent domain measure that would limit the government’s ability to take homes. It would amend the constitution to narrow the use of eminent domain to uses involving public ownership. But Proposition 90 is also a regulatory takings measure. It would amend the constitution to require compensation for downzonings and other land use regulatory actions that result in “substantial economic losses” to a property owner unless public health and safety is at stake. Although the eminent domain provisions are strong, it is the regulatory taking provisions that cause concern among state and local government officials – especially because the supporters virtually never mention regulatory takings in their campaign. If Proposition 90 passes, said David Jones, a California Redevelopment Association lobbyist, “We may never see another general plan revision in California again.” Proposition 90 is one of six property rights initiatives on the ballot in Western states this year. Similar measures will appear on the ballot in Arizona, Idaho. Montana, Nevada, and Washington (see , August 2006). All use some variation of the “protect our homes” theme. All are backed and at least partly bankrolled by Americans for Limited Government ( www.getliberty.org ), a New York-based group led by libertarian Howard Rich. Whatever the odds of a “Protect Our Homes” initiative passing in Montana or Arizona, Proposition 90 appears vulnerable in California. Most Republican legislators have signed onto it, as have about two dozen local elected officials, including one Democrat, Orange County Supervisor Lou Correa. The Orange County Register and the Long Beach Press-Telegram have editorialized in favor of it. But the polls are close, and opponents claim that the more voters hear about Proposition 90, the more likely they are to oppose it. Furthermore, most major business and development groups are against it. And property rights have rarely gotten the same kind of traction in California that they get in other Western states. This list of opponents includes a number of surprises: the Chamber of Commerce, the California Building Industry Association (which represents homebuilders), the California Farm Bureau Federation (representing agricultural landowners, who own most of the private undeveloped land in the state), and the California Business Properties Association (which represents commercial and industrial property owners). In a prepared statement, Farm Bureau president Doug Mosebar said the initiative “threatens farmland-protection measures and ‘right-to-farm’ laws that prevent leapfrog development and protect family farms and ranches.” Rex Hime, president of California Business Properties Association, told the : “Because it deals with regulatory taking, this opens up so many cans of worms in the current land use process. …We think it will create a dysfunctional legal nightmare.” “Dysfunctional legal nightmare” may be a bit much, but there is little doubt that Proposition 90 would impose a huge set of changes on the regulatory system that would take years and many lawsuits to sort out – just as the passage of Proposition 13 did starting in the late ’70s. Proposition 90 would amend Article I, Section 19, of the California Constitution, which specifies that private property may be “taken or damaged” for public use, and then only when just compensation is paid. The measure would amend the Constitution to state that “private property may not be taken or damaged for private use.” In the context of eminent domain, the measure would specifically limit the use of the property acquired by eminent domain so that it would be “owned and occupied” by a public agency for the public use originally stated. If the public agency that acquired the property doesn’t use it for the “stated public use,” the original owner gets to buy it back at fair market value – and then the owner is permitted to reclaim his or her lower base tax year under Proposition 13. But Proposition 90 would define “public use” so that it is narrower than “public purpose,” and would specifically prohibit transfers of land obtained via eminent domain “to non-governmental owners on economic development or tax revenue enhancement grounds.” However, it would apparently permit private companies to operate, if not own, public facilities on land acquired by eminent domain. The measure specifically calls out privately operated toll roads and prisons as “public use.” (Such “privatization” is a favorite of the Reason Public Policy Institute in Los Angeles, whose parent foundation supports the initiative.) The value of property taken by eminent domain must be the highest value available based on the government’s intended use, and the value cannot be discounted based on the assumption that the government would impose exactions or require dedications of the property were it developed