Don't start dreaming about that downtown loft just yet.  Though curbing low-density housing may be one key to implementing SB 375 and reducing greenhouse gas emissions, a new Public Policy Institute of California study suggests that the true key to reducing the state's vehicle miles traveled lies in employment density, not residential density. The study,  Driving Change:  Reducing Vehicle Miles Traveled  in California , argues that while the state has taken solid first steps to implement SB 375, the state must reverse some counterproductive trends and consider some innovative, and potentially controversial amendments to SB 375 if it is to fulfill its promise.  Authored by PPIC researcher fellows Ellen Hanak, Louise Bedsworth and Jed Kolko the study relies on a variety of sources, ranging from government data to interviews with planners and public officials.    The study notes that "employment density  matters more than residential density for encouraging transit use as an alternative to driving" and that cities must therefore make investments and policy choices that promote greater commercial density, coordinated with transit.  The study points out shortcomings in the state's recent approaches to smart growth. For instance, it contends that many recent transit investments have not reduced VMTs and that many transit-oriented developments have failed to reduce traffic because residents of those developments often make ample use of their cars. While rail ridership has increased slightly—from 0.9 percent of all commutes in 1990 to 1.4 percent in 2008—the growth is much slower than the pace of transit cost increases and service expansion. The report found that transit ridership is increasing, with recent investments directed toward higher-density areas, where they will be more likely to get people of out their cars. Regional transportation authorities and local governments recognize the importance of integrating land use, transit, and pricing policies such as toll lanes, carpool lanes, and parking fees. And, despite the recession, local governments have increased activities to support the goals of SB 375, and they say the policies they have begun to implement have a strong potential to reduce residents' driving. The study recommends that SB 375 be amended to specifically promote commercial development around transit. This recommendation contrasts somewhat with some of the more popular tenets of smart growth. In many ways, smart growth promotes an urban lifestyle -- meaning a residential lifestyle. In contrast, increased commercial density hearkens back to the 20th century "doughnut holes" in which downtown areas empty out at night once all the employees have fled via automobile.  Driving Change  seems to suggest that the doughnut hole should in fact rise again -- but with employees rolling home on steel wheels rather than their own tires.  The study wades into more controversial territory with its tacit endorsement of pricing tools to influence drivers' behavior. The study claims that pricing tools, such as congestion pricing, tolls, and even a milage tax (instead of a gas tax), could be the most effective means of getting drivers' out of their cars. These tools are, however, the most politically unpalatable and are likely to raise the ire of voters who are both wary of both higher fees as well as government intrusion in their lives.

Ever since Gov. Jerry Brown first announced his intention to eliminate redevelopment agencies the redevelopment establishment – led by the California Redevelopment Association – has taken a hard line: no elimination, no compromise, no relinquishment of the tax increment. The CRA is even preparing for a legal battle based on its interpretation of both the State Constitution and Proposition 22. Beyond these hard-line tactics, the threat of elimination has prompted a robust discussion of what form redevelopment might take once the dust settles. Almost everyone admits that reforms – such as greater accountability and oversight, especially of affordable housing funds – are warranted and necessary. They frequently warn that the state should not "throw the baby out with the bathwater." Others, however, are calling for – and expecting – a rebirth. Even Brown, in his press conference introducing the budget, promised to create "a new tool" for local economic development. And while a $12 billion budget gap that threatens everyone from schoolchildren to senior citizens may not qualify as a blessing in disguise, many boosters and detractors alike see this as the ideal moment to reconsider the state's 60-year-old redevelopment system. "It's good to reconsider things every generation or so," said Madeline Janis, boardmember of the Los Angeles Community Redevelopment Agency and executive director of the Los Angeles Alliance for a New Economy. Redevelopment originally took a sledgehammer to communities that were considered blighted. It was the local tool that worked in conjunction with federal programs that leveled entire city blocks. It still rests on the fundamental mission of fighting blight and promoting economic development mainly as an ancillary benefit. Now the governor's proposal does essentially the same thing to redevelopment itself. And the proposal provides scant guidance for the future. "The thing he didn't do, which is always a problem in these circumstances, is to put forward an alternative," said Michael Teitz, emeritus professor of planning at UC-Berkeley and former research director at the Public Policy Institute of California. "He just said, ‘let's get rid of them.'" Then What? Whether or not redevelopment and TIF financing survive intact, it appears increasingly likely that the scope, mission, and funding mechanisms will change dramatically. Those changes may entail an explicit focus on social goals such as fighting poverty, raising employment, and building sustainably rather than on a mandate to facilitate real estate deals. "I think there will be some form of redevelopment," said Cecilia Estolano, former CEO of the CRA of the City of Los Angeles. "At the end of the day when the dust clears something will be left, but it will look completely different." The governor's budget refers to "successor agencies," but even they are not defined. At the very least, it is likely that redevelopment agencies will end up quite a bit poorer. The so-called "SERAF" redevelopment funding transfer of 2009 and 2010 (as well as smaller transfers in the past) set a precedent by which the state could hobble, but not eliminate, agencies while still recapturing some tax revenue. It appears now that, when faced with possible elimination, the redevelopment community may be willing to discuss a compromise, even one that might violate Proposition 22, the voter-approved ballot measure that protects further redevelopment raids. "We would be interested in any kind of reform conversation that places more restrictions on the amount of a city or county's geography that could be in a redevelopment area and the amount of tax revenue that gets generated in that jurisdiction that would go to redevelopment activities," said Fred Blackwell, Director of the San Francisco Redevelopment Agency. "I think that any reform has to have two parts: there has to be some money that's given up this year to help balance the budget because we are in such a crisis. We have to recognize that we're citizens of the state too.  