Tulare County owes the Dinuba Redevelopment Agency property tax-increment dollars that the county erroneously distributed to itself and nine other local government agencies, the Fifth District Court of Appeal has ruled. Tulare County officials had miscoded certain parcels within the City of Dinuba’s redevelopment project area. The county agreed to correct the errors prospectively but not retroactively. The city sued for all underpaid tax increment from the 1997-98 through 2003-04 fiscal years, and the Fifth District ruled for the city. A 2002 audit conducted for the Dinuba Redevelopment Agency discovered that some parcels had been miscoded and that the agency had not received tax increment from those parcels for the 2002-03 fiscal year and the previous four fiscal years. Tulare County agreed to correct the errors for the 2002-03 assessment roll, but refused to make retroactive changes or pay the wrongly collected tax revenue. Dinuba sued for the underpaid taxes beginning with the 1997-98 fiscal year. The county filed a demurrer, saying that the disputed tax revenue had already been distributed to other agencies and the county could not be required to make payments to Dinuba from the county general fund, and that the county was immune from liability under the Government Code. Tulare County Superior Court Judge Patrick O’Hara ruled for the county but allowed the city to amend its lawsuit. The city did so, but in July 2004, O’Hara sustained a second demurrer filed by the county. O’Hara ruled the county was immune under Government Code § 860.2. The city appealed, and a unanimous three-judge panel of the Fifth District overturned the lower court. On appeal, Tulare County continued to maintain that it was immune based on the Tort Claims Act (Government Code § 810 et seq.), under which public entities are not liable for injuries “except as otherwise provided by statute.” The specific section on which O’Hara based his ruling provides immunity for an “act or omission in the interpretation or application of any law relating to a tax.” “However,” Fifth District Justice Herbert Levy wrote, “to make this ruling, the court must have first concluded that appellants were suing in tort, not contract. Government Code immunities only extend to tort actions that seek money damages.” Levy then cited several cases in which courts ruled that money wrongfully withheld by a public agency was a matter of contract, including , (1974) 11 Cal.3d 113, and , (2003) 112 Cal.App.4th 950. Dinuba is “entitled to the tax increment revenue by statute,” Levy wrote for the Fifth District. “Thus, appellants are essentially seeking the release of property that is rightfully theirs but that was wrongfully detained. This is not an action for damages against the sovereign. Rather, the complaint is based on breach of a contractual duty. Accordingly, Tulare is not immune under Government Code § 860.2.” The exact amount of money the county owes the redevelopment agency is unclear. The county may ask the state Supreme Court to accept the case. The Case: , No. F046252, 06 C.D.O.S. 2640, 2006 DJDAR 3721. Filed March 28, 2006 The Lawyers: For Dinuba: Andrea Saltzman, Meyers, Nave, Riback, Silver & Wilson, (510) 808-2000. For the county: Michael Wallenstein, Brown, Winfield & Canzoneri, (213) 687-2100.

In a major victory for opponents of big-box retail development, the Fifth District Court of Appeal has upheld a City of Turlock ordinance that prohibits a store of more than 100,000 square feet from selling groceries. Although dozens of jurisdictions have similar ordinances, and retail giant Wal-Mart has fought back fiercely, the court’s ruling is the first published decision in California on such a regulation. The decision could encourage other cities to approve similar ordinances. “I think it’s very useful to other cities,” Rick Jarvis, Turlock’s attorney in the case, said of the Fifth District decision. “There will be clear authority for other cities to adopt these ordinances without having to face legal challenges. The bottom line test is whether there is a rational basis for the regulation.” Jarvis said Turlock planning staff’s thoughtful drafting of the ordinance and detailed justification helped win the case. “They were very careful in the adoption of the findings, and they did an excellent job with the analysis of how the ordinance flows from the general plan,” Jarvis said. The city’s general plan policy since the 1990s has been to locate grocery stores in neighborhood-serving centers spread across town, explained Community Development Director Charlie Woods. Big-box stores, meanwhile, are limited to regional-serving commercial areas near Highway 99. Woods pointed out that more than 10 years ago the city denied a Target store proposed for a neighborhood-serving center. City officials feared that a big-box store with groceries would force the closure of neighborhood grocery stores, which would cause neighborhood centers to deteriorate and cause residents to drive farther to buy groceries in the regional retail center. Of course, the big-box retailer in question is Wal-Mart, which had proposed a 225,000-square-foot supercenter— a store that would have sold groceries. Wal-Mart argued that Turlock officials singled out the company, a contention the city denied and the court rejected. “ he simple fact that Wal-Mart was the first company to feel the effect of the ordinance is not sufficient to establish that Wal-Mart was targeted in any unconstitutional manner,” Justice Betty Dawson wrote for the unanimous three-judge appellate panel. The issue, said Woods, is the scale and format of stores, not Wal-Mart per se. In fact, Turlock already has a Wal-Mart store. “The council did what they did for the right reasons,” Woods said. “You have to articulate what your goals are.” Wal-Mart officials indicated the company would likely ask the state Supreme Court to review the decision. Three years ago, Wal-Mart began discussing development of a supercenter at Countryside Drive and West Tuolumne Road, near Highway 99. Representatives of labor unions (Wal-Mart employees are nonunion) and local grocery stores asked the city to block the project. In September 2003, the City Council directed the Planning Commission to prepare an ordinance that would limit the ability of big-box retailers to sell nontaxable items such as groceries. In January 2004, over the strenuous objections of Wal-Mart, the City Council adopted an ordinance that prohibits stores exceeding 100,000 square feet from devoting 5% of sales floor area to nontaxable merchandise (see , January 2004). Wal-Mart responded with a lawsuit alleging that the city violated the California Environmental Quality Act (CEQA) and other state laws, and that the ordinance was arbitrary and capricious. Stanislaus County Superior Court Judge Roger Beauchesne ruled for the city, finding that the ordinance was not a “project” under CEQA and also was entitled to other exemptions, and that the ordinance was a proper exercise of the city’s police power. Wal-Mart appealed, and the Fifth District upheld the lower court. The most-watched portion of the case concerned the city’s use of its police power. Wal-Mart argued that the city’s ordinance was designed to suppress economic activity, was not reasonably related to the public welfare, would have effects outside the city, and was not a reasonable accommodation of competing interests. The city countered that the ordinance was a valid attempt to prevent urban/suburban decay that would result from existing grocery stores closing, and to reduce traffic and air quality impacts associated with people having to drive farther to one large store. In siding with the city, the court cited extensively from a December 2003 staff report by then-Planning Manager Michael Cooke, and from the ordinance’s preamble. “ hile the ordinance likely will have an anticompetitive effect on the grocery businesses in city, that incidental effect does not render arbitrary an ordinance that was enacted for a valid purpose,” Dawson wrote. “While zoning ordinances may not legitimately be used to control economic competition, they may be used to address the urban/suburban decay that can be its effect.” “ ocal governments,” Dawson continued, “need the flexibility to react to specific proposals for a new kind of development not previously contemplated where such a development will or may have harmful consequences to the locality’s legitimate planning objectives. “In summary, the police power empowers cities to control and organize development within their boundaries as a means of serving the general welfare,” Dawson wrote. “ legitimately chose to organize the development within its boundaries using neighborhood shopping centers dispersed throughout the city. The ordinance is reasonably related to protecting that development choice.” In a footnote, the court distinguished its decision here from a decision issued one week earlier in a different case in which the court struck down a City of Hanford zoning ordinance regulating which stores may sell furniture (see , page 8). In the Hanford case, the regulation was “not rationally related” to the public purpose. In Turlock, “the ordinance is reasonably related to furthering a legitimate policy choice for organizing development,” Dawson wrote in the footnote. The Fifth District dealt at length with Wal-Mart’s CEQA arguments. The city had declared the ordinance exempt from CEQA because the ordinance was not a public project, it was consistent with a program environmental impact report for the general plan, it was consistent with the general plan, and it was eligible for a categorical exemption as a minor alternation of land use. The city relied on CEQA Guidelines § 15183, which streamlines review of projects that are consistent with general plans for which an EIR was certified. The court upheld the city’s approach. Wal-Mart’s primary contention was that its proposed store was environmentally superior to other likely development. Wal-Mart argued that if the city rejected its proposal, the company would build outside the city limits, forcing people to drive farther and creating more air pollution. Additionally, the originally chosen site would get developed with many smaller stores, including a grocery store, and these multiple stores would create more traffic than a single supercenter, Wal-Mart contended. The court, however, said the proper environmental analysis would be a comparison between the current conditions (known as the baseline) and foreseeable future conditions. Wal-Mart was comparing two sets of future conditions and made too many assumptions about the effect of Turlock’s ordinance, the court ruled. Wal-Mart has also sued Turlock in federal court, arguing that the city’s ordinance violates the equal protection and commerce clauses. That case was argued in U.S. District Court in Fresno on February 6, and a ruling is expected soon. The Case: , No. F047372, 06 C.D.O.S. 2827, 2006 DJDAR 4019. Filed April 5, 2006 The Lawyers; For Wal-Mart: Theodore Boutrous, Jr., Gibson, Dunn & Crutcher, (213) 229-7000. For the city: Rick Jarvis, Jarvis, Fay & Doporto, (510) 238-1400.