privately. For routine land use planning, the key provisions involve the definition of “damage” to private property. Under Proposition 90, the government cannot “damage” private property without compensation. The measure specifically lists downzoning, elimination of access to private property, and “limitations on the use of private air space” as examples. The measure also specifically exempts Public Utility Commission rate regulations, emergency situations, and nuisances such as “blight, obscenity, pornography, hazardous substances, or environmental conditions” but circumscribes those exemptions to individual parcels. The measure also exempts government actions taken to protect public health and safety. In essence, Proposition 90 would permit downzonings for health and safety, but not for public welfare. The key phrase is Proposition 90’s definition of damage – “substantial economic loss to private property.” The measure does not define a “substantial economic loss,” so one inevitable lawsuit would be a test case asking the California Supreme Court to provide a definition. In the meantime, local governments seeking downzonings could do an analysis concluding that no substantial loss is involved. In addition, it seems likely that local planning departments will stretch the definition of “health and safety” as far as possible, because most planning relies on public welfare as the primary justification for use of the police power. Many more land use restrictions may be passed by relying on floodplains, seismic hazards and the like. The final area of contention would likely be the nuisance exemption. Specifying “blight” as a nuisance that’s not subject to Proposition 90 opens the possibility that land use restrictions in redevelopment areas might be permissible, while the phrase “environmental conditions” opens another possible door for local governments. But the courts would have to decide how narrowly to interpret Proposition 90’s requirement that nuisance be limited to individual parcels. Would only blighted parcels in redevelopment areas be exempt? Would this mean that redevelopment agencies – currently battling against a similar impulse in the Legislature – have to define blight on a parcel-by-parcel basis? Would downzoning a particular parcel in order to reduce the amount of traffic being generated – thus alleviating problematic “environmental conditions” – be acceptable? No one knows at this point. And that is the biggest concern about Proposition 90: It is written so broadly that local governments would be encouraged to find creative end-runs, which would lead to years of litigation. Welcome to Proposition 13 redux.

The life of a tentative map for a subdivision may be extended for up to five years if the map is subject to a local development moratorium, but the map does not live on if the moratorium continues for more than five years, the First District Court of Appeal has ruled. The court determined that a subdivision map originally approved by the City of Half Moon in 1990, but caught up in an eight-year sewer connection moratorium, expired before action was taken to finalize the map. The court also rejected the developer’s arguments that because two different moratoriums were in effect, the map was eligible for two separate time extensions. The court further dismissed the developer’s attempt to keep the map alive administratively by filing, before the apparent expiration date, a final map that did not comply with tentative map conditions. The developer, Ailanto Properties, filed in 1987 an application for a 228-lot vesting tentative map on 114 acres. Ailanto also sought planned unit development zoning. To offset some environmental concerns, the developer whittled the project to 216 lots. The Half Moon Bay City Council certified an environmental impact report and approved the tentative map and zoning in August 1990. One of the conditions of map approval was that Ailanto get a coastal development permit from the Coastal Commission. At the time, Ailanto’s property was subject to a Coastside County Water District water service moratorium, which was lifted in March 1994 when the district secured a new water supply. This moratorium caused the Coastal Commission to return Ailanto’s application in 1991 for the lack of sufficient water rights. Just at the time the Coastal Commission kicked back the application, the city adopted a sewer connection moratorium because the wastewater treatment plant needed expansion. The sewer moratorium lasted from March 1991 until March 1999. Thus, for three years, the project was subject to both a water moratorium and a sewer moratorium. During the sewer moratorium, the authority for coastal development permits shifted from the Coastal Commission to Half Moon Bay, which had adopted a local coastal program. Only days before the sewer moratorium