We depend on fire stations and schools," said Janis. "I know as an L.A. city commissioner I fully support doing something similar to what we did last year with the (SERAF) take." Both activists and redevelopment officials are bracing for, and even welcoming, the elimination and contraction of many redevelopment project areas. A New Mission Many agencies, flush with tax increment monies, gain attention for attracting big-box retailers and even sports stadiums. The future of redevelopment may, however, lie in thinking small. Redevelopment might promote higher returns by focusing on smaller local ventures that create tighter multipliers. "There's a lot of excitement in the economic development field about…doing more endogenous development: looking at the resources we already have within the community so we don't need to throw deep subsidies at the Best Buy to come to our community," said Karen Chapple, Associate Director of the Institute for Urban and Regional Development at UC-Berkeley. "We all know that's going to be a waste of money because it's a zero-sum game anyway." According to Chapple, in many cases the obvious replacement for redevelopment agencies would be business improvement districts. Because they are locally organized, she said that they can often do much more for a neighborhood than can an agency that pursues initiatives from on high. And she said that BIDs can be much more than just boosters or beautification teams. "It's astounding the amount of jobs created, the amount of tax revenue, decreases in crime lots of new sales, vacancy rates declining," said Chapple. "I think we've really underestimated these small-scale types of tools." When Estolano headed LA/CRA, from 2005 to 2010, she made aggressive, though controversial, moves to expand the agency's reach into social issues. She said that burgeoning economic trends such as green technologies offer abundant opportunities for redevelopment agencies and other economic development agencies to think strategically about investments that will provide the greatest social and financial returns. "Whatever economic development ends up being, it should be true economic development," said Estolano. "Study the clusters and the industries and the regions that have competitive advantages…what are the existing businesses doing?" Although this change of mission would be a fairly radical departure from the ay that most redevelopment agencies currently do business, Estolano said that it would not necessarily require major surgery on redevelopment laws. "I don't think it requires a clean (legal) slate," said Estolano. "I think you can redefine blight or change the purpose a bit." Others, however, insist that this moment provides the ideal opportunity for a radical restructuring, not just a redefinition.  Janis would like to see redevelopment formally decoupled from the condition of the built environment and instead focused on economic conditions. "I'm suggesting that we rewrite state law," said Janis. "That we delete the whole section on the findings of physical blight.  Replace that with a standard precondition to redevelopment areas is high poverty and/or high unemployment." Janis admitted that some communities – including small towns and suburbs – that do not meet these conditions might find themselves with no redevelopment at all. "Suburban areas or areas that don't have high unemployment or high poverty, they would lose this as a tool," said Janis.  "I have no problem with that. I don't think that redevelopment in certain parts of the state that are doing pretty well anyway are that necessary." Nuclear Option Whether any of these even requires state sanction remains open to debate. The governor's budget cites research, including an oft-cited 1998 study by the Public Policy Institute of California, suggesting that locally directed TIF financing does little, if anything, for the state's overall economic condition. With redevelopment eliminated, the state government would then, presumably, reallocate the recovered funds and thus leave cities to fend for themselves. This dire situation, against which the CRA is lobbying vigorously, would not be such a bad thing, according to Chapple. Indeed, without the crutch of redevelopment and the constraints of redevelopment law, cities could discover ways to create the net gain that is, according to the PPIC, currently eluding the state. "But most redevelopment agencies are not creative and they look at, ‘here's what the law says we can do; we can eliminate blight and do bricks and mortar development' and that's what they do," said Chapple. "You take away redevelopment and you force cities to do more creative and effective ways of economic development. "It's too bad that most planners have been just knee-jerk supporters trying to defend their redevelopment agencies," said Chappell. This sort of locally grown creativity, which would, according to Estolano, work properly only if cities did intensive evaluations of their competitive advantages and growth industries, could eliminate the competition between cities for big-ticket redevelopment projects. As redevelopment agencies extend themselves to attract development, they create the zero-sum effect that has draw so much criticism. Instead, Steven Levy, longtime economist at the Center for the Continuing Study of the California Economy, said that true economic development requires that localities stop competing with one another and instead recognize that their economic development strategies are all part of a greater whole. "To avoid cities' competing against each other while the Chinese and Indians are laughing at stupid Americans, the tax laws should be changed to divorce local revenues from land use decisions," said Levy. "The best thing cities can do is make themselves great places to live and work while not transferring scarce taxpayer dollars in what can only end up as a race to the bottom." Whither the TIF? It is unlikely, however, that even the most successful BID or stripped-down successor agency would be able to accomplish much without funding. This is especially true of the production of affordable housing – which is almost universally embraced – as well as the funding of infrastructure improvements. On these counts, the loss of state funding may leave cities with few options. "There are other types of ways to finance infrastructure or infrastructure financing districts in some areas, special districts in some, or impact fees," said Chapple. "They don't stretch very far, unfortunately. Then there's bonds, but there's a limit as to how much you can borrow against your general fund; that's why TIF has been so handy." The governor's budget does mention that cities could float redevelopment bonds with a 55 percent popular vote. But cities' bonding capacity may be limited in the current economic climate, and it's unclear how voters would respond. "There's nothing out there that would replace our ability to produce affordable housing and do the kind of infrastructure investments that we've been able to do in the past," said Blackwell. Blackwell said that if the governor prevailed and the TIF was not replaced, it would reduce by half the amount of low- and moderate-income housing that would be produced in San Francisco. And, he said, it would threaten the city's ability to manage "tens of thousands" of units that it already has. "This would be a massive hit unless there was some way to reconnect any use of TIFs back to housing," said Teitz. While such a prospect might unsettle public officials and advocates, the discussion as a whole has jarred the redevelopment community into a new mode of thinking. "It has been provocative and it has really made people think about the future of city-building," said Estolano. "We should take this opportunity to think about what are the core principles of city-building." Contacts: Fred Blackwell, Director, San Francisco Redevelopment Agency, (415) 749-2458 Karen Chapple, Associate Professor of City & Regional Planning, UC-Berkeley, (510) 642-1868 Cecilia Estolano, Chief Strategist on State and Local Initiatives, Green for All, (213) 977-1936 Madeline Janis, Boardmember, Los Angeles Community Redevelopment Agency; and Executive Director of the Los Angeles Alliance for a New Economy,  (213) 997-9400 Stephen Levy, Director and Senior Economist,  Center for the Continuing Study of the Calfornia Economy, (650) 321-8550 Michael Teitz, Emeritus Professor of City and Regional Planning, UC-Berkeley; former Research Director, Public Policy Institute of California

