A Stanislaus County superior court judge appears to have cleared the way for housing construction at the controversial Diablo Grande development in the hills west of Interstate 5, near Patterson. Judge Donald Shaver said Stanislaus County may permit construction that would be served by water sources that have been "fully and adequately reviewed under CEQA." Project proponents contend the Oct. 1 ruling allows them to pursue the first phase of the project, which amounts to 2,000 homes, two golf courses, a hotel and a winery. The county Board of Supervisors is scheduled to consider the matter November 9. Originally, the Fifth District Court of Appeals ruled that the county's EIR for the project was inadequate because it deferred analysis of water supply issues. Developers had proposed various water transfers from Central Valley farmland. That case, Stanislaus Natural Heritage Project v. County of Stanislaus, (1996) 48 Cal.App4th 182, has become known as Diablo Grande I. After the county revised the EIR, a second round of litigation (Diablo Grande II) commenced. In July, Judge Shaver ruled that the revised EIR still did not adequately address water supply. (See CP&DR Legal Digest September 1996, August 1999.) However, the court determined two sources of water, an 8,000 acre-foot transfer from the Berrenda-Mesa Water District and about 500 acre-feet of groundwater, have been adequately reviewed under CEQA and found to be secure, said Rick Jarvis, an attorney for the developer. Assistant County Counsel Vernon Seeley agreed that the October 1 ruling lets the county approve portions of the project so long as supervisors allow for public input and make certain findings. The consolidated cases are California Farm Bureau Federation v. County of Stanislaus and Protect Our Water v. County of Stanislaus, Nos. 181448 and 181472.

In his first year as governor, Gray Davis has gained a reputation as a chief executive quick to wield the veto pen — and the field of planning and development legislation proved to be no exception. Even though the Legislature passed only small and incremental bills — opting against sweeping change in any area — Davis vetoed one-third of all planning and development bills that reached his desk. "I think he actually striped the middle pretty well," said Clyde McDonald, Assembly Local Government Committee consultant. "All the bills he vetoed had a fair argument one way or the other." In a few cases, Davis vetoed bills to protect the state's general fund. But the majority of vetoes seemed to reveal a governor intent on sending a strong message to the Legislature as to who will control the Sacramento agenda. Most of his veto messages seemed to be based not on an overarching vision but on some specific aspect of the bill that he did not like. And in most cases he claimed to be open to similar legislation next year — if the things he did not like were removed. For example, he vetoed AB 1553 (Longville), the so-called "Redlands doughnut hole" bill, which would have resolved a controversial development dispute in San Bernardino County by requiring that county's Local Agency Formation Commission to remove a prime parcel of land from Redlands's sphere of influence. While acknowledging that the solution envisioned in the legislation — joint planning and revenue sharing on the property — was reasonable, Davis essentially ordered the local governments to reach agreement. "This is a local land use dispute and locally elected officials should resolve it," the governor said in his veto message. But, he added, he would sign the bill next year if the locals remain at odds with one another. "That veto says, I believe in home rule, so go home and rule," commented Peter Detwiler, Senate Local Government Committee staff director. Davis also vetoed AB 1480 (Cardoza), a bill banning most mining from Williamson Act land, apparently because it contained an exemption for a large gravel miner in Placer County who might otherwise have opposed the bill. Once again, Davis supported the cause but criticized the bill itself, saying "the creation of such an exemption in the closing days of the session denied the opportunity for full public comment and review." William Geyer, lobbyist for the Resource Landowners Coalition, likened the AB 1480 veto to Davis's veto last month of AB 84, a last-minute bill that would have pre-empted the right of local government to issue land-use permits to certain "big-box" retailers. (See CP&DR, September 1999.) "I took the veto message to read, take out the big mining box and I'll sign it," Geyer said. With one veto in particular, however, Davis stepped into the middle of one of the most contentious development issues in the state — the activities of Pacific Genesis Group Inc. in working with municipalities to issue Marks-Roos bonds. In doing so, Davis angered fellow Democratic office-holders. At the urging of Pacific Genesis and the California State Council of Laborers, Davis vetoed AB 1511 (Florez), a bill that would have prohibited mutual water companies from entering into joint-powers authorities with public agencies. The bill was aimed at blocking a Marks-Roos issue to finance infrastructure for a development project in San Bernardino County. The Marks-Roos issue was initiated with Pacific Genesis's assistance by the small cities of Waterford and San Joaquin, located hundreds of miles away in the Central Valley. After legislation passed last year prohibiting Marks-Roos issuers from investing in projects geographically remote from the