expired, the city approved Ailanto’s coastal development permit application but further reduced the project to 197 lots. The project still ended up before the Coastal Commission when opponents appealed the city’s permit approval. In February 2001, the Coastal Commission upheld the city’s decision but cut the size of the subdivision even more and required that Ailanto retire development rights on an equal number of substandard lots elsewhere in town. Ailanto then sued over those conditions in litigation that is pending separately. In May 2001, Ailanto filed a phased final map with the city and provided supplemental material on August 6, 2001 — one day before the map, with moratorium-related and other extensions, apparently would expire. The city rejected the application because it did not comply with the tentative map conditions, specifically the requirement for a coastal development permit. Before the city rejected the final map, though, Ailanto filed a lawsuit seeking a court declaration that the life of its tentative map had been extended for the entire eight years of the sewer moratorium, that the separate water moratorium also extended the map’s life, and that filing of the phased final map was enough to start a new 36-month extension. Ailanto lost its moratorium arguments in San Mateo County Superior Court, but the court did rule that the developer’s delivery of the phased final map was adequate to trigger a 36-month extension of the vesting tentative map. Both sides appealed, and a unanimous three-judge panel of the First District ruled entirely for the city. The moratorium debate centered on Government Code § 66452.6, a section of the Subdivision Map Act. Ailanto argued that the statute limits local moratoriums — not tentative map extensions — to five years. The court undertook a lengthy discussion of the legislative history and found that from 1977 to 1986 the statute clearly limited the time that a tentative map could be extended because of a moratorium. The Legislature has amended the law several times since, making the language a bit ambiguous but apparently never changing the intent regarding map extensions. “In summary, the legislative history of § 66452.6 points us to the conclusion that the five-year limit in subdivision (b)(1) was intended by the Legislature to apply to the length of the moratorium-related tolling of the expiration of a tentative map and not to the duration of the development moratorium itself,” Justice Mark Simons wrote for the court. Ailanto also argued that multiple moratorium extensions applied, and cited , (1993) 15 Cal.App.4th 892 (see , June 1993). In that case, the court ruled that the city’s adoption of a growth management ordinance and delays in adopting a subarea facilities plan amounted to a moratorium that extended the life of a tentative map, even after a “friendly moratorium” had earlier prolonged the map. Ailanto argued that stood for the proposition that multiple moratoriums can extend the life of a tentative map by more than five years. But the First District rejected the argument, finding that “this issue was not addressed or even mentioned by the court.” The city’s appeal concerned a 36-month extension the Subdivision Map Act provides each time a phased final map is submitted before the tentative map expires. The city argued that Ailanto submitted a phased final map in a form that the city could not approve, meaning the tentative map did not qualify for an extension. Ailanto conceded it lacked the coastal permit required as a condition of tentative map approval, but the developer contended the statute did not require the filing of documents that are “approvable.” Here, the court found § 66452.6, subdivisions (a) (1) and (d) unambiguous. The lack of a coastal development permit was a “significant deficiency” and “a map that does not conform to the approved or conditionally approved tentative map may not be filed for approval by the legislative body,” Simons wrote. Despite the court’s ruling, the project is not dead. Two years ago, the city, Ailanto and the Coastal Commission entered into a settlement agreement which centers on approval of the coastal development permit, according to attorney Rick Jarvis, who represents Half Moon Bay. Working out that permit has been a slow process, for which the First District did not want to wait. Project opponents filed a California Environmental Quality Act lawsuit over the settlement agreement, but a Superior Court dismissed the suit in 2005. “The parties are still all behind the settlement agreement,” Jarvis said. The Case: , No. A098920, 06 C.D.O.S. 8214, 2006 DJDAR 11728. Filed August 30, 2006. Modified September 18 at 2006 DJDAR 12602. The Lawyers: For Ailanto: Robert Lanzone, Aaronson, Dickerson, Cohn & Lanzone, (650) 593-3117. For the city: Rick Jarvis, Jarvis, Fay & Deporto, (510) 238-1400.