The City of Davis, a college town located only 15 miles west of Sacramento, is surrounded by farm fields, orchards and open space. Despite its proximity to the Central Valley’s second largest city, Davis has virtually none of the “rural sprawl” that surrounds so many other valley towns. One of the reasons for Davis’s sharp urban edges is a nearly 20-year-old redevelopment agreement between the city and Yolo County. The pact gives the city veto power over nearly all proposed development in unincorporated areas near the city. In exchange, the county gets a chunk of the property tax-increment revenue generated by Davis’s redevelopment agency. “For all intents and purposes, it’s a growth management tool,” said Mitch Sears, an open space planner for the city. Yolo County has pass-through agreements with redevelopment agencies in all four of the county’s incorporated cities — Davis, Woodland, West Sacramento and Winters. All of the agreements acknowledge that the county wants to see development occur in the cities, said David Morrison, assist director of Yolo County’s Planning, Resources and Public Works Department. However, only the Davis-Yolo contract gives the city land use control over unincorporated areas. The agreement, which bolsters a “smart growth” approach to development, could be a model for broader reform of the state-local fiscal system. The story behind the Davis-Yolo agreement is a classic tale of California growth politics. During the mid-1980s, developer Frank Ramos approached the city with a proposal for an 800-unit housing project just beyond the city’s eastern boundary, as well as a new interchange on Interstate 80. The Davis City Council, which considered itself advocates of very slow growth at the time, opposed Ramos’s project. So the developer began talking with county officials. Although Ramos never filed an application with the county, word spread that the county was interested in the project and would approve it if given the chance. After lining up support at the county level, Ramos returned to the city, where it became clear that the City Council would do almost anything to prevent such a project from going forward under the county’s authority. With this leverage in hand, the developer roughly doubled the size of his Mace Ranch project to 1,500 units and dropped the interchange. Finding itself backed into a corner, the City Council had little choice but to approve a project that was nearly twice as big as the rejected original plan — and a project with greater traffic impacts. At about the same time the Mace Ranch politics were playing out, the city formed a redevelopment agency. The city was determined not to repeat the Mace Ranch saga, while the county was concerned about losing revenue to a new redevelopment agency. So the sides met and in 1987 signed the pass-through agreement. The agreement, which was most recently renegotiated in 2001, essentially ensures the county does not lose out on the growth of property tax revenue in the city’s redevelopment project area. In exchange, the Davis City Council, which runs the redevelopment agency, has authority within the city’s sphere of influence to reject any development other than uses allowed by the county’s agricultural zoning. (The agreement does permit development in about half a dozen small areas that were subdivided prior to 1987.) The city’s sphere of influence extends out three to four miles beyond the city limits. The agricultural zoning permits one house per 20 acres and construction of various farm-related facilities — but no urban development. If a landowner or developer does want to build in the sphere of influence, the application comes to the city, Sears explained. The City Council has the ultimate say and it has vetoed projects, but most proposals are sorted out at the staff level, he said. Generally, the city insists that development sites get annexed into the city. However, the city has approved only about three small annexations since the pass-through agreement went into effect, Sears said. Thus, the city has been able to pursue redevelopment while simultaneously preventing sprawl. And it’s not as if there is no interest in development. “There is strong growth pressure in the Davis area,” Sears said. “Every other month I’m talking to another developer about making their way through our process to get annexed.” Typically, those talks do not even reach the application stage, though, because of Davis’s insistence on an urban edge. Jeff Loux, a former Davis planning director who now runs the University of California, Davis, Extension land use and natural resources program, said the pass-through agreement changed the local political equation. “It took out of play dozens and dozens of subdivisions that developers would have come forward with,” said Loux, who became planning director shortly after the agreement was finalized. “We considered it, from a planning point of view, as part of our basic planning policy of a dense urban area surrounded by farmland.” The county’s Morrison said the agreement preserves “very clear, distinct urban edges, unlike most of the rest of the state.” Morrison, however, sees the pass-through agreement as only one tool that reflects the “operating philosophy” of the county. “The county has been very clear: We are not interested in becoming Elk Grove or Folsom,” he said. If the county wanted to get into the development business, it could cancel the pass-through agreement and start approving projects that would bring in more revenue. That has not happened, but, Morrison warned, the local economy has changed dramatically during the last five years. Real estate speculation has become intense at the same time the farm economy has suffered. Two large tomato processing plants have closed. One plant reopened, but it is smaller and struggling, he said. The value of the county’s total farm production has been flat for a decade. The county, which is shifting into high gear on a general plan update, needs alternatives for dealing with market forces that threaten longstanding land use policies, Morrison said. The situation is further compounded by the fact that Yolo receives only nine cents of every property tax dollar. Only Orange County receives a smaller cut of property taxes. State legislation to give those two counties more property tax revenue has been vetoed several times. “If the state’s really interested in smart growth, they need to put their money where their mouth is,” Morrison said. Loux agrees and suggested that the Davis-Yolo County agreement could be a model for fiscal reform. Until the “haves” start paying the “have nots,” there is no incentive to halt development in inappropriate locations, he said. Contacts: Mitch Sears, City of Davis, (530) 757-5626. David Morrison, Yolo County, (530) 666-8041. Jeff Loux, UC Davis Extension, (530) 757-8577.