project, a mutual water company was formed by the project's developer, and a JPA was created among the water company and the two cities. The cities have since withdrawn from the JPA, but AB 1511 would have prohibited this arrangement and at least two others like it. State Treasurer Phil Angelides and Attorney General Bill Lockyer, both of whom have been critical of the Waterford/San Joaquin deal backed AB 1511. But the Council of Laborers and Pacific Genesis lobbied Davis to veto the bill, saying that it would kill the three projects and eliminate several thousand jobs. In his letter to the governor, David Fitzgerald, chairman of Pacific Genesis, complained personally about the attitude of Dan Reeves, Angelides's legislative aide. Fitzgerald urged Davis to veto the bill "so that we can terminate these annual legislative forays that no more than ten to twelve California residents even care about." Davis issued the veto, saying he feared a loss of jobs and indicating that he would have signed the bill if it were prospective and did not affect projects already in the pipeline. Angelides and Lockyer issued a swift and angry response, saying, "We will continue to work together to enforce existing law and assure that abuses are halted." In three cases, Davis vetoed planning and development bills that would have affected the general fund. These were: o AB 47 (Cardoza), which would have shifted revenue from Williamson Act cancellation fees from the general fund to the Agricultural Land Stewardship Fund. o AB 597 (Longville), which would have instructed Caltrans to create flexible highway standards to encourage New Urbanist-style designs. Davis said that the $300,000 program "should be considered as part of the normal budget process." o AB601 (Cedillo), which would have appropriated $6 million to assist property owners in downtown Los Angeles and in Compton to convert older, unleased commercial buildings for residential use. As with the other vetoes, Davis expressed support for the goal but objected to the cost. At the same time, Davis signed more than a dozen bills — most of them minor — affecting planning and development issues in the state. These included the following: o AB 178 (Torlakson), which prohibits jurisdictions from providing financial incentives to lure certain types of retailers from neighboring communities. In his veto message for AB 84, Davis cited AB 178 as a better policy approach. o AB 262 (Runner), a routine bill that provides an implementing statute for last year's Proposition 11, a constitutional amendment permitting sales-tax sharing between cities. o AB 670 (Papan), which allows BART and transit districts in San Mateo and Santa Clara counties to acquire land for transit-oriented developments. Provisions allowing the agencies to use eminent domain for this purpose were dropped at the last minute. o AB 1229 (Assembly Agriculture Committee), which renames the Agricultural Land Stewardship Program as the California Farmland Conservancy Program and expands the program's mission and eligibility. o AB 1385 (Battin), which permits gaming contracts between Indian tribes and the state — but specifically states that those contracts are not "projects" under the California Environmental Quality Act. o AB 1505 (Ducheny), which allows five-acre farmworker housing projects on Williamson Act land. o AB 1555 (Longville), which re-instates lapsed statutory provisions to expedite annexations of county "islands" in the LAFCO process. The bill, however, contains many exemptions. o AB 1630 (Lowenthal), which appropriates $320,000 to permit the Los Angeles County LAFCO to study detachment of the Wilmington/San Pedro area from the City of Los Angeles. o SB 115 (Solis), which requires the Office of Planning and Research to study and make recommendations on incorporating environmental justice issues into CEQA. o SB 216 (Solis), which creates the San Gabriel Mountains and River Conservancy, the seventh state land conservancy. o SB 497 (Rainey), which requires the state controller to investigate reported violations of redevelopment law and authorizes the attorney general to file enforcement lawsuits. o SB 526 (Kelly), which makes it easier for the Coachella Valley Mountains Conservancy to buy land to implement habitat conservation plans and natural communities conservation plans, especially in desert areas. o SB 754 (Hayden), which creates the Los Angeles River Conservation and Restoration Commission. The panel is charged with writing a plan to restore the Los Angeles River to a more natural state. o SB 807 (Senate Agriculture and Water Committee), which permits LAFCOs to approve extraterritorial urban services by cities and special districts in response to threats to public health and safety. The bill emerged in response to concerns that a previous ban on extraterritorial services was too strict and did not permit alleviation of hazardous sewer or fire situations. o SB 948 (Alarcon), which makes a series of relatively minor changes to the Housing Element law — but, significantly, tightens up the findings local governments must make to deny an affordable housing project. o SB 985 (Johnston), makes a series of minor changes to the Williamson Act. Contacts: Clyde McDonald, Assembly Local Government Committee, (916) 319-3958. Peter Detwiler, Senate Local Government Committee, (916) 445-9748. S.R. Jones, California Association of LAFCOs, (530) 265-7180. Cathy Calfo, Treasurer's Office, (916) 653-2995. William Geyer, Resource Landowners Coalition, (916) 444-9346.