A unanimous California Supreme Court has upheld lower court decisions rejecting an advertising company’s claim that it deserves compensation because trees planted along a public street obstructed visibility of six billboards. The state high court denied Regency Outdoor Advertising’s inverse condemnation claim and also rejected Regency’s arguments that the trial court had erroneously awarded the City of Los Angeles about $100,000 in costs, including $80,000 in expert witness fees. “ e conclude that owners and occupiers of roadside property do not possess a ‘right to be seen’ that requires the payment of compensation for municipal landscaping efforts having no injurious effect on any property rights other than the claimed right to visibility,” Justice Carlos Moreno wrote for the court. The court further held that compensation provisions in the state’s Outdoor Advertising Act do not apply because they speak only to intentional sign removal or limitations on use of billboards, not to incidental loss of visibility. To spruce things up for the 2000 Democratic National Convention, the City of Los Angeles planted mature palm trees and placed lighted pylons along Century Boulevard, the primary route into Los Angeles International Airport. Regency at the time complained that the landscaping made at least six of its billboards less visible to Century Boulevard motorists. Claiming the city must pay compensation for the allegedly reduced value of its signs, Regency then filed an inverse condemnation lawsuit. Prior to trial, the city offered to settle the lawsuit by removing one tree and paying Regency $1,000. The company rejected the offer, so the matter went to trial, after which Los Angeles County Superior Court Judge Jean Matusinka ruled for the city. Relying on different legal footing than Matusinka used, the Second District Court of Appeal upheld the trial judge’s decision on the merits and the award of costs (see , May 2005). Regency got no further at the state Supreme Court. In the inverse condemnation claim, Regency argued that it has an “abutter’s right” to have its property seen from the adjacent public street. The court did find that there is extensive case law on the rights of those who own property along a public street, including a “right to be seen.” However, the court also found that the “right to be seen” cases concerned a physical taking of loss or access, neither of which Regency suffered. “ he virtually unanimous rule provides that there is no freestanding right to be seen, and that the government need not pay compensation for any lessened visibility,” Justice Moreno wrote. As for a partial takings, the court cited its nearly century-old decision in , (1907) 150 Cal. 592, a case in which the court acknowledged the rights of a property owner whose shop was blocked by the construction of an electric railway switching tower on the sidewalk in front of the shop. “We follow the weight of authority and conclude that Regency has no visibility right warranting compensation here,” Moreno wrote. “It bears emphasis that , the first decision in this state recognizing any ‘right to be seen,’ qualified its holding by noting that ‘any obstruction to the use of the street which impairs or destroys an abutter’s easements is a private injury.’ Our careful phrasing implied that activity that comports with the fundamental purposes served by the roads does not produce a private injury. The planting of trees along a road is, in general, fully ‘consistent with the road’s use as an open public street’ ( , (N.Y. App.Div. 2002) 744 N.Y.S.2nd 438, 439), and in fact may enhance both travel and commerce along the street.” Furthermore, the court noted, Regency has not shown that the landscaping reduced the billboards’ value. Regency also argued that Business and Professions Code § 5412, a portion of the Outdoor Advertising Act, directed that the company receive compensation because the city had effectively removed or limited the use of the billboards. The statute prohibits the government from blocking “customary maintenance and use” of a billboard, and Regency argued that the tree planting denied the company such maintenance and use. The court ruled first that the city clearly did not remove the billboards. Secondly, the court said that Regency was reading § 5412 too broadly, and that the compensation requirements of the statute do not “pertain to municipal landscaping efforts that may incidentally impair the visibility of nearby advertising facings.” “Regency has offered no evidence establishing that the trees at issue were planted along Century Boulevard for the purpose of blocking its billboards from view — indeed, the evidence adduced at trial was to the contrary,” Moreno wrote. As for the costs awarded to the city, the court rejected all of Regency’s arguments, including the contention that city expert witness fees incurred prior to a settlement offer were not eligible. Since the court issued its decision, Regency has filed a request for a re-hearing, a potential step toward asking the U.S. Supreme Court to review the case. The Case: , No. S132619, 06 C.D.O.S. 7197, 2006 DJDAR 10276. Filed August 7, 2006. The Lawyers: For Regency: Michael Berger, Manatt, Phelps & Phillips, (310) 312-4000. For the city: Eduardo Angeles, city attorney’s office, (310) 646-3260.