It's easy to overlook the San Diego River, especially as it reaches the final stretch of its 52-mile journey from the inland mountains to San Diego's Mission Bay. The river is not a focal point of Mission Valley, as it winds past the parking lots of hotels, shopping centers and Qualcomm Stadium. Much of its water has been diverted into aquifers farther upstream. Its water quality is considered impaired under federal pollution standards. Homeless encampments are found at the river's estuary near the bay. But as dammed, narrowed and channeled as the river is in places, it also provides a home to many endangered or threatened species, and a sanctuary from urban life. The state-financed San Diego River Conservancy, which recently adopted a five-year plan for preserving the river, hopes to turn the river into a showplace for the city and the region, while preserving a key part of the environment. The five-year plan calls for spending $164.5 million to acquire land, restore habitat, improve water quality and study the river's hydrology. Money to implement the plan, however, is short. "When you look at the environmental challenges (facing the river), they really are quite different depending on where you are," said Jack Minan, vice chair of the San Diego River Conservancy. In its first 15 miles, the river is more pristine, and its water quality is good. At its source in the Cleveland National Forest near Julian, the river and its tributaries include magnificent waterfalls, such as Mildred and Cedar Creek falls. In recent years, environmentalists have tried to get this upper stretch declared a wild and scenic river by Congress. The free flow of water ends at the El Capitan and San Vicente reservoirs, built during the 1930s and 1940s to prevent flooding in the City of Santee and San Diego's Mission Valley. A seven-mile stretch of the river after the El Capitan Reservoir is still used for agriculture, followed by the remaining urbanized stretch through San Diego, where water polluted from freeways and streets enters as runoff. Although most urban rivers are similarly polluted, the San Diego River is by no means an urban horror story. Scattered throughout the river's path are a number of parks. They include the 5,800-acre Mission Trails Regional Park, which runs from Santee to San Diego, and is one of the largest urban parks in the country. Some of the parks are kept in a natural state; others contain athletic fields and urban park amenities. River supporters want to create more parks and a 52-mile trail to make the river, they are fond of saying, "like a string of pearls." Supporters envision saving wildlife while opening up the river to more recreational activities by humans. Currently there are only 8.5 miles of trail along the river. "We intend to link a bunch of parks into a continuous chain," said Deborah Jayne, executive officer of the conservancy. San Diego County has one of the highest concentrations of threatened and endangered species in the nation, and the river is home to at least 25 protected plants and animals. Endangered or threatened species found along the river include birds, such as the least bell's vireo and California gnatcatcher, the arroyo southwestern toad and plants such as the San Diego thornmint. Fish in its waters are non-native species, such as carp and bass. "We should have steelhead trout," said Rob Hutsel, executive director of the nonprofit San Diego River Park Foundation, one of several organizations that works with the conservancy to renew the river. "Most of the land on the river is or will be included within the regional natural communities conservation plans and multi-species conservation programs" being set up in the county to preserve endangered and threatened species, said Michael Beck, San Diego director of the Endangered Habitats League (see , February 2003). Beck is also chair of the San Diego River Park Foundation and Lakeside's River Park Conservancy. Lakeside is an unincorporated community of 50,000 on the river. Its River Park Conservancy recently acquired 100 acres of land along the river. Counting donated land, the Lakeside conservancy has raised more than $20 million in only a few years, he said. It is a model of what the larger river conservancy hopes to achieve, he said. "It's typical conservation," he said. "It comes from hard work." The recently adopted five-year plan calls for purchasing 1,450 acres along the river at a cost of $73 million, and also spending more than $25 million to remove non-native species and restore wetlands. But sources of money are few at this point. The conservancy currently has $5 million in funds from Proposition 40 that were designated for the river. Future funding may have to come from state bond measures and possibly from programs that carry out local habitat conservation plans. "There are a lot of overlap activities," Beck explained. For example, he said, "a very significant part of the San Diego River in El Monte Valley will be included in the Helix Water District's NCCP." Many of the same agencies involved in local habitat plans also have been involved in planning river restoration. Jayne said the conservancy also hopes to receive future donations of land, such as 104 acres bequeathed to it recently near the river's headwaters. In addition, the river conservancy is applying for federal and state money, as well as private funding, she said. The conservancy intends to prepare a complete hydrologic study of the river to understand how the cumulative impact of land use decisions made by individual jurisdictions impact the waterway, Jayne said. In some parts of the river, heavy sand and gravel mining has changed the river, as gigantic holes have been gouged out. The river is one of the most heavily mined in the state, according to Jayne. Besides being an environmental resource for the region, the San Diego River is also considered an important part of San Diego's history. The state's first mission relied on it for water, and the city's presidio and first settlements were built nearby. Archeological finds indicate humans have lived on its banks for 8,000 to 10,000 years. The San Diego River Conservancy was created in 2002, and is one of the state's eight conservancies. The San Diego River Conservancy is scheduled to sunset in 2010. Jayne said she hopes the conservancy's track record before that deadline convinces the Legislature to keep the conservancy operating. Contacts: Rob Hutsel, executive director, San Diego River Park Foundation, (619) 297-7380. Jack Minan, vice chair of San Diego River Conservancy; professor, University of San Diego School of Law (619) 260-4607. Michael Beck, San Diego director, Endangered Habitats League, (619) 846-3003. Deborah Jayne, executive officer, San Diego River Conservancy, (858) 467-2972. San Diego River Conservancy: http://sdrc.ca.gov

A City of Hanford zoning ordinance that permitted furniture sales only in large department stores has been thrown out as unconstitutional by the Fifth District Court of Appeal. The ordinance, which was intended to keep furniture stores downtown, prohibited all but the largest stores in an outlying planned commercial (PC) zoning district from selling furniture. But the ordinance contained an exception allowing stores of at least 50,000 square feet to devote up to 2,500 square feet to furniture displays. The exception created two classes of retailers, and “the disparate treatment of these two retailers does not bear a rational relationship to the goal of preserving downtown Hanford,” the court ruled. The controversy started in 2002, when Adrian and Tracy Hernandez sought a certificate of occupancy for Country Hutch Home Furnishings and Mattress Gallery, a 4,000-square-foot mattress store that would also carry bedroom furniture and accessories. The store was to be located in the PC zone. A city official told the business owners they could not sell furniture at this location, and in early 2003 the city approved a certificate of occupancy for Country Hutch that identified the merchandize the store could sell. Furniture was not on the list. The Hernandezes opened the store and started selling furniture anyway. The city cited them for violating the zoning ordinance. The store owners responded with a request that they be allowed to sell the same type of furniture already available at Wal-Mart, Gottschalks and The Home Depot in the same zoning district. The city conducted a series of study sessions before the City Council in July 2003 adopted a new ordinance prohibiting the sale of furniture in the PC zone except by department stores of more than 50,000 square feet. The city reasoned that the ordinance would protect the vitality of downtown — where the city wants to see furniture stores — while still keeping the PC zone available for department stores. The Hernandezes sued, arguing that the ordinance violated the constitution’s equal protection clause. Kings County Superior Court Judge Peter Schultz found that there was a rational basis for treating the two classes of stores differently, and he upheld the ordinance. The store owners appealed, and a unanimous three-judge panel of the Fifth District overturned the lower court in a very straightforward decision. The appellate court found that the prohibition on furniture sales in the PC zone “appears to reasonably relate to a legitimate governmental purpose, i.e., keeping large furniture stores downtown in order to preserve the economic viability of that commercial district.” The problem, wrote Justice Herbert Levy, was the exception for large stores. “Country Hutch sells mattresses and home furnishings, both permitted in the PC zone. Country Hutch also wanted to include a limited furniture department. The department stores are in the same position. They want to devote a portion of their floor space to furniture. Under these circumstances, the difference in total floor space is largely irrelevant. Thus, these retailers are in similar situations. Accordingly, in order for the ordinance to comply with the equal protection principles, this classification based on size must bear a rational relationship to the legislative goal, i.e., the preservation of downtown Hanford. “Here, with the blanket 2,500-square-foot restriction on furniture in the PC zone, the small retailer poses the same potential threat, if any, to the downtown merchants as the larger store. Thus, limiting the furniture sales exception to stores with more than 50,000 square feet is arbitrary. A rational relationship between the size classification and the goal of protecting downtown simply does not exist.” The court also rejected the city’s argument that the ordinance was legitimate because it made the PC zone attractive to large retailers. Small retailers are not a detriment to the PC zone, the court ruled. The Case: , No. F047536, 06 C.D.O.S. 2643, 2006 DJDAR 3718. Filed March 28, 2006 The Lawyers: For Hernandez: Russell K. Ryan, Motschiedler, Michaelides & Wishon, (559) 439-4000. For the city: Michael J. Noland, Kahn, Soares & Conway, (559) 584-3337.