The Ninth Circuit U.S. Court of Appeals has rejected a takings claim and request for a jury trial filed by a property owner in Washington who disputed a zoning decision made under that state's Growth Management Act of 1990. It was the Ninth Circuit's first takings decision since the U.S. Supreme Court voted 5-4 to uphold a takings decision and jury award of damages in May. In City of Monterey v. Del Monte Dunes at Monterey Ltd., 119 S. Ct. 1624, the high court broke new ground by allowing an aggrieved landowner to plead his case in front of a jury, which issued a $1.45 million damages award. (See CP&DR Legal Digest June and July, 1999.) But the Ninth Circuit said Del Monte Dunes does not establish a right to a jury on every takings claim. The appellate court noted the "facts and procedural posture in Del Monte Dunes were extreme," and quite different from the case at hand. Still, writing for the Ninth Circuit's unanimous three-judge panel, Judge M. Margaret McKeown noted, "Frankly, we have some difficulty parsing the distinctions laid out by the Supreme Court concerning when a jury trial is required. We find ourselves in uncharted territory with a map for related but different waters." The Washington case was brought by the Buckles family, which owns 10 acres in unincorporated King County. The family purchased the property in 1974 and has occupied its single-family residence, guest house and barn since 1979. A salmon-spawning stream crosses the property. The land is in the midst of a large rural residential area, although some small commercial uses abut the Buckles' property and other neighboring properties were zoned industrial or commercial. When King County began widespread rezoning pursuant to the Growth Management Act (GMA) in 1994, it proposed changing the Buckles' zoning from Residential with a one-acre minimum lot size, to Residential with five-acre minimums. The Buckles lobbied the King County Council and had the zoning changed to Rural Neighborhood, which allows limited commercial uses. But the King County Comprehensive Plan was challenged on numerous grounds, including a claim that the Buckles' last-minute rezoning violated the GMA's public participation requirements. The Growth Management Hearings Board for Central Puget Sound, established by the GMA to decide appeals, ruled that the rezoning violated the public participation mandate. The hearings board sent the comprehensive plan back to the King County Council, which conducted public hearings and settled on the residential five-acre zoning for the Buckles' lot. The Buckles challenged that decision at the hearings board, but lost. They then filed substantive and procedural due process claims against King County and the hearings board members under the federal Civil Rights Act, 42 U.S.C. §1983. They later added a takings claim under the federal and state constitutions. Circuit Court Judge John Coughenour dismissed the suit against the hearing board members and issued summary judgement for King County. On appeal, the Buckles argued that changing the zoning from commercial to residential was an unfair downzoning, and placed greater restrictions on them than on neighboring property owners who have commercial uses. They argued that the King County rezoning did not advance a legitimate county interest, was a taking without just compensation, and that a jury should decide the dispute. But the Ninth Circuit said the Buckles ignored the facts. Their lot is part of a large tract zoned as residential and has never been used for commercial purposes, the court noted. Furthermore, the Rural Neighborhood zoning was never final and was the product of a GMA violation. "The county cannot ‘take' what the Buckles did not have. The zoning designation for limited business uses was never final and Buckles ended up exactly where they started — residential use," McKeown wrote. The court cited landmark cases to determine that a taking did not occur. "A land use regulation does not constitute a taking if the regulation does not deny a landowner all economically viable use of the property and if the regulation substantially advances a legitimate government interest," McKeown wrote. She cited Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987), and Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Buckles did not suffer a loss because even their own appraiser valued the property at three times its 1974 purchase price. Furthermore, the court concluded, drawing a line at existing commercial uses in a rural area is a legitimate governmental activity. As for a jury trial, the court said: "Under Del Monte Dunes, a plaintiff has the right to a jury trial on the ‘predominately factual question' of ‘whether a landowner has been deprived of all economically viable use of his property.'" Again, that was not at issue with the Buckles. The Del Monte Dunes case was dissimilar in that the City of Monterey five times rejected proposals that appeared to comply with city-approved zoning for the property. In this case, the Buckles argued that their zoning was inconsistent with zoning on surrounding properties, the court said. The court rejected the procedural and substantive due process takings claims and upheld the absolute immunity of hearings board members. "If Board members were not protected by absolute immunity, we predict that many losing parties would turn around and sue the Board members in a damages action instead of appealing the Board's substantive decision to the Superior Court. … Permitting suits against the quasi-judicial decision makers would discourage knowledgeable individuals from serving as Board members and thwart the orderly process of judicial review," McKeown wrote. The Case: Bruce Buckles v. King County, No. 98-35270, 99 C.D.O.S. 7504, 1999 Daily Journal D.A.R. 9542, filed September 10, 1999. The Lawyers: For Buckles: Richard M. Stephens, Groen & Stephens, Bellevue, Washington. For King County, H. Kevin Wright and Darren Carnell, King County Prosecuting Attorney's Office, Seattle.