To some, infill development still occupies a quaint niche in the world of city-building. But over the past few years, greenfield development on the urban fringes has gone fallow and a host of economic, social, and regulatory forces have made infill more viable. Attempting to lead that charge is the newly formed California Infill Builders Association, a professional group made up of established and aspiring infill developers who seek mutual support in their effort to bring new development to urban areas. CP&DR Editor Josh Stephens spoke with CIBA President Meea Kang, of Domus Development of Sacramento, and founding board member Geof Syphers, who is chief sustainability officer for Codding Enterprises of Rohnert Part. What's the purpose and motivation behind the Infill Builders Association? Meea Kang: The purpose of the Infill Builders Association is promote the business of developing great neighborhoods in California cities and towns. We are focusing efforts to catalyze investments in city centers in urban areas as well as to promote the policies that support sustainable development. How did it come about? Why now? MK: SB 375 was a big impetus as far as the state realizing that it was time to look at how we're going to grow sustainably as a state as well as make room for the millions of new people who are moving to California. We thought it was a good opportunity as well to align forces, because we as builders often face similar barriers to building in infill locations. We are looking to engage local governments in terms of education and awareness around infill development. What are some of the barriers that make infill development more difficult than you think it should be? MK: The barrier list is quite long. Some of the ones that rise to the top are things like insufficient funding for infrastructure, and the fact that much of the new infrastructure is borne on the development. There's also issues around CEQA and getting local jurisdictions to work with us on exemptions and other avenues to facilitate a more streamlined process.  Sometimes the process of getting an infill project through the local planning commission can take years, and it really is not necessary especially if it means we are re-utilizing existing urbanized uses, which might be abandoned or under-utilized. Geof Syphers: Another one that at least needs to be in the top 10: a lot of the parking standards that are used in urban areas and even in fairly dense small towns were developed for outlying areas where there's no use nearby where parking could be shared. So a lot of the parking standards are much higher than they need to be, and that drives the cost of housing up. We need parking regulations that acknowledge the possibility of using transit and shared parking. What policy initiatives are you gong to be championing at the state level or the local level? MK: We are still working on our legislative agenda, and we are having a lot of conversations with a number of folks. We are looking at the possibility of a parking reduction bill. We're having a lot of dialog at this point. What do you like about SB 375? What do you think the challenges are going to be as people figure out how to implement it?  GS: I think there's a lot of expected answers to that question, but I think one of the things that's not talked about very much is that the local input from our smaller cities and towns is something that is often overlooked as part of ‘regional' or SCS planning. One of the things that we want to support is that the voices of local government in those towns do get heard. We want to make sure that those people have access to good, solid economic data about what decisions will make their economic picture better or worse over time.  We're doing some research in that area to find out in our cities and towns what over time – in boom years and in recession – tends to make the economic picture for things like property taxes and sales taxes more stable, more secure, and more predictable. Who are your members now and whom do you want them to be? GS: Our members now, whether folks who are recognized as leaders in the area of infill development--and particularly good-quality, greener infill development—and the folks that we want to have as members in the near future are the people who want to learn how to do that or who are just beginning to do that. Some of the bigger developers who want to move into that space because they really haven't been doing that in the past but now that they're seeing that things like AB 32 are helping steer them in that direction. They want to learn how to do it, and they want to learn to make money at it. There's a really solid business in doing this, and there's room for other folks to get into that game. How much inertia is there among the greenfield developers who have never done infill? How steep is their learning curve, and how willing are they to embrace this building type? GS: I'm a developer myself, so I can say this: developers are kind of like sheep. If somebody is doing it and they're making money, and they can figure out how they're doing it, they'll follow along. That's not a slight. Sure, there are those of us who have an altruistic bent that we want to slip in. But by and large this is a business decision. The challenge that some of the greenfield developers have is that they have a long period of time when they were going so fast that there was really no reason from a financial standpoint for them to stop and slow down and look at alternatives to their model. Right now, there's a big incentive to do that. There still is a very good market for infill. A lot of the products in infill are much stronger than in greenfield and outlying locations. That motivation at least gets them to the table. The next step is, what are the techniques: how do you finance things? How do you assemble property? How do you get the infrastructure built? But the same people who do greenfield development can do infill. It just requires some training and learning. It seems like the policy has evolved in California. Are the lenders also evolving? MK: I think that the lenders are coming around. I think what you're going to see now where lenders are nervous are funding large new, sprawl, single-family home developments that are farther and farther away from job centers. GS: I think this is a hard time to call anything normal in the lending community. Everything is changing. The very ground of what is normal is changing month-by-month. I think to compare today to 3-4 years ago is kind of silly. It's better to compare it to the middle or end of our last recession. If you do that, you'll see that actually the lending community is coming around. There's a far bigger appetite than emerging from the last recession to get involved with infill projects. And yet, infill development is still slower than we'd like it to be. Is sprawl finally dead in California? GS: Sprawl in the sense of taking farmland and building ranch homes on it that are far away from anything – that business model is dead. People don't want to live in those houses anymore. The new homebuyers are looking for places where their kids can walk to o school where they can get to work with a short drive or a ride on the train. That can be some of the existing suburban communities that we have, if they're built well and reconstructed well with infill projects. They can certainly be some of our urban areas in our bigger cities. I would say that the 3-acre plot that's six miles to the nearest grocery store is dead. The gas bills, the headaches and stress of being in traffic jams all the time. I think that model is dead. MK: However, that doesn't mean that everyone is going to leave those homes and move into the city. I think there's still choice. Any prognostications for the new year and the new administration in Sacramento? Editor's Note: This interview was conducted before Gov. Brown was sworn in. MK: We're very excited about governor-elect Jerry Brown. He's shown a history of being bold in Oakland and the encouragement he had for building housing in the downtown. We hope that he can apply some thoughtful thinking on land use in California that will make infill housing the preferred choice of development in California. GS: We have a partner in the governor's office that is going to look very serious at how to spend California's resources far more efficiently. Our money, our energy, our water, all of those resources. MK: The co-benefits of doing good infill development go far beyond just the sticks and bricks of the housing itself. The fact that we can preserve California's open space by building on already-utilized land, the fact that we can support existing communities in providing more revenue to promote their growth, infrastructure, schools, all of it. It makes sense for California.  Contacts & Resources: California Infill Builders Association   Meea Kang, President, CIBA; President, Domus Development  info@infill-builders.org Geof Syphers, Board Member, CIBA; Chief Sustainability Officer, Codding Enterprises ,  (707) 795-35 50 This interview has been edited and condensed.