Urban sprawl has been blamed for everything from vanishing farmland and dwindling wildlife to Baby Boomer obesity. Central Valley air pollution regulators are blaming it now for much of the region’s persistently dismal air quality, and they have embraced a radical fix never before tried: using the threat of smog-mitigation fees to encourage “smart growth” development patterns and greener building design. No other regulatory agency in the nation has made such an explicit link between land-use patterns and polluting emissions from automobile traffic, and then tried to use developer fees as a hammer to reshape community growth. Unsurprisingly, the move by the San Joaquin Valley Air Pollution Control District has drawn loud and angry condemnation from the building industry and affordable-housing advocates, who argue the fees boost the cost of new homes and shut many would-be buyers out of one of the state’s hottest markets. Opponents also believe the program unfairly targets only new construction, when existing residents contribute most of the pollution. Clovis Mayor Nathan Masgig, spokesman for a group opposing the fee, issued a press release calling it “a whopping new tax on Central Valley taxpayers, businesses and our entire regional economy, all with no guarantees of better air quality.” Environmentalist and public-health experts have been equally energetic in their praise for the new rule, which took effect March 1. And it was defended as both a legal and a regulatory necessity by district staff, who pointed out that a recently adopted state law gives them no other option for cleaning some of the dirtiest air in the county. Bakersfield, Tulare, Visalia and Fresno now rank with Riverside, San Bernardino and Houston at the top of the national list for ozone pollution. “With the amount of expected growth in the valley, every emission reduction from this rule is important,” Seyed Sadredin, deputy director of the air district, said in announcing adoption of the regulation. “Although air quality has improved greatly over the years, we still have a serious problem, and innovative programs like this will help us clean the air.” The San Joaquin Valley Air Pollution Control District encompasses eight counties, from San Joaquin in the north to Kern in the south, and is governed by county supervisors and city council members from throughout the region. The district has been criticized for years for failing to address the valley’s persistently poor air quality (see CP&DR Environment Watch, April 2002). The district adopted the new rule after the Legislature in 2003 enacted SB 709 by Sen. Dean Florez (D-Shafter), which requires the San Joaquin district to adopt, by regulation, a schedule of fees to be assessed on area-wide or indirect sources of emissions. The regulation, dubbed the “Indirect Source Review” program, was approved in December. It applies a sliding fee scale to large new developments, which it defines as those that include any of the following: • 50 residential units; • 2,000 square feet of commercial space; • 25,000 square feet of light industrial space; • 100,000 square feet of heavy industrial space; • 20,000 square feet of medical office space; • 39,000 square feet of general office space; • 9,000 square feet of educational space; • 10,000 square feet of government space; • 20,000 square feet of recreational space; or • 9,000 square feet of space not identified above. The fee is based on a complicated series of equations intended to quantify the added pollution produced by construction equipment and vehicle traffic associated with each type of project, and the estimated cost of offsetting those emissions through off-site reductions at other emission sources. The pollutants of primary concern are small particulate matter, such as the fine soot in diesel exhaust, and nitrogen oxide, a common vehicle emission and a precursor of ozone. The valley is in violation of state and federal standards for those pollutants, despite significant reductions from stationary and mobile sources. The main reason for the violations, according to air district staff, is the staggering increase in valley auto traffic. Residents drive 94 million miles a year, and population is booming, but the district cannot directly regulate tailpipe emissions from private cars and trucks. The consequences of poor air quality are serious for children and other people with sensitive health. Research has confirmed a link between airborne particulates and illnesses such as asthma. Ozone can irritate and inflame the respiratory tract, particularly during heavy physical activity, which results in heavy coughing, throat irritation, and breathing difficulties. Fresno County has the highest childhood asthma rate in the state. Most of the controversy over the rule has arisen from the requirement that developers pay for pollution produced by vehicle traffic associated with their projects over a 10-year period. That traffic includes employees driving to and from work sites in office buildings, industrial plants and other developments, as well as people driving to and from their homes in large residential projects. The fees can be steep, and they rise over time. For nitrogen oxide emissions, the impact fee starts at $4,650 a ton this year, rises to $7,100 next year and hits $9,350 in 2008 and beyond. The particulate emission fee starts at $2,907 a ton, and then rises to $5,594 and $9,011. For a typical residential development of 120 single-family homes on 24 acres, the fee would translate to $780 per home this year, climbing to more than $1,700 in 2008. Builders can reduce the fee substantially, however, by incorporating green building technologies into their projects — increased energy efficiency, for example — clustering housing units near transit stops and shopping centers, boosting density and making development more pedestrian-friendly. Depending on how many of those strategies the developer employs, the fee could drop to $557 or $454 per home — not much of an added hit for the buyer of a $250,000 dwelling. The district estimates the fee will raise more than $100 million in the first three years, which the district plans to spend on clean-running buses and street sweepers, and other pollution-reduction measures. Critics of the rule are skeptical that it will enable the district to clean the valley’s air enough to meet state and federal standards. But the region’s regulators are fast running out of sacred cows to exempt from air-pollution controls. In the bovine sense, that’s literally the case: By summer, the valley air district is expected to impose smog restrictions on cows and pigs, too. Contacts: San Joaquin Valley Air Pollution Control District, (559) 230-5800. Indirect Source Review Program: http://www.valleyair.org/ISR/ISR.htm Clovis Mayor Nathan Masgig, (559) 324-2101.