The federal Superfund law allows citizens to file lawsuits challenging remedial cleanup of hazardous material at a former military base, the U.S. Ninth Circuit Court of Appeals has ruled. The September ruling permits a federal lawsuit to move forward against the Army over burial of hazardous materials at the former Fort Ord Army base in Monterey. Environmentalists charge that the Army's plan to bury contaminated soil in an on-site landfill is subject to review under the California Environmental Quality Act. Charles Cadart, an attorney for California Public Interest Research Group, one of the plaintiffs, said the ruling means citizens have oversight of military base cleanups. A companion lawsuit against the state Environmental Protection Agency and the Department of Toxic Substances Control — which approved the Army's cleanup plan — remains alive in state court. In 1990, the U.S. EPA placed Fort Ord on a priority list for cleanup. Later that year, the EPA, the Army and state regulators approved an agreement establishing procedures for a remedial cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known at the Superfund law. Two groups — Fort Ord Toxics Projects and CalPIRG — and two citizens sued the state and federal governments. The plaintiffs argued that the state violated CEQA by failing to prepare an environmental impact report prior to allowing the Army to deviate from state prohibitions against land disposal of hazardous materials. The Army moved its portion of the lawsuit to federal court, where the Army invoked a provision in CERCLA that bar's lawsuits (§113(h), 42 U.S.C. §9613(h)). The district court granted the Army's motion to dismiss the case. On appeal, environmentalists made three arguments against the dismissal, and one of the three stuck. They contended that the §113(h) preclusion of lawsuits applies to cleanups authorized by one section of CERCLA, but not to cleanups authorized by a different section. The three-judge panel of the Ninth Circuit reluctantly agreed. The appellate panel reversed the decision by District Judge Ronald Whyte and returned the lawsuit to the district court for further proceedings. Environmentalists successfully argued that §113(h) only precludes lawsuits against short-term cleanups of immediate hazards. Those cleanups are classified as removal actions and are carried out under §104. However, at Fort Ord, the Army acted under §120, which sets special standards for remedial cleanups at federal facilities. Section 120 actions are not covered by the §113(h) preclusion. "CERCLA distinguishes between two types of cleanups: removal actions and remedial actions. … emoval actions are temporary measures taken to protect against the threat of an immediate release of hazardous substances into the environment, whereas remedial actions are intended as permanent solutions," Ninth Circuit Judge Charles Wiggins wrote in the unanimous opinion. The language in CERCLA makes clear distinctions, although the court wondered why Congress would differentiate. "But we are not concerned with the wisdom of Congress' policy choice, and we lack the luxury to entertain the subjective intentions of various legislators," Wiggins wrote. "Our job is to effectuate Congressional intent as expressed in the statutory text. Thus, despite any misgivings we may have, we adopt this distinction between removal and remedial actions at federal facilities because the statutory language seems to require it." Cadart, the CalPIRG lawyer, said Congress intentionally provided for citizen oversight of remedial action. Otherwise, there would be no watchdog of the federal government, which has authority to plan, carry out and inspect cleanups. Removal actions, he said, are typically smaller, immediate cleanups of toxic sites on private lands. He agreed that federal law bars citizen lawsuits of removal actions. CalPIRG earlier sued the Army over cleanup of unexploded munitions buried at Fort Ord. Last November, the nonprofit organization dropped that suit when the Army agreed that CERCLA required cleanup of the unexploded bombs, mortars and grenades before the Army transferred the property. The Case: Fort Ord Toxics Project v. California Environmental Protection Agency, No. 98-16160, 99 C.D.O.S. 7259, 1999 Daily Journal D.A.R. 9321, filed September 2, 1999 The Lawyers: For Fort Ord Toxics Project: Charles Cadart, (617) 422-0880. For the Army: Elizabeth Ann Peterson, U.S. Department of Justice, Washington D.C.