Reports indicate that Gov. Jerry Brown will name Ken Alex director of the Governor's Office of Planning and Research. If confirmed, Alex will succeed Cynthia Bryant, who served under former Gov. Arnold Schwarzenegger. The governor's office has yet to make a public announcement and would neither confirm nor deny Alex's appointment.  Alex arrives at OPR with over a decade of immersion in environmental and energy law and policy. Since 2006 has served, under then-Attorney General Brown, as a senior assistant attorney general, heading the office's global warming unit. From 2000 to 2006, he headed the California Attorney General's task force on energy. Alex has litigated countless environmental cases, including a landmark 2007 lawsuit brought against San Bernardino County's general plan. The suit, which settled, successfully linked greenhouse gas emissions to the California Environmental Quality Act (see CP&DR  Vol. 22, No. 7 July 2007 ) and established a precedent for including GHG analysis in CEQA reports.  Alex will arrive at a pivotal moment for OPR , which provides legislative advice and conducts policy research on a range of land use issues. The office is one of the chief resources that localities have for guidance on implementation of laws such as AB 1358: The Complete Streets Act < pdf =">pdf"> and SB 375. OPR recently published a flow chart designed to help local governments understand the California Environmental Quality Act provisions enacted by SB 375 < pdf =">pdf"> .  It also houses the Strategic Growth Council, which oversees the disbursement of Prop. 84 local planning grants (see CP&DR Vol. 26, No. 1, January 2011 ).  OPR's prominence has waxed and waned under different governors. As CP&DR Publisher Bill Fulton noted at the recent UCLA Land Use Law and Planning Conference, OPR was a major force in planning during Brown's first tenure but was eviscerated under Gov. George Deukmejian. The advent of climate change legislation such as AB 32 and SB 375 has, however, given the office more prominence (see CP&DR  blog Dec. 2010 ). It was the subject of three reform bills in 2010, none of which passed.

A lawsuit challenging Sonoma County's ordinance regulating the location and operation of medical marijuana dispensaries has been dismissed because it was not brought within the 90-day statute of limitations. Regardless of the substantive merits of a case, the procedural requirements of the statute of limitations must first be met. In this case, the owner of a Guerneville medical marijuana dispensary called Marvin's Gardens Cooperative attempted to cast his lawsuit as an "as-applied" challenge to the county's 2007 ordinance regulating dispensaries. Sonoma County Superior Court Judge Robert Boyd agreed with cooperative owner that the lawsuit fell within the appropriate limitations period because the lawsuit was brought within 90 days of a county order demanding that Marvin's Gardens cease business because it did not have a use permit. The county issued the "stop order" in October 2009. The county appealed the trial court's decision, arguing that the 90-day statute of limitations began to run when the ordinance took effect in April 2007. The October 2009 stop order was based on that ordinance. A unanimous three-judge panel of the First District Court of Appeal agreed with the county. The court found that the only valid challenges brought by the plaintiff were to the face of the ordinance, not to the way the county applied the ordinance to Marvin's Gardens. Additionally, the cooperative had not attempted to obtain a use permit as required by the ordinance, which made any as-applied challenge not ripe for court review. The cooperative owner argued the suit was an as-applied challenge and could therefore include certain facial challenges under  Travis v. County of Santa Cruz , (2004) 33 Cal.4th 757 (see  CP&DR Legal Digest , September 2004 ). In  Travis , the state Supreme Court ruled that an as-applied suit is not untimely "merely because the theory of challenge is the facial invalidity of the ordinance upon which the permit or condition is based." However, the First District rejected the dispensary owner's statements in determining that the lawsuit was in fact a facial challenge of the ordinance itself. What mattered was the grounds for the lawsuit, all of which were based on the validity of the ordinance. "It is the nature or gravamen of the cooperative's action that determines when the limitations period begins, not the label the cooperative affixes to its pleadings," Presiding Justice Barbara Jones wrote for the court. The court ruled that the statute of limitations began to run upon the effective date of the ordinance in 2007 and that the lawsuit was barred. The Case: County of Sonoma v. Superior Court,  No. A128734, 2010 DJDAR 18781. Filed December 15, 2010 The Lawyers: For the county: Anne L. Keck, county counsel's office, (707) 565-2421 For Marvin's Gardens Cooperative, Matthew W. Kumin, Kumin Sommers, (415) 434-4500

The California Supreme Court will review a case in which Alameda County and a housing developer argue that a California Environmental Quality Act lawsuit filed by project opponents should have been dismissed because the opponents did not raise their objection during the administrative process. In  Tomlinson v. County of Alameda (see CP&DR Legal Digest Vol. 25, No. 14, July 2010 ), the First District Court of Appeal ruled that the typical requirement for the exhaustion of administrative remedies did not apply in a case involving a categorical CEQA exemption. Alameda County had approved a 12-unit housing subdivision after determining it qualified for a categorical CEQA exemption based on the project's urban infill nature. The appellate court overturned the exemption, ruling it could apply only when land lies within an incorporated city. The two-acre parcel in this case is in unincorporated Alameda County. The state Supreme Court did not accept the case on the specific merits but, rather, on the question of exhaustion of administrative remedies. Although the project opponents had participated in a public review process and even filed an appeal with the Board of Supervisors, they did not question the infill exemption before filing their lawsuit. The question for the state high court is whether Public Resource Code § 21177 required the opponents to raise the issue before filing a lawsuit challenging the county's decision to categorically exempt the project from CEQA review. The First District's decision in  Tomlinson  conflicted with a different First District division's decision in  Hines v. California Coastal Commission , 186 Cal.App.4 th  830. In the latter case, the court ruled that project opponents challenging a CEQA exemption had to exhaust their administrative remedies when there was an opportunity to do so. Much like the proposed Alameda County subdivision, the project in question in  Hines  was the subject of several public hearings. The case on review is  Tomlinson v. County of Alameda , No. S188161.