A scandal involving development of a hub for cargo carrier DHL has raised questions about reuse of the March Air Force Base in western Riverside County. Whether the scandal will cost March the DHL operation is unknown, but some people in charge of March redevelopment are questioning the governing system established for base reuse. In February, an investigated attorney hired by the March Joint Powers Authority (JPA) reported that the developer of the DHL hub, March GlobalPort, had provided the JPA and the public with an incorrect flight path for the cargo airplanes. The flight path map presented by March GlobalPort showed the planes taking off over Interstate 215 and Highways 60 and 91. The real flight path, however, takes the planes right over two Riverside neighborhoods. Residents of those neighborhoods had sued to halt the DHL project, but they lost in Superior Court and did not appeal. The flight path revelation came only days after a consultant hired by the JPA reported that March GlobalPort had overestimated landing fee revenue from the DHL operation. The consultant said fees would amount to only $9.5 million over 20 years — not the $26 million the developer had predicted. Opponents of the DHL project, including Riverside County Supervisor and JPA Commission Member Bob Buster, have seized on the new information to question both the JPA’s structure and cargo hub, which began operating last fall. Others are at least questioning the JPA, which is overseen by a commission composed of two elected officials each from the county, the City of Riverside, Moreno Valley and Perris. “There is absolutely no communication,” said Ed Adkison, a Riverside councilman who sits on the JPA commission. “When things go awry, I find out about it by reading the newspaper. How can you have oversight if you don’t know yourself what is going on?” Adkison pointed to a recent citation the JPA received from fire authorities for storing aviation fuel improperly — an embarrassment Adkison learned about in the newspaper. The JPA commission recently hired Tom Evans, a former Riverside interim city manager and former chief of the city’s municipal electric and water utility, to audit JPA operations and make recommendations. Most base reuse efforts have a joint powers authority in charge of redevelopment, and the JPAs frequently sign agreements with master developers. This is true at March. However, unlike other base reuse efforts, in the case of March, the JPA — not the local city or county —has land use police powers. Adkison said the JPA was never intended to be a permanent entity, and now that uses of most of the 4,400-acre base have been planned and approved, it may be time for a change. “At some point in time, the JPA needs to go away,” Adkison said. “The JPA was never supposed to be a municipality. Now, as you’ve got these buildings going up, they need municipal services and infrastructure.” Not all JPA members agree. Richard Stewart, a Moreno Valley councilman and current JPA chairman, has repeatedly said there is no need to break up the JPA now. In recent weeks, Stewart has clashed with county and Riverside representatives regarding the JPA’s future. Last month, the City of Riverside released a map that proposed spheres of influence over the base and adjacent lands. The map gave 4,332 acres to Riverside, 543 acres to Moreno Valley and 44 acres to Perris. The map outraged Moreno Valley and Perris officials. “We are all equal partners in this authority,” Moreno Valley Mayor Bonnie Flickinger told the Riverside Press Enterprise. “What bothers me is that this was unilateral. Perris and Moreno Valley and Riverside County are not suburbs of Riverside, and Riverside is not the center of the universe.” At the heart of the acrimony, though, is the investigative report prepared for the JPA commission by Los Angeles attorney Leonard Gumport. The JPA asked for the investigation after the Press Enterprise reported last September, shortly before DHL flights commenced, that the flight path map presented by Greg Diodati, then the managing partner of the cargo hub developer, was inaccurate. The incorrect map was displayed at two public hearings in September 2004. During the second hearing, the JPA commission voted 7-1 to approve the cargo hub. Nine days after that vote — but before a routine, “second reading” of rezoning for the cargo hub — Diodati submitted a letter to the JPA providing new flight path information. “Diodati’s October 1, 2004, letter was intentionally cryptic and misleading to the public, including the March JPA commissioners,” Gumport reported. “In the letter, Diodati obscured from the public and the commissioners the discrepancies between the flight path depicted in the inaccurate chart and the different flight path used in noise contour maps prepared by March GlobalPort’s noise consultants.” Apparently a draft of the noise consultants’ “single-event noise exposure level study” based on the correct flight path was presented to JPA staff members only hours before the commission voted to approve the project. A final version of the noise study was made public before the October 6, 2004, second reading. Diodati has publicly stated he did nothing wrong and did not intend to deceive anyone. However, he has been removed as the developer’s managing partner. Two months after the JPA approved the cargo hub, DHL selected March over the former Norton Air Force Base in San Bernardino and Ontario International Airport for a new cargo hub that could ultimately employ 250 people. Officials in San Bernardino and Ontario concede they are at least closely monitoring the situation, although DHL has not indicated it intends to relocate. Andy McCue, managing director of the Blakeley Center for Sustainable Suburban Development at UC Riverside, said the recent revelations could hinder continued redevelopment at March, which had been seen as a model for others to replicate. If the individual jurisdictions start “Balkanizing,” redevelopment could truly suffer, he said. “A lot of the momentum they had has been dissipated,” McCue said. “It’s not just the DHL project. All of these other things are starting to come out of the woodwork now. But the fact remains that for all of the cities around here and the county, March remains a very attractive economic development opportunity.” Indeed, a development agreement between the JPA and Lennar for a 1,290-acre business park remains in place. Development for a portion of that project has already begun. Contacts: Ed Adkison, City of Riverside, (951) 826-5991. Andy McCue, Blakeley Center for Sustainable Suburban Development, (951) 827-4103. March Joint Powers Authority: www.marchjpa.com

With the debate over infrastructure crashing to a halt, state lawmakers have turned their attention to housing legislation. In recent weeks, lawmakers have introduced and debated numerous housing bills, several of which chip away at local governments’ regulatory authority. Perhaps the most divisive bill is SB 1177 (Hollingsworth), the latest change to the density bonus law. The bill would prohibit local governments from requiring that developers show a requested waiver of development standards or zoning is economically necessary. Proponents of the bill argue that some cities are requiring developers to submit profit and loss statements and tax returns to prove that a waiver of development standards is economically necessary for a housing project. Local government representatives say that a waiver of community standards should require a showing of economic necessity. The Senate Transportation and Housing Committee approved SB 1177 after a sometimes heated hearing during late March. The hearing, in part, demonstrated confusion over the density bonus law, which lawmakers amended with SB 1818 in 2004, and with SB 435 in 2005 to make the statute more favorable to builders. Under the existing law, developers may build 25% more housing units than a property is zoned for if 10% of the units are affordable to low- or moderate-income residents. Developers also are eligible for one “regulatory incentive,” such as a reduction in site development standards, a modification of zoning requirements, or approval of mixed-use zoning. Developers who build a slightly greater percentage of affordable units are eligible for a density bonus of up to 35% and up to three waivers of local regulations. The existing law also lets developers request additional waivers of regulations. To get the additional waivers, though, developers must show that the waivers are necessary to make the housing units economically feasible. SB 1177 would change the economic necessity standard to one of physical necessity. Sen. Dennis Hollingsworth (R-Murrieta) said during the committee hearing that cities are abusing the economic necessity standard. He said there is “a growing recognition that the density bonus law is not being used as intended.” The California Building Industry Association, the California Association of Realtors (CAR), the California Federation of Labor and affordable housing developers are among more than 100 supporters of the bill. Ron Kingston, a CAR lobbyist, said it was impossible to quantify how an exception to architectural standards or setback requirements would make a project economically feasible. Marc Brown, of the Western Center on Law and Poverty, contended that cities use the economic necessity requirement to harass developers. Planning and local government representatives strongly oppose the bill. “Four years ago, this law worked pretty well,” said Daniel Carrigg, a lobbyist for the League of California Cities, which opposed the 2004 and 2005 amendments. “It’s become a disaster, a mess. This bill simply makes it worse.” Under the current law, if requested waivers are not granted, a developer may sue a local government, said Sande George, lobbyist for the California Chapter of the American Planning Association. Cities and counties end up granting waivers simply to avoid litigation, she contended. Several senators expressed skepticism at local government’s opposition. Sen. Denise Ducheny (D-San Diego) said economic feasibility of a development project is not a city’s concern. Besides, she said, a city could still decline to approve a requested waiver if it makes required findings. The committee approved SB 1177 on a bipartisan 10-2 vote, and the bill’s chances for approval appear good. Although authored by a conservative Republican, SB 1177 has a liberal Democrat, Assemblyman Dave Jones (D-Sacramento), as an Assembly sponsor. Local governments are supporting a competing bill, AB 2484 (Hancock), that would prohibit density bonuses for parcels already zoned for high-density development. Other housing bills under consideration: • AB 1387 (Jones) streamlines environmental review of infill housing projects near transit stops. • AB 2158 (Evans) requires councils of government, when establishing fair-share housing requirements, to consider cities’ and counties’ adopted spheres of influence and local agency formation commission policies. • AB 2331 (Villines) exempts projects funded by local governments, including redevelopment agencies, from prevailing wage labor requirements. • AB 2468 (Salinas) allows local governments to self-certify their housing elements in certain situations. • AB 2511 (Jones) places numerous restrictions on local governments’ ability to regulate and approve housing development. Among other things, the bill would remove cities’ and counties’ ability to attach conditions or require a variance for second units, and limits local governments’ ability to place conditions on certain housing proposals. • AB 2526 (Arambula) requires cities and counties to defer local fees until the issuance of a certificate of occupancy if at least 49% of a project is affordable. • AB 2562 (Saldaña) and SB 1676 (Ducheny) increase notification requirements to residents of rental properties being converted to condominiums. • AB 2922 (Jones) would increase redevelopment agencies’ housing set-aside from 20% to 50%. • AB 3042 (Evans) provides a new way for cities and counties to transfer shares of regional housing needs. • SB 1754 (Lowenthal) establishes a pilot project for formation of housing and infrastructure financing districts. • SB 1798 (Perata) expands a California Environmental Quality Act exemption for infill residential developments to projects of up to 10 acres and 200 units. • SB 1800 (Ducheny) requires cities and counties to designate a 20-year land supply for housing.