Silicon Valley's job boom has underscored gaps in the transit systems in the San Francisco Bay Area, and has renewed calls to extend BART, the costly regional transit system that was once supposed to ring San Francisco Bay. But while construction continues on a $1.5 billion extension of BART from northern San Mateo County to San Francisco International Airport, other plans to extend BART have received mixed receptions. A ballot initiative to extend BART south of the airport through San Mateo County surfaced and then was quickly pulled by supporters. And San Jose Mayor Ron Gonzales has recently said that he'd like to extend BART on the other side of the bay from Alameda County to his city. But funding for the estimated $3 billion extension is uncertain. BART currently runs from northern San Mateo County, through San Francisco and into Alameda and Contra Costa Counties. The extension to the airport is to be completed in December 2001, adding four new stations and bringing it 8.7 miles farther south into San Mateo County. The airport extension will include a connection in Millbrae with Caltrain, a train service that extends along the San Francisco Peninsula from San Francisco to Gilroy. Caltrain supporters, who have pushed to see their train system electrified at a cost of $376 million, are often critical of the billions spent on BART. The San Mateo County BART extension proposed for the March 2000 ballot would have run down the middle of Highway 101, a heavily congested north-south artery. Many of the Caltrain stations are already located a few blocks from Highway 101 in the same area, and they are being rebuilt and expanded. The San Mateo County proposal would have raised the sales tax by a half-cent. To extend BART 15 miles south from Millbrae to Menlo Park was estimated to cost between $1.5 billion and $2.5 billion. The measure was pulled after several members of BART's board of directors announced their opposition. A recent report by the Silicon Valley Manufacturing Group said that Silicon Valley already has worse freeway congestion than New York City when measured in time spent waiting in traffic. Plus, five million square feet of new office space is expected to be built in the region during the next five years, bringing about 15,000 more cars to already congested freeways and roads. But BART is not the only option for Bay Area commuters as traffic in the booming San Jose area has worsened. Other systems include: o Caltrain, which travels up and down the San Francisco Peninsula. o Light rail in Santa Clara County, which connects with Caltrain in San Jose. The light rail system will also connect with Caltrain in Mountain View when a new 7.1 mile leg of the system opens in December. The new leg, which brings the total light rail system to 28 miles, was built at a cost of $327 million. o Altamont Commuter Express trains, which run between Stockton and San Jose. This service has proven popular in its first year of operation. o Amtrak, which runs trains between Oakland and San Jose three times a day and has plans to increase its operation. o A new $90 million rail service approved by South Bay voters to run between San Jose and Union City's BART station in Alameda County. That service should begin within two or three years. BART, which started carrying passengers in 1972, has spent considerable money during the 1990s to upgrade its aging cars and stations, as well for seismic retrofits. Service has been extended to outlying regions in Contra Costa and Alameda County as well. The system currently has 95 miles of track and carries an average of 299,000 daily riders, accounting for about 8% or 9% of all Bay Area commuters. BART officials have also had a difficult time securing all the money for its expansion to the airport. The state legislature's failure to place a transportation bond on the next state ballot also hurt efforts to expand the system further. But many political observers expect transportation funding to be a top issue when the legislature reconvenes in January. BART was originally conceived as a regional transit system in the 1950s. But San Mateo County supervisors voted 3-2 against joining the system in the 1960s, and Marin County also dropped out. San Mateo County later changed its tune and had to spend $200 million to buy its way into BART when it joined in the 1980s. Buy-in costs for Santa Clara County have not been determined, but figures between $500 million and $1 billion have been suggested. "BART is the best Bay Area wide system right now," San Mateo County Supervisor Mike Nevin said. Nevin said that Caltrain's daily ridership of 27,000 riders a day is smaller than the total number of daily users at BART's Daly City station. If BART extends south, he said, "you can't afford not to use it." The BART airport connection will have departures every 15 minutes during peak hours. BART rides to downtown San Francisco will take about 30 minutes. (A people mover will carry passengers once they are at the airport.) The airport extension is expected to eliminate 10,000 car trips per day and boost BART ridership by 70,000 