I have published so many corrections in my journalism career that I now write the correction along with the story. To wit: The following story is all made up. There is no draft EIR for the downtown football stadium yet. Yet few readers are aware that I possess the flawless crystal sphere of Nostradamus, which gives me super powers to see accurately into the future. (Note to editor: Do I have to run corrections for inaccurate statements about myself? I mean, who would know?) Gosh, it's really, really hard to guess what the negative impacts might occur, when building a football stadium with seating for 70,000 or so people rises in downtown Los Angeles. Let's see now. TRAFFIC IMPACT: Slightly negative impact. Recommended mitigation: Add 10 lanes each to the Hollywood (101), Interstate 10, Interstate 5 and Harbor (110) freeways. The side benefit is that Caltrans will be distracted from its long-stated goal of ploughing up the city of South Pasadena to complete the 710 Freeway, to ensure that Pasadena matrons have more convenient access to the burly longshoremen in Long Beach. (What, you didn't know about that?) Suggested mitigation: Convert the Los Angeles Convention Center to a multi-level parking structure. Economically, this is a much better solution for the convention center than trade shows. The Dallas Cowboys charge $75 to park at their stadium. Do the math. AIR QUALITY: Somewhat negative impact. What's another day of 20,000 or 30,000 cars descending on downtown Los Angeles? Aforementioned site already has a lot of cars. Who's to notice? Plus, football teams are frequently on the road, causing congestion and pollution in other cities. Suggested mitigation: Play the entire season out of town. ARCHITECTURAL QUALITY: Teensy-weensy negative impact. I, for one, can think of nothing more pleasant than driving by an enormous building that resembles a very large salad bowl that is spinning rapidly on a turntable, with the lettuce beginning to fly out. The only drawback to this design is that we can still see the 53-story Marriott Hotel tower, standing all by itself on the southern end of downtown like a great big you-know-what. Suggested mitigation: Make the stadium at least 10 stories higher. ECONOMIC IMPACT ON CITY OF LOS ANGELES: Negligible, if you don't count the $300 million in bonding authority that the developer is requesting from the city. The developer promises to service the debt. Insofar as we are doing away with redevelopment (at last report), the city will not need this money for any other purpose, such as housing, parks, etc. Plus: We have a fictitious consultant's report that will tell us all the benefits that the city will enjoy from this massive, ugly and inappropriate sports facility. SUMMARY OF FICTITIOUS CONSULTANTS' REPORT: "We see very positive economic benefits accruing to the City from the construction and operation of said Stadium … If we tabulate all the increase in receipts going to parking valets, tee-shirt vendors, caterers providing food and drink to corporate fat cats entertaining their equally fat clients in exclusive sky boxes, plus the assorted sex worker or two, we arrive at a conservative estimate of $20-$30 billion of economic benefit for the City in the next two decades. Yessir! No doubt about it … (P.S. Please take notice of the Invoice attached to this Report for $250,000, which is the cost of cooking up this nonsense for the City Council.)" Outrageous distortions? Perhaps. I'll make you a deal: All interested readers should bookmark this article and wait until the actual Draft EIR and Consultant's Report actually come out. I promise you that the predictions obtained from the flawless crystal sphere of Nostradamus will be alarmingly close to actuality. --Morris Newman

Gov. Jerry Brown's proposed state budget will do more than merely plug a $24 billion deficit. According to some, it will also lead to shuttered factories, recidivism among ex-convicts, and the flight of companies and jobs to rival states such as Arizona, Nevada, and Texas. Faltering clothing manufacturer American Apparel could be pushed closer to the brink of bankruptcy.  At least if Brown's proposal to do away with Enterprise Zones is adopted along with the proposed elimination of the redevelopment program. Despite the program's geographically oriented name, California's Enterprise Zones are not technically designed to foster urban renewal. They are, rather, employment programs that use a variety of incentives -- mainly state tax credits -- to encourage employers to hire workers in designated areas. Much like California's far more widespread system of redevelopment, cities and counties have embraced Enterprise Zones as crucial components of their local economic development plans.  City officials say that the loss of both would be a devastating one-two punch, depriving them of major tools to promote local development. Because redevelopment is operated on a locality-by-locality basis, Enterprise Zones are considered the state's largest economic development program.  Though redevelopment, with nearly 400 active agencies and a sophisticated lobbying infrastructure, has been fighting a vocal battle since the governor's Jan. 11 budget announcement, backers of Enterprise Zones are only now rallying to save the program, even in the face of studies suggesting that they are ineffective. At least one piece of legislation has been introduced to reform Enterprise Zones, and localities are launching a lobbying effort in Sacramento.  "It just seems wrongheaded to me," said Craig Johnson, Enterprise Zone manager for the City of Long Beach and president of the California Association of Enterprise Zones. "This is not a program to be thrown on the scrap heap but a program to be taken advantage of and utilized." Johnson said that the program helped to create or retain up to 10,000 jobs in 2010 alone.  The governor's budget proposal did not mince words regarding Enterprise Zones. Cutting the program would, according to the proposed budget, save $381 million in 2010-11 and $581 million in 2011-12. But beyond that saving, the budget implies that it would also be getting rid of a program that has been ineffectual and even mildly detrimental to the state's economy. The draft budget states that Enterprise Zones shift "economic activity from one geographic region within California to another geographic region within California."  The budget proposal even implies that the program is less than a zero-sum game because most jobs created under the program would have been created anyway. Therefore, the allocation of tax credits to those jobs results in an estimated $60,000 net loss to state coffers per job.  