A state appeals court has provided water quality regulators with two significant victories, at least one of which could affect land use and development. The Fourth District Court of Appeal upheld the Santa Ana Regional Water Quality Control Board’s stormwater regulation for 18 local governments in San Bernardino County. A different panel of the same court upheld nearly all of a much-discussed “trash TMDL” that charges local governments with keeping all trash out of the Los Angeles River. Cities have fought the regulations since they were initially proposed, arguing that compliance would be overly expensive. The cities have asked the state Supreme Court to review the decision on the Los Angeles River regulation. The San Bernardino County stormwater ruling could have the largest impact for those in the land use planning and development fields. Regional water boards in most of the state’s urban areas have cracked down on storm drain discharges during recent years (see , October 2002, August 2001, March 2000, February 1998). The increased regulation intends to slow and filter runoff, which has forced a change in some planning and development practices. Some cities and counties — especially those located upstream — and development interests have fought the rules. The case at hand concerned a 2002 municipal stormwater permit that the Santa Ana regional board issued for 18 local government entities in San Bernardino County. Several of those entities appealed the permit’s conditions to the State Water Resources Control Board, which summarily dismissed the appeal. The cities of Rancho Cucamonga and Upland then sued the state and regional boards on procedural and substantive grounds. San Bernardino County Superior Court Judge Shahla Sabet ruled against the cities. Rancho Cucamonga alone appealed, and the Fourth District, Division Two, upheld the lower court. The Fourth District had little patience with Rancho Cucamonga’s arguments. First, the court ruled that Judge Sabet correctly dismissed the state board from the case because the state board had declined to become involved in the permit. Then the court turned to the regional board’s actions. The city raised what the court described as “an omnibus objection to the entire administrative record,” especially the inclusion of three studies regarding marine pollution and an economic study. The court ruled, though, that the city had waived its objection because it did not raise concerns about the record during the administrative process. The court then considered five substantive complaints: that the regional board failed to consider the economic impact of the permit conditions; that there was not substantial evidence supporting the board’s decision; that the lack of a “safe harbor” provision in the permit violated the Clean Water Act; that the permit conditions exceeded the “maximum extent practicable” standard for controlling pollution; and that the permit was overly prescriptive. The court discussed each argument only briefly before rejecting each one. The court determined the 2002 permit “was based on a fiscal analysis and a cost/benefit analysis.” As for the alleged lack of sufficient evidence, the court said it was unwilling “to review the many thousands of pages submitted on appeal.” Justice Barton Gaut wrote for the court: “Rancho Cucamonga had the burden of showing the board abused its discretion or its findings were not supported by the facts. To the extent it attempted to do so at the trial court level, it was not successful. … e deem the trial court’s findings sufficient.” The court called the safe harbor argument “much ado about nothing.” Under the safe harbor principle, an agency is considered in compliance with the Clean Water Act if the agency complies with its permit. The court said that the safe harbor protection exists in statute and does not need to be repeated in the permit. Regarding the actual permit conditions, the court found them in compliance with the Clean Water Act and cited its ruling in , (2004) 124 Cal.App.4th 866 (see , January 2005). In that case the court ruled that the act allowed the San Diego regional board to adopt stormwater regulations that surpassed the “maximum extent practicable” standard. “ ike the permit in ,” Gaut wrote, “the 2002 permit contemplates controlling discharge of pollutants to the maximum extent practicable through a ‘cooperative iterative process where the Regional Water Quality Control Board and municipality work together to identify violations of water quality standards.’ The 2002 permit does not exceed the maximum extent practicable standard.” The court also rejected the argument the permit conditions were overly prescriptive. “The development and implementation of programs to control the discharge of pollutants is left largely to the permittees,” the court determined. The Los Angeles River case concerned the infamous “trash TMDL.” Under the Clean Water Act, agencies are supposed to set total maximum daily loads (TMDLs) for impaired water bodies (known as the 303(d) list), such as the Los Angeles River. “‘A TMDL defines the specified amount of a pollutant which can be discharged or loaded into the waters at issue from all combined sources,’” the Fourth District explained, using a definition from , (9th Cir. 1995) 57 F.3d 1517, 1520. Once a TMDL is established, all National Pollution Discharge Elimination System (NPDES) permits must be consistent with the waste loading allowed by the TMDL. In 2001, the Los Angeles Regional Water Quality Control Board established a TMDL for trash in the Los Angeles River. Trash is defined as waste that has not been properly discarded. The regional board set the trash TMDL at zero, to be phased in over 14 years. The NPDES permit regulating stormwater discharges from Los Angeles County and 84 other local entities would have to comply with the zero-trash mandate. The State Water Quality Control Board and Office of Administrative Law approved the trash TMDL in 2002, as did the federal Environmental Protection Agency. A coalition of 22 cities sued the EPA in federal court, but lost a Ninth Circuit ruling last year in , 411 F3d 1103 (see , August 2005). In state court, the cities sued the state and Los Angeles water boards. After the case was moved to San Diego County, the Superior Court found a number of problems with the TMDL and ordered the water boards not to implement it. Both sides appealed, and the Fourth District overturned portions of the Superior Court decision favoring the cities — but not the entire decision. The Superior Court ruled that the TMDL was faulty because the water boards did not conduct an “assimilative capacity study,” did not consider economic factors, applied the TMDL to the Los Angeles Estuary even though it was not on the 303(d) list, and failed to prepare an environmental impact report or its functional equivalent. The Fourth District rejected the first three grounds for dismissing the TMDL but accepted the environmental review argument. Under an assimilative capacity study, the water board could essentially decide that some amount of trash would not harm beneficial uses of the river. The water boards, though, had decided that because the river merely transports trash without diluting the pollutant, no level of trash was acceptable. The Fourth District found that federal law mandates no such study, and noted that the TMDL requires the regional water board to reconsider the target of zero after a 50% reduction has been achieved. As for economic considerations, the court noted that the TMDL addressed the cost of several types of systems to capture and remove trash from storm drains, including a system that would cost $1.8 billion for installation and 10 years of operation and maintenance. That was good enough for the appellate panel. Regarding the estuary, described as part of Queensway Bay in Long Beach, the court found the “TMDL’s identification of the estuary as impaired could have been clearer, but we conclude it was sufficient to put all affected parties on notice.” The issue of environmental review is where the water boards stumbled. The environmental documentation consisted of a checklist that, according to the court, the regional board “obviously intended” to be the functional equivalent of a negative declaration under the California Environmental Quality Act. On appeal, the water boards argued that the checklist met the requirements of a first tier EIR. The court did not buy it. “ e conclude the check list and trash TMDL are insufficient as either the functional equivalent of a negative declaration or a tiered EIR. Moreover, an EIR is required since the trash TMDL itself presents substantial evidence of a fair argument that significant environmental impacts may occur,” Presiding Justice Judith McConnell wrote for the court. “Neither the checklist nor the trash TMDL includes an analysis of the reasonably foreseeable impacts of construction and maintenance of pollution control devices or mitigation measures.” The cities appealed portions of the Superior Court ruling in favor of the water boards, but the Fourth District upheld the lower court. The Fourth District decision appears to let the TMDL take effect once the water boards perform an adequate environmental review. In March, the cities asked the state Supreme Court to review the case. First Case: , No. E037079, 06 C.D.O.S. 845, 2006 DJDAR 1126. Filed January 26, 2006. Modified February 27, 2006, at 2006 DJDAR 2300. The Lawyers: For the city: James Markman, Richards, Watson & Gershon, (714) 990-0901. For the water board: Jennifer Novak, attorney general’s office, (213) 897-4953. Second Case: , No. D043877, 06 C.D.O.S. 797, 2006 DJDAR 1145. Filed January 26, 2006. The Lawyers: For the cities: Richard Montevideo, Rutan & Tucker, (714) 641-5100. For the water board: Gregory Newmark, attorney general’s office (213) 897-2000.