passengers a day. The airport connection is expensive, and project costs continue to grow. Originally, the extension was estimated to cost $1.1 billion; now the cost has jumped to $1.483 billion. The federal government pledged to pay $750 million of that cost in 1997, but Nevin said "they've shorted us several million dollars over the past several years." He blamed the lowered appropriations on a Republican Congress. "It's still a crisis in Washington to get the funding," he said. Funding for the airport extension comes from a variety of sources besides the feds: $26.5 million from the Metropolitan Transportation Commission, $171 million from Samtrans (San Mateo County's transit agency), $152 million from the state, $200 million from the airport, $143.7 million from BART itself, and $40 million in bond money. The BART airport connection will not be the first in the U.S. for a rapid transit system. Washington, D.C.'s Metro system takes passengers to Reagan National Airport while Chicago's trains carry passengers into O'Hare International Airport. BART spokesman Mike Healy said that even though BART tracks are not much more expensive than light rail lines, right-of-way acquisition costs and subways construction escalates the total cost of BART projects. The airport extension is almost entirely a subway because local communities demanded it, he said. Contacts: Supervisor Mike Nevin, (650) 363-4653. BART Spokesman Mike Healy, (510) 464-6000. Peninsula Rail 2000, a Caltrain support group, www.rail2000.org

Voters in Eureka have handed a setback to the Bentonville, Arkansas-based denizens of gray big boxes. In a late August election, Eureka voters rejected rezoning to allow a Wal-Mart near the waterfront. The election polarized the city, but officials pledged that economic development efforts would continue with or without Wal-Mart. The loss in the Humboldt County seat was a rare defeat for Wal-Mart — but probably not surprising considering that it occurred in an independent-minded North Coast town of 28,000 people just south of Humboldt State University. "Eureka is unique," voter Laura Reneau told the Associated Press. "Why put something as common as Wal-Mart on our coastline?" Another factor in the election was the number of empty retail stores in existing commercial districts — including about two dozen vacancies at the 11-year-old Bayshore Mall and more than a few vacant buildings downtown. Wal-Mart opponents said the big box would only increase vacancies. Wal-Mart proposed a store for 37 acres known as the Balloon Track, an abandoned railroad switching yard about 150 feet from the ocean. The city in 1997 amended its general plan to designate the property for general industrial uses, according to Kevin Hamblin, the city's community development director. The property, which Union Pacific still owns, is zoned for public utility use. In fall of 1998, the California Coastal Commission rejected Wal-Mart's proposal to designate the site for retail use. Bypassing the City Council, Wal-Mart then convinced local supporters to launch a petition drive to qualify a rezoning initiative for the Eureka ballot. What was a divisive issue in town only got worse during the campaign regarding Measure J, on which Wal-Mart spent more than $250,000, or nearly $20 per registered voter. Some Humboldt County supervisors came out against Wal-Mart's plan, and the Eureka City Council eventually voted 3-1 for a resolution against Wal-Mart. Mayor Nancy Fleming, a Wal-Mart proponent, became a lightening rod in town. An aggressive telemarketing campaign by Wal-Mart backfired and ended with Wal-Mart reportedly firing the telemarketing firm. In the late-August special election that had a 47 percent voter turnout, 61 percent of voters rejected Measure J. It may have been the first such electoral defeat in California for Wal-Mart, said Al Norman, a Massachusetts activist who recently wrote the book Slam-Dunking Wal-Mart — Hometown America Fights Back. Wal-Mart narrowly won a similar election in the Sonoma County city of Windsor two years ago, said Norman, who advised opponents in both Windsor and Eureka. "What was unusual about Eureka was that this vote was done at the insistence of Wal-Mart," Norman said. Also setting Eureka apart was Wal-Mart's inability to convince local elected and civic leaders, who are usually Wal-Mart's biggest cheerleaders, he said. "There were a fair number of leaders who were willing to say this makes no sense." In fact, a committee appointed by the Board of Supervisors came to that conclusion about one month before the election. The Humboldt County Ad Hoc Committee on Big Box Development released a report that echoed many arguments of Wal-Mart detractors. The report said Wal-Mart would essentially suck sales and jobs from existing stores in the region. "A new big box retail store would have negative fiscal impacts on surrounding municipal entities, not increase jobs or the quality of jobs, significantly harm and potentially bankrupt existing businesses and reduce the overall quality of life throughout the county," the report stated. Outright