Administered by the Department of Housing and Community Development, the Enterprise Zone program is limited, by statute, to 42 zones throughout the state at any given time. Zones have a lifespan of 15 years. The budget also targets similar, but much less widespread, programs including Targeted Tax Areas, Manufacturing Enhancement Areas, and Local Agency Military Base Recovery Areas. There are no limitations on the physical size of Enterprise Zones, but at least 50 percent of zone residents must make less than median income in their respective counties.   The state estimates that these areas encompass 1.5 million workers, only a fraction of whom are actually involved in the Enterprise Zone tax credit program.  The budget cites a 2009 study by the Public Policy Institute of California, claiming that Enterprise Zones failed to create a net gain in jobs.  "Our main finding…was that Employment Growth in enterprise zones was no faster than growth in very similar comparison areas," said Jed Kolko, co-author of "Do California's Enterprise Zones Create Jobs?" "We concluded that, for what we believe to be the program's primary goal, enterprise zones on average had no effect." Kolko said that many companies were not even employing intended workers, because targeted workers were defined so broadly that many jobs went to workers who were not at risk or under-employed in the first place. As well, the tax credits apply to certain capital expenses, so businesses could invest in machinery without hiring additional employees. Therefore, while companies may have benefited from the tax credits, the program did not create intended employment gains.  Watchdog groups such as the California Budget Project have reviewed existing literature on Enterprise Zones and reached similar conclusions.  "Contrary to public perceptions, this is a program that benefits the largest, wealthiest corporations in California, not small business," said Jean Ross, executive director of the group California Budget Project. Ross added that companies might choose to locate in an Enterprise Zone as opposed to another part of a given metro area.  Based on the research of PPIC and others, the governor's budget concludes that Enterprise Zones are "not of statewide interest" but rather are "local economic development run through the tax system."  Backers of Enterprise Zones say that--especially on this point--the governor could not be more mistaken.  "I would disagree with the assertion that there isn't a net benefit," said Assemblymember Cameron Smyth (R-Santa Clarita), whose district was just awarded a new Enterprise Zone. "If we don't have Enterprise Zones it's just going to reshuffle those dollars outside of California."   "Our neighbors are aggressively pursuing California companies," said Johnson. "Our response should not be a collective shrug." Officials from both sides of the political aisle say that Enterprise Zones offer a poignant foil that illustrates the unfriendliness of California's business environment. They cite states such as Nevada, Arizona, and Texas that actively lure businesses away from the state with the promise of lower taxes and lower costs of doing business. Enterprise Zones, backers say, are one of the only tools the state has to enable the state to compete with those plum offers from California's neighbors.  "California has not had a overall plan, strategy when it comes to the issue of keeping and growing jobs, as opposed to other states," said George Runner, a Republican member of the Board of Equalization (2nd District). "Enterprise Zones have become the tool for local governments to do that competition when they know that there's this giant sucking sound from other states."  "We keep hearing from businesses that there needs to be reform when it comes to tax structures and regulation…that the state of CA can become more business-friendly," said Assemblymmeber Manuel Pérez (D-Indio). "To some degree, I agree with them."  Runner has even proposed effectively doing away with Enterprise Zones by extending their benefits to the entire state.  In sharp contrast with the literature, local administrators of Enterprise Zones bring up seemingly endless examples of companies that were considering relocating out of state and were persuaded to stay by Enterprise Zone incentives. Johnson cited a Bayer pharmaceuticals factory that set up in Berkeley; South Gate Community Development Director Steve Lefever of the City of South Gate said that his region's Enterprise Zone attracted an American Apparel factory.  The macroeconomic argument for saving Enterprise Zones is the same as that for saving redevelopment: they both generate economic activity which, in turn, generates tax revenues and incalculable positive local externalities.  "It's helped us retain and grow some of the jobs here," said Rick Farley, City of Oroville  Enterprise Zone and Business Assistance Coordinator. "Historically this area has been very reliant on natural resources—logging, mining--as the lumber mills have closed we've been working to attract other types of businesses." The mantra for Enterprise Zones is "reform, don't eliminate." Taking an early lead in that effort is Assemblymember Pérez, who last week introduced a package of Enterprise Zone reform bills: AB 231, AB 232, and AB1X 11. These bills would, respectively, promote greater oversight and reporting, tighten the defintion of Targeted Employment Areas, and promoted improved linkages with workforce and community development agencies.  Johnson of the California Association of Enterprise Zones said that his organization fully supports reform to make the program more accountable and effective. He said that proposals such as salary caps or more fine-grained designation of eligible workers might be entertained.   "One thing that the California Association of Enterprise Zones has acknowledged all along is that there's no such thing as a perfect program," said Johnson.  Contacts & Resources California Department of Housing and Economic Development Enterprise Zone Program Map of Statewide Enterprise Zones Craig Johnson, President, California Association of Enterprise Zones ,  Jed Kolko, Associate Director and Research Fellow,  Public Policy Institute of California , (415) 291-4400 Manuel Pérez, Assemblymember, 80th District  (Indio),  (916) 319-2080 Jean Ross, Executive Director, California Budget Project , (916) 444-0500 Cameron Smyth, Assemblymember, 38th District (Santa Clarita), (661) 286-1565