Property owners who received an $850,000 loan from the Carson Redevelopment Agency must return the money because they acquiesced to the mayor’s demand for a $75,000 bribe, the Second District Court of Appeal has ruled. The property owners contended the court did not have to void the loan agreement because the corrupt public official did not have a direct interest in the agreement. They also argued that the court should consider remedies other than disgorgement of the $850,000. The court expressed sympathy to the property owners, but said that legal precedent and public policy mandated the case’s outcome. “A public contract obtained through an extortion payment is not valid, and no one should believe that it is valid. A bright line rule is required,” Justice Judith Ashmann-Gerst wrote for the unanimous three-judge panel. Michael and Bertha Padilla own the 45-unit Camino Senior Village apartment complex in Carson. In 1994, they signed a contract with the city’s redevelopment agency under which the agency agreed to provide rental assistance for six years of up to $295 a month per qualified tenant, up to a maximum of 22 units. In exchange, the Padillas agreed to provide 22 units as low-income senior housing for 30 years. In 1999, the Padillas asked the agency to extend the rental assistance for another 24 years and to include all 45 units. The agency responded with a proposed “buydown agreement” in which the agency would provide the Padillas an $850,000 forgivable loan to be used for buying down their existing mortgage. In exchange, the Padillas would restrict tenancy in 44 units to low-income people at least 55 years old for 24 years. Then-Mayor Agapito “Pete” Diaz Fajardo told Michael Padilla he would have to pay $75,000 to get the City Council and the redevelopment agency board to approve the new agreement. The Padillas paid the bribe and got the new agreement. The FBI indicted Fajardo in late 2002 for extorting money from the Padillas and attempting to extort another bribe from a bidder on a city public works project (see , January 2003). Padilla pleaded guilty in early 2003 and eventually was sentenced to 15 months in federal prison. The Carson Redevelopment Agency sued the Padillas, seeking avoidance of the buydown agreement and return of the $850,000. Los Angeles County Superior Court Judge Haley Fromholz ruled for the agency and ordered the Padillas to repay the $850,000 plus interest. On appeal, the Padillas argued that under Government Code § 1090, a public contract is not void unless a public official is financially interested in the contract. Although Fajardo received an illegal payment, he did not get paid with public funds and therefore did not have a cognizable financial interest in the contract, the property owners argued. However, the court ruled that Fajardo’s conflict of interest was plain and was covered by § 1090, which prohibits a public official from having an interest in a public contract that he created. “ ection 1090 is aimed at interest, other than an interest that is too remote or speculative, that could compromise a public official’s judgment or cast doubt on whether he executed his duties with the utmost allegiance, diligence, and loyalty to his office,” Ashmann-Gerst wrote. Here, the extortion payment created Fajardo’s financial interest in the contract, the court ruled. “ he term ‘financially interested’ in § 1090 cannot be interpreted in a restricted and technical manner,” the court ruled. “The sweep of § 1090 is broad; within its reach comes any interest that might deter a public official from the most righteous and noble path of civil service.” The Padillas also argued that requiring them to disgorge the $850,000 was unfair punishment of the victims of extortion. They said the court should consider the facts of the case before determining the appropriate remedy. The Second District, though, ruled that disgorgement is “automatic.” The court sited , (1985) 38 Cal.3d 633, in which the state Supreme Court ruled that an Albany city councilman who sold his land to the city through a third party had to return the payment he received for the land, while the city got to keep the land. “More recently,” Ashmann-Gerst wrote, , (2001) 91 Cal.App.4th 572, “held that a public entity is entitled to recover any compensation it paid under a tainted contract without restoring any of the benefits it received. By logical import, interpreted as a binding precedent holding that the disgorgement remedy is automatic. … Also, as a policy matter, it is the most effective way to give § 1090 all the teeth that it needs.” The Case: , No. B184629, 06 C.D.O.S. 5948, 2006 DJDAR 8423. Filed June 28, 2006. The Lawyers: For Carson Redevelopment Agency: William Wynder, Aleshire & Wynder, (949) 223-1170. For Padilla: Jay Coggan, (310) 407-0922.