defeats of big boxes are rare, and Wal-Mart representatives (who did not return calls from CP&DR) have not stated whether they are giving up on Eureka. Elsewhere, local opposition forced Home Depot to change sites in Santa Rosa and Santa Maria, but Home Depot eventually built stores in both towns, according to Norman. San Francisco residents and merchants continue to battle Home Depot. Activists in an unincorporated part of Auburn thus far have successfully fought off Home Depot, Wal-Mart and Target. Interestingly, Wal-Mart would not be Eureka's first big box. Costco has been in town since 1993, and Kmart opened there about a decade ago, Hamblin said. People have talked of using Eureka's Balloon Track for port-related industrial activity. However, a study found an abundance of coastal-dependent industrial property already available, and there are concerns about the extent of pollution at the old railroad yard, Hamblin said. Plus, Eureka's isolated location and poor transportation connections — one north-south freeway, railroad tracks susceptible to bad weather and slides — argue against a major port, he said. But Hamblin's boss, Eureka City Manager Harvey Rose contended Eureka's deep-water port is a major economic asset. The city is lobbying federal officials to receive a "foreign trade zone" designation, which would reduce or eliminate tariffs on raw materials imported to the zone. The city now has a cut-flower producer that receives bulbs from New Zealand and The Netherlands. Also, an ice cream manufacturer that makes products for many different labels imports dried milk solids from New Zealand, Rose said. City officials believe the foreign trade zone would boost those businesses and attract other manufacturers. The city also will host the second Eureka International Trade, Investment and Tourism Conference on October 22. Representatives of Mexico, South Korea and New Zealand are on the agenda. While Eureka suffers from a remote location, its port is one day closer to Japan than is Long Beach's port, California's busiest, Rose said. Furthermore, truck drivers face no traffic congestion on the North Coast, as they do when traveling to and from urban ports, he boasted. Rose said Wal-Mart would have increased Eureka's sales tax base, but the city will move on. "In economic development, you don't typically go out and recruit retail. You recruit industry, and retail comes along when the numbers are right," Rose said. National retailers evidently see the right numbers. Walgreens, Office Depot and Office Max are all coming to town, and Target is reportedly looking for sites. Contacts: Kevin Hamblin, Eureka Community Development Department, (707) 441-4160. Harvey Rose, Eureka city manager, (707) 441-4100. Al Norman, Sprawl-Busters, (413) 772-6289.

An initiative to prevent hotel and resort development on 60 acres of city-owned land in Sonoma passed with 77 percent of the vote during a Sept. 21 special election that attracted 59% of registered voters. A Mexican investor had proposed an upscale, 100-room resort for the hillside above Sonoma Plaza. Project opponents said they wanted to preserve open space and a scenic view.

I need to start this column with some personal disclosures: I have never shot fish in a barrel. I deny ever having stolen candy from a baby. (Actually, it depends on how you define "stolen.") And I have never rolled off a log, at least not as an adult. So, I don't really know how easy all these things are. But then again, none of them could be easier than finding the flaws in the City of Murrieta's plan to provide about $115 million in bond financing for the RogersDale theme park to be built in the Riverside County city. Promotional materials for RogersDale, which is inspired by the later cowboy star Roy Rogers and his wife Dale Evans, describe the park as "celebrating and reliving the American West of yesteryear" through the means of "entertainment, retail and educational venues, restaurants, specialty shops, cinemas, museums, authentic architecture, a Western Sidekick Walk of Fame and a non-denominational chapel." An 8,000-seat auditorium is the centerpiece of RogersDale. Heading the project team is retail developer Zev Buffman and Roy "Dusty" Rogers Jr., the son of Roy Rogers and operator of the family museum in Victorville. In June, the Murrieta City Council unanimously approved the issuance of about $115 million in Marks-Roos bonds for the project. (Local newspapers reported the amount at $104 million, but City Finance Director Teri Ferro said the amount would be higher.) The bond proceeds will help pay for most of the $170 million RogersDale U.S.A. Western-themed entertainment-and-retail extravaganza. The bond issuer is a joint-powers authority comprised of the City of Murrieta and the city's own redevelopment agency. (Never mind that these two different agencies are virtually the same: As in many California cities, the city council does double-duty as the redevelopment board.) Under the terms of the bond deal, the city would be obliged to start repaying the 30-year bonds in the third year. Assuming an interest rate