This is how far out of whack things have gotten in Sacramento: Jerry Brown is now the one who sounds sane. Earlier this week, Brown canceled the planned sale of 11 state-owned office complexes to a group of private investors calling themselves, ironically enough, California First. The deal would have netted the state about $1.2 billion, equal to roughly 5% of the state budget deficit. I hated the idea and said so last April. The Legislature didn't think much of the sale either, but members held their noses and voted for it as part of the state budget package. Arnold Schwarzenegger, who was a savvy real estate investor before he became governor, gave lawmakers no choice. Rather, the governor who claimed to spurn budget gimmicks charged forward with the plan to sell commercial real estate in a lousy market and to spend the one-time proceeds on continuing expenses. Thankfully, former members of state building authorities in Los Angeles and San Francisco – whom Schwarzenegger fired for daring to disagree with him – tied up the sale in court long enough for Brown to kill the scheme. In canceling the deal, Brown cited a Legislative Analyst's Office study that equated the sale to a 35-year loan at 10.2% interest, or double the interest rate the state pays on its general obligation bonds. According to the LAO study released in November, the sale would end up costing the state an extra $6 billion over 35 years. Brown charitably called Schwarzenegger's plan "short-sited" and "not prudent." Instead, the new/old governor proposes borrowing $1.2 billion from special fund reserves and paying the money back over three years at a total cost to the general fund of about $18 million. Now, remind me again which governor is the fiscally responsible Republican and which one is the tax-and-spend Democrat with far-out ideas. – Paul Shigley

Quick: what economic sector most reminds you of Los Angeles? Hollywood? Aerospace? Yoga? According to sports and entertainment giant AEG and a certain pastoral insurance company, it's none of the above.  Last week AEG announced that Los Angeles' nonexistant downtown football stadium, to be developed door to Staples Center and LA Live, will be funded in part by a sponsorship by Farmers Insurance. Thus, the world will know Los Angeles as the home of -- I'm not kidding -- Farmers Field.  I suppose it makes sense in a roundabout way, since it will probably be the only farmer's field in the entire county. Granted, Farmers Insurance is actually based in Los Angeles, but no one is likely to know that. This is thus the strangest naming-rights deal since the Phoenix Cardinals, who were desperate to move out of a college stadium (Sun Devil Stadium), moved into a stadium named for a college (University of Phoenix Stadium). For this deal, AEG will get $700 million towards total development costs that exceed $1 billion. At least Farmers will get its money's worth, since everyone who hears the name is going to do a double-take.  Let's see what else is the matter here:  CEQA Exemption AEG President Tim Leiwickie has told the Los Angeles City Council that AGE is asking state lawmakers to approve a CEQA exemption for the project. Raise your hand if you're surprised. When CP&DR was covering the end of last year's legislative session, the Planning & Conservation League was making a lot of noise about the possibility that AEG would seek a CEQA exemption. The previous year such an exemption had been granted to a competing project  to be developed by Ed Roski's Majestic Realty Co. in the City of Industry. At the time I spoke with AEG Vice President Michael Roth, who swore up and down that a stadium was just a glimmer in AEG's eye. He assured me that no CEQA lobbying was going on and that no such plans were in the works. Let's just say that he was pretending to be candid, and I was pretending to believe him.  But Roth could even have argued that he didn't want a CEQA exemption, because thanks to the Industry precedent, AEG would probably get one whether it liked it or not. As CP&DR Publisher Bill Fulton wrote in December 2009, "it would be impossible now for the state to deny the same exemption to football stadiums." Basically, Ed Roski has done everyone else's lobbying for them.  Location As I wrote a few months ago, Los Angeles has a perfectly good, centrally located, well used site for a football stadium. In fact, it doesn't just have the site. It has the actual stadium: the Los Angeles Memorial Coliseum. Granted, the Coliseum needs an overhaul. But what it doesn't have is an adjacent hotel-and-entertainment complex to lure football fans and their wallets. Instead, the Coliseum is a public facility in the middle of a public park.  Funding For $700 million the residents of Los Angeles can probably tolerate a lot. But the city is still being asked to float $350 million in bonds to cover the demolition of the unloved West Hall of the Convention Center and other local improvements. Fortunately, members of the Los Angeles City Council seem to be wary of the potential public cost. Then again, there's no bigger power broker in City Hall than AEG these days.  Design & Roof I'm not about to say that the stadium needs a starchitect. But the three designs  proposed by mega-firms Gensler, HKS, and HNTB have about as much charm as as an industrial feedlot. Two features common to all three designs stand out: First, no matter how many Justin Bieber concerts it will accommodate, a retractable roof should be outlawed in Southern California. Toronto, yes. Los Angeles, no. Second, does it have to be an enclosed box? All three designs stand so tall that they appear to sever all connection to the surroundings. If you're going to put a stadium downtown, why not at least offer views of its skyline? (Something that Pittsburgh's Heinz Field does particularly well.)  Urbanism Although I still prefer the Coliseum site, I'll give the AEG stadium some credit. Whereas some baseball stadiums have been masterfully integrated with their urban environments (Camden Yards, AT&T Park), football stadiums have never been quite so cozy. At least AEG's is not flung beyond the suburbs, divorced from the city that it represents (like New York's Meadowlands and Phoenix's U of P Stadium). It's even kind of close to transit (the Blue Line/Expo Line).  For all the strikes against it (oh yeah, there's also a recession going on, and LA has no football team), I have a gut feeling that this thing is going to happen. So dust off those overalls, jump on the light rail, and get ready for some football. The L.A. Tractors are coming to town.