A decade-long effort to adopt a plan for protecting endangered species in the Coachella Valley is threatening to unravel, at least partially. Some cities that would be covered by the multiple species habitat conservation plan (MSHCP) appear hesitant to approve the plan because it could block large-scale development projects. While some cities are reluctant, however, three of the biggest local players — Riverside County and two water districts — say they are committed to the plan and will move forward with or without the cities. Whether a plan signed by some, but not all, local entities would satisfy regulatory agencies and environmentalists is uncertain. Plan backers, including development industry leaders, say it would be foolish for the cities to reject the plan because, without it, any hopes of streamlining Endangered Species Act reviews would be lost. "A multiple species plan will give a certainty to our builders," said Ed Kibbey, executive director of the Desert Chapter of the Building Industry Association of Southern California. "If the plan is passed, it means there is a line in the sand. You can build on this side of the line, and you probably can't on that side of the line." Which is precisely the problem for some cities and developers. Proposed growth areas in the cities of Indio and Desert Hot Springs fall on the conservation side of the plan's line in the sand. In February, the Indio City Council voted not to support the MSHCP unless the plan opens up 2,500 acres for development in the Indio Hills, north of town. Indio Mayor Gene Gilbert said at the time that adopting the plan would be "developmental suicide." In Desert Hot Springs, the plan would apparently preclude the proposed 1,700-acre Palmwood development because the site, on either side of Highway 62, lies in a conservation area. According to preliminary environmental review documents, Palmwood would have 2,200 dwelling units, 45 holes of golf, a golf school and a 200-room resort. Some Desert Hot Springs leaders see Palmwood, backed by Landmark Properties U.S. and pro golfer Phil Mickelson, as a potential savior for their city, which has struggled financially. The MSHCP also could halt a proposed "new town" between the City of Coachella and the Salton Sea. Developer Tim Blixseth has proposed 10,000 housing units in the new town of Paradise Valley. That project, however, is proposed for unincorporated Riverside County, and the county is one of the plan's biggest backers. Pressure to adopt the plan is increasing. In early February, the board of the Coachella Valley Association of Governments (CVAG), which has overseen plan preparation, voted 10-1 to endorse the plan. Indio's representative was the lone dissenter. The CVAG vote came only after urgent words from county Supervisors Roy Wilson and Marion Ashley. Wilson suggested that he would oppose future annexation requests of any cities that vote against the plan. (Wilson's threat prompted Sen. Jim Battin (R-La Quinta), a longtime political foe, to introduce state legislation that would outlaw attempts to menace public officials into voting certain ways.) Besides the political pressure, there is legal pressure. Development activities related to the fringe-toed lizard, an endangered species, have been occurring under a memorandum of understanding (MOU) between CVAG and the state Department of Fish & Game. That MOU has been extended several times and is due to expire June 30, according to Jim Sullivan, CVAG's director of environmental resources. The state has made clear it will not grant another extension. Without either the MOU or the conservation plan, there would be no approval under the California Endangered Species Act for activities that harm the lizard or its habitat. There is an existing HCP for the lizard, but that provides only federal clearance, Sullivan said. The voluminous MSHCP was developed under the assumption that all 18 "permittees" — nine cities, the county and eight other government entities, including Caltrans — would adopt the plan. It's not clear what would happen if one of more of the permittees refuses to approve the plan. "It's really an all-or-nothing proposition," Ashley told The Desert Sun newspaper. Officials with CVAG have been negotiating with representatives of reluctant cities in hopes of winning plan approval. However, major changes in the plan would require recirculation of the environmental impact report, Sullivan noted. Changes also could threaten federal and state backing. The plan is an attempt both to accommodate development and to preserve rare plants and animals in one of the state's fastest growing regions. The Coachella Valley experienced annual growth of 4.1% during the 1970s, 5.8% during the 1980s and 3.4% during the 1990s. The state Department of Finance predicts a population increase of 145,000 — growth of a bit less than 3% annually — from 2000 to 2020. Growth, however, has come with environmental consequences. The plan covers 1.1 million acres in the middle of Riverside County. It designates 747,000 acres in 21 areas for conservation. The plan protects 27 species of plants and animals, 11 of which are already listed as endangered or threatened. The majority of the conservation land is already in public hands, including a huge chunk within Joshua Tree National Park. Still, another 140,000 acres would need to be conserved through public acquisition, dedication, deed restriction or conservation easement within 30 years. The permittees are responsible for lining up 90,000 of those acres. The plan covers 75 years and would cost an estimated $1.8 billion to carry out. Helping fund the plan would be development fees of about $1,200 per house, or $5,200 per acre for commercial projects. Proposed development outside of conservation areas would not have to undergo review of potential impacts to the 27 species. The plan would serve as both an HCP for federal purposes and as a Natural Communities Conservation Plan under state law. A new joint powers authority, called the Coachella Valley Conservation Commission, formed by the cities, the county and the Coachella Valley Water District would implement the plan. The plan is unusual in that it draws "hard lines." Most conservation plans — including the MSHCP for western Riverside County — have fuzzy lines demarking potential conservations areas. Within those areas, conservation is encouraged and development requires special review. The Coachella Valley plan clears development outside of conservation areas from species studies and regulation. Up to 10% of land within conservation areas could be developed, but plan authors envision single houses on large lots, not new subdivisions or commercial development. Also, unlike some other conservation plans, the Coachella Valley MSCHP underwent independent scientific review. The environment dictated where the lines should be drawn, explained Bill Havert, executive director of the Coachella Valley Mountains Conservancy. The conservancy has served as the consultant that wrote the plan. "Once you start looking at the biology carefully, you find that these species are fairly concentrated," Havert said. The choice, then, is to protect those areas "or lose the species." Some owners of property in conservation areas have expressed concerns or outright opposition. The plan calls for the conservation commission to acquire property only from willing sellers and at fair market value. How to set that value is a worry to some people. In an opinion piece for The Desert Sun , Bruce Colbert, executive director of the Property Owners Association of Riverside County, wrote: "There are no state or federal funds allocated for the plan. It could take 75 years, if ever, for sufficient funds to become available — certainly longer than the lifetime of many property owners. Their land would be taken without just compensation." Havert, however, noted that government agencies in the area have acquired 60,000 acres for conservation since work on the plan began during the mid-1990s. "There is a significant track record here of doing appraisals of land that is considered sensitive habitat and buying land from willing sellers," Havert said. Local BIA head Kibbey said he understands that individual property owners have concerns. But, for the good of the industry, the plan deserves approval, he said. The plan provides certainty, which is the most important thing to developers, he said. As it now stands, endangered species reviews take an average of eight years to complete, he said. Certainty is also important to the Coachella Valley Water District, said Monica Swartz, a district biologist. "It makes our operations in the future cheaper and easier to accomplish. We don't have to worry piece by piece about how we're going to preserve these things," she said. Swartz said there is a great deal of momentum behind the plan, despite some cities' reluctance. "We're planning on going ahead with this no matter what," she said. Representatives of Imperial Irrigation District and Riverside County have expressed similar sentiments. Contacts: Jim Sullivan, Coachella Valley Association of Governments, (760) 346-1127. Bill Havert, Coachella Valley Mountains Conservancy, (909) 790-3405. Ed Kibbey, Building Industry Association of Southern California, Desert Chapter, (760) 360-2476. Monica Swartz, Coachella Valley Water District, (760) 398-2661. Plan website: www.cvmshcp.org

A lawsuit over an annual fire assessment on property owners in the Oakland hills has been revived by an appellate court. Overturning a Superior Court decision, the First District Court of Appeal ruled that the lawsuit should go forward because the City of Oakland did not provide for an adequate administrative appeal of the tax. Two years ago, the Oakland City Council approved the creation of the Oakland Wildfire Prevention Assessment District to fund fire suppression, prevention and preparedness in the city’s eastern hills. The city then established a fee of $65 per house, enough to raise $1.7 million annually. The city created the assessment district in response to the 1991 fire that killed 25 people and destroyed 3,300 houses in the Oakland hills. The city received protests over the assessment but determined that because the protesters did not constitute a majority, the assessments could go forward. A group of homeowners called Unfair Fire Tax Committee sued, arguing that formation of the district violated Proposition 218 (the 1996 Right to Vote on Taxes Act) and environmental laws. Alameda County Superior Court Judge Steven Brick ruled that the homeowners committee did not exhaust its administrative remedies, and he threw out the lawsuit. In general, an aggrieved party must pursue every potential administrative avenue before turning to the courts. In its appeal to the First District, the committee submitted a number of arguments for why the exhaustion of administrative remedies rule should not apply here. Among other things, the committee pointed out that the city’s process allows only for a request of reconsideration by the City Council — the same body that approved the assessment district — rather than an appeal to a separate body. The unanimous three-judge appellate court panel found the city’s process “nebulous” and said the lawsuit should receive a hearing. The system, the court ruled, “fails entirely to provide any procedure for ‘submission, evaluation and resolution’ of such a request for reconsideration; it does not state how the appeal (or request for reconsideration) may be taken, whether the appellant will be entitled to a hearing, when the matter will be heard, what evidence may be submitted, or the standard for reconsidering the city council’s earlier decision.” The court sent the case back to the Superior Court for further proceedings. The Case: , No. A109510, 06 C.D.O.S. 1623. Filed February 27, 2006. The Lawyers: For Unfair Fire Tax Committee: Paul Kleven, (510) 528-7347. For the city: Mark Morodomi, city attorney’s office, (510) 238-3601.