In advance of the Feb. 9 Senate Governance and Fi­nance Committee hearing on the fate of redevelopment, the Legislative Analyst's Office has produced an extensive briefing paper encouraging senators to ask some hard questions about Gov. Jerry Brown's proposal to eliminate redevelopment and redistribute its tax increment.  The meeting agenda  <.doc> includes time for speakers from the LAO as well as from organizations such as the California Redevelopment Assoication, the League of California Cities, and the California Budget Project. Representatives of the League and CRA have already said that they will encourage legislators to oppose the governor's plan. The briefing paper encourages senators to consider six broad categories of concern:  1. Dissolving Redevelopment Agencies. What will happen to agencies' contracts and outstanding bonds? Does Proposition 22 prevent dissolution without legislation? What will the 'successor agencies' be? 2. Budget-Year Effects. Do RDA's debt obligations amount to more or less than the Department of Finance's estimate of $2.2 billion? How will the redistribution of the tax increment work? And can it be allocated to schools and trial courts, as the governor proposes?  3. Out-Year Effects. After the intial windfall, what will be the long-term fiscal effects of eliminating redevelopment?  4. Affordable Housing. Will the 20% set-aside be dissolved along with the rest of redevelopment? Can local agencies successfuly inheirit RDAs' affordable housing programs?  5.  Measuring Outcomes. How will the state determine if the elimnation of redevelopment created a net gain for proposed beneficiaries?  6. Economic Development Alternatives. How can the state and localities promote local economic development in the absence of redevelopment?  To read the entire briefing paper and all of the LAO's questions, please click here <.doc> .  Info:  Senate Governance and Fi­nance Committee  "Restructuring Redevelopment: Reviewing the Governor's Budget Proposal" 9:45 a.m. to 12:00 noon Wednesday, February 9, 2011 State Capitol, Room 112

A few weeks ago, I had a good time taking apart anti-anti-sprawl critic Wendell Cox's self-referential analysis supposedly showing that highly regulated metropolises have higher housing costs because they are highly regulated. (" Wendell Cox's Voodoo Economics .") In sum, Cox concluded that because any variation in housing cost must be due to regulation, all variation in housing cost must therefore be due to regulation. One thing Cox didn't consider was the possibility that higher housing prices might have something to do with higher incomes. It stands to reason that metros with higher incomes might have higher housing prices. As the average homebuyer knows, the question of how big a mortgage you can carry – and therefore how much you can pay for a house – is directly connected to how much money you make. So it was a little surprising to see Cox's New Geography piece the other day , which analyzed income trends in 28 large metros from 2000 and 2009.  The changes in income were all over the place and Cox seemed a bit baffled by the whole thing (why would incomes in Atlanta and San Jose go down so much, while they went up so much in Baltimore and Pittsburgh?).  One thing that struck me is that most of the metros Cox looked at in his income analysis were also metros he looked at in his housing price analysis. Since Cox didn't bother to draw the connection, I decided to do it myself. In his housing analysis (which was based on 2010 data), Cox picked 11 metros – six of which he characterized as having strict land use regulations and five of which he characterized as having looser land-use regulations. He concluded that the strictly regulated metros had much higher home prices than they "should," while in the other metros the home prices were just about right. (His definition of "should" meant calculating construction cost for the average home in each metro area and then adding 25% to cover what he believes the cost of land and regulation "should" be.) In his income analysis of 28 metros, Cox used five of his "highly regulated" metros – Washington-Baltimore (which were combined in the housing price analysis but separate in the income analysis), San Diego, Seattle, Portland, and Minneapolis-St. Paul.  He also used three of his loosely regulated metros – Houston, Dallas-Fort Worth, and Atlanta. He used 2009 data for income, which lines up pretty well with 2010 data for home prices. So, I thought it would be interesting to compare the difference in income in Cox's metros to the difference in home prices. I used his three loosely regulated metros. On the highly regulated metros, I wanted a comparable number, so I threw out San Diego (which even Cox's fans admit is a weird outlier) as well as Minneapolis-St. Paul, which I personally think isn't very highly regulated and is much smaller than the three loosely regulated metros. I left in Baltimore and Washington (which I counted twice in the housing to make up for the fact that the income numbers were separate) as well as Seattle (a pretty good comparable in size to the three loosely regulated metros) and Portland (because, while it's small, it's everybody's favorite example of regulation). Admittedly, I wound up with one big metro in the Mid-Atlantic and two in the Northwest. But the other three are all in Texas and Georgia, so it seemed fair. In a nutshell, here's what I found: In 2010, the average home price in the four highly regulated metros was 38.9% higher than the average home price in the three loosely regulated metros. But – and here's the interesting thing – the median income in the highly regulated metros was 20.6% higher than the median income in the three loosely regulated metros. Cox's "growth management" metros have higher home prices. But they also have higher incomes. You can't draw a causal connection from my back-of-the-envelope analysis, but you could certainly hypothesize that about half of the additional home price (20% out of the 40%) is due to higher incomes. This would mean that somewhere between 0% and 20% would be due to stiffer regulation. There may be other factors, such as overall availability of land supply because of topography and public land ownership (a particular issue in Seattle). I can't say for sure, but this smells right to me. Some years ago when Rolf Pendall and I reviewed the literature on urban growth boundaries, we came to the conclusion that – to vastly oversimplify – the evidence showed that UGBs increase home price somewhere between a little and a lot. So I'll stipulate right now: Stiff regulation adds somewhere between 0% and 20% to the price of a house. Remember, this is all based on Cox's own data and analysis – from two different pieces of research that he never put together. The other funny thing about his metro income analysis is that he does truly seem baffled by the fact that metros with stagnant populations (like Pittsburgh) are seeing their median incomes go up, while metros with growing populations (like Atlanta) are seeing their median incomes go down. He wants to use this data to also refute the smart growth crowd – his basic argument being that this data proves prosperity doesn't like in a big, populous central city and that regional prosperous may depend on decentralization and sprawl in the suburbs, where the population is still increasing in some of these metros. But that's old-fashioned thinking – the kind that equates prosperity with population.  As Pittsburgh and Baltimore and Cox's own St. Louis have proven, you can increase incomes and wealth without increasing population – because the measure of prosperity in America today is not the number of people but the skill and creativity they bring to creating wealth. The "growth without growth" phenomenon is very real, as I noted in a recent Planetizen column excerpted from my book Romancing The Smokestack – and it reveals that the old pro/anti sprawl debate is virtually irrelevant when we talk about economic well-being. --Bill Fulton