Everybody in California is talking about form-based codes these days. Cities throughout the state are in the process of adopting these codes. The wave is growing so fast that form-based codes appear to represent a revolution in the making. But nobody seems to know what form-based codes are. That, at least, is the impression we get here at . Over the past year, no single question has come up more frequently than: The answer lies in the century-long battle for power in land-use planning between designers and lawyers. Since the dawn of modern planning during the 1890s, designers have focused on the shape and form of urban growth, especially in the public realm – the design of streetscapes and public squares, the creation of great places as a backdrop for a city. Lawyers have focused on the do’s-and-don’ts of regulating private development at the parcel level, which emerged largely out of nuisance law. The basic idea was to identify which “uses” are incompatible and separate them. (This battle is described in detail in Chapter 3 of my book co-written with Editor Paul Shigley, .) The traditional zoning code, with its long list of use districts and uses that are permitted or banned, represents a victory of lawyers over designers. The “form-based code” is an attempt by design-oriented planners to swing the balance back the other way. The basic idea of a form-based code is pretty simple: It places more emphasis on the design and form of buildings than a traditional zoning code does, and less emphasis on uses inside the buildings. This kind of approach makes sense today in a lot of places in California, where the main task of planning involves managing the transition from suburban to city-style development. The New Urbanist architect Victor Dover has summarized it simply by saying that a form-based code is a “design-oriented code.” This conveys the general idea – maybe better than “form-based code” — but it’s not quite specific enough, which is why the New Urbanists prefer the dense term “form-based.” It’s not really about the typical details of architectural design, such as façade treatments, color schemes, and architectural styles. It’s about the guts of urban design – the form and massing of buildings, the width and design of streets, and the physical relationship between the buildings and the streetscape. A form-based code usually has a lot of illustrations so that developers and architects can see what the code-writers had in mind rather than imagine it for themselves after reading the text. This is not to say that a form-based code completely abandons traditional zoning concerns, such as use districts, units per acre, and parking ratios. Many form-based codes do contain such standards. But these standards are often more permissive – allowing greater flexibility – while the code focuses in great detail on urban design standards. New Urbanists often argue that the use-based code makes the creation of great places “illegal,” and a form-based code simply represents a return to the type of planning that characterized great cities for thousands of years before the invention of the car and modern zoning. It might be fairer to say, however, that the form-based code simply represents an attempt to accommodate a more urban situation in California. New Urbanist rhetoric aside, a traditional zoning code does force the creation of a suburban environment, with its setback, parking, and landscape standards. And it’s usually silent on the question of what buildings are actually shaped like. But as California becomes more urban, and infill development continues to increase in importance, the commonly held idea that compatibility problems can be solved by more space between buildings becomes less realistic. In that sense, a more design-oriented approach such as the one used by form-based codes is probably appropriate – because that is how compatibility problems will be solved. Perhaps the best way to explain a form-based code is simply to describe one that is already in place. One of the first form-based codes adopted in California was the “smart code” adopted by the City of Petaluma for the Central Petaluma specific plan in 2003. This code was adapted from the copyrighted “SmartCode” created by Duany Plater-Zyberk of Miami. The Petaluma code is not particularly short. In fact, it is 54 pages long. Nor does it look much different from a typical code, at least at first. It has a zoning map and a chart showing a list of uses in each zone. It also has parking standards. But these characteristics do not function quite like they do in a standard code. And the Petaluma code has other things in it that a typical code does not. The Petaluma zoning map has different districts, but those districts are not typical of a zoning map. Some are tied to the New Urbanist idea of a “transect.” The transect divides the developed world into six zones – T-1 through T-6 – that range from extremely rural to extremely urban. The idea is that compatibility is not simply a matter of use; rather, neighborhoods should have compatible urban, suburban or rural fabric. There is one chart in the Petaluma code that calibrates the traditional land uses (i.e. general retail, 10,000 square feet or less) to the zones on the zoning map and specifies which ones need conditional use permits and which ones do not. There is another chart that specifies densities, parking ratios, setbacks, and height limits – though all of these standards are most definitely not suburban in scale. Setbacks have both minimums and maximums, for example, and all residential development requires only one parking space per unit. The Petaluma code differs from traditional codes in several other ways. For one thing, it devotes many pages to creating street standards. It also incorporates an alternative parking mechanism, specifying how developers may avoid on-site parking requirements either through participation in a parking district or by securing off-site parking. This alternative approach to parking is an increasingly common characteristic of form-based codes. In the form-based code world, parking, like so many other things, is a problem to be solved at the level of the district or neighborhood, not on each individual parcel. Unlike many form-based codes, the Petaluma code does not contain pages and pages of illustrated building types – a kind of “pattern book” for urban development. This is good and bad. On the one hand, form-based codes are supposed to focus on form and massing of buildings, so pictures help clarify the goal. On the other hand, a picture-laden form-based code can – implicitly or explicitly – impose a particular architectural style. (This appears to be O.K. with most New Urbanists, who like traditional architecture and despise modernism; but it is clearly not O.K. with modernist architects, whose buildings can sometimes fit into a New Urbanist context.) Most important, what’s missing from the Petaluma form-based code are the dozens of use districts, each with a laundry list of what uses are permitted and what uses are prohibited. A few outright prohibitions are contained in the Petaluma code, such as adult businesses in live-work spaces. By and large, however, most uses are permitted in most districts, though many are subject to a conditional use permit. Obviously, some use parameters must be wrapped around a form-based code. Most industrial uses would likely be banned from mixed-use areas where retail, office, and residential uses are permitted with great flexibility. And it is pretty clear that form-based codes will not work unless they are accompanied by neighborhood- or district-level plans for parking and other common needs. But in California’s increasingly urban context, focusing on the form of development — as opposed to the use — makes a lot of sense.