of about 6 percent on $115 million, annual interest payments come to $6.9 million. According to one analysis, the project needs to attract 1.1 million visitors and generate $49 million annually to make its debt service and contribute an additional $6 million of anticipated sales tax revenues to the city. To accomplish this task, RogersDale promoters must sell at least 4,000 seats to more than 630 events a year. No, you're not getting a cold. Everybody feels a chill when they hear those numbers — everybody except the Murrieta city council, underwriters Solomon Smith Barney and Miller & Schroeder, and bond counsel Fulbright & Jaworski and Harper & Burns. By the way, John Harper, a name partner in Harper & Burns, is also the contract city attorney of Murrieta. Readers will recall that in 1996, William E. Gnass, then contract city attorney for the City of Waterford, was arrested by state authorities for allegedly failing to disclose that he was both disclosure counsel and bond counsel for the same city. In contrast, Mr. Harper's role is totally legal. Unlike Gnass, Harper has disclosed the fact that he is both the city attorney and the city's bond counsel. To Murrieta's credit, at least 2,500 people in town objected to this deal, or at least wanted to put the bond measure on the ballot. Although the opponents of RogersDale had gathered the legal number of signatures for a referendum, the City Council ignored them. In a maneuver that belongs in every future textbook on California government, the Murrieta City Council outfoxed referendum supporters by repealing the language of the financing plan that was the target of the referendum. With the offending language gone, the referendum had nothing to reject. Later the same night, the council, wearing the hats of the redevelopment agency board, adopted a new measure containing a strikingly similar financing plan. I suspect that the City Council will someday regret not being able to blame the decision to finance RogersDale on somebody else. The first flaw is the use of Marks-Roos bonds — yet again — to finance a questionable and highly speculative real estate project. These bonds, and the poorly conceived projects that they have funded, have led to near-insolvency for the cities of Wasco and Lake Elsinore. An even deeper flaw is the city's belief that a single project, such as a flashy theme park, can be the magic bullet to achieve economic-development goals. A healthy local economy is based on many companies in different lines of business, not on a single monolith that must sell 4,000 concert tickets 600 times a year to make money. A second flaw is whether or not Buffman and Rogers have the resources to market RogersDale successfully. Even non-experts like myself are aware that theme parks like Disneyland, Six Flags Magic Mountain, Knott's Berry Farm and Universal Studios spend tens of millions of dollars apiece to promote their attractions. These same theme parks also must spend heavily to create new rides and new attractions every year to keep the crowds coming back. I have not yet seen evidence that Buffman, a self- described Broadway producer and football team co-founder, has either the management expertise or financial depth to keep a very complex and very capital-intensive business afloat. If Buffman is rich, then why doesn't he get a conventional construction loan or line of credit? Why is he relying on a house of cards like a Marks-Roos bond issue? I'm not saying that RogersDale will be a certain failure. Heaven could take pity on Murrieta, and send an experienced theme-park operator to the city. Otherwise, it looks like almost certain disaster. Even in the colorful annals of Marks Roos, this is a notably unwise project. Indeed, this is the worst deal entered into by a California city since Oakland agreed to a $150 million subsidy to lure back the Raiders football franchise. It's easy to find fault with the public financing for RogersDale. The hard part will be for Murrieta to get out of the way once the monster starts to fall.

Local government won one round and lost one round in separate, recent decisions over taxes levied without voter approval. The City of La Habra defended its utility users' tax from a lawsuit that claimed the tax violated a Proposition 62 requirement of voter approval. However, the City of Los Angeles lost a case in which an annual assessment on apartment owners was ruled a violation of Proposition 218, which also mandates voter-approval. Both cases — which appear to set important precedents regarding local government finance mechanisms — could wind up at the California Supreme Court. In the La Habra case, the Fourth District Court of Appeals, Division Three, ruled that the statute of limitations had elapsed for challenging the utility users' tax. The decision conflicts with a 1997 decision in a utility tax case by a different division of the same appellate district. The court in McBrearty v. City of Brawley, 59 Cal.App.4th 1441, interpreted the statute of limitations differently. Because of these conflicting opinions, the Howard Jarvis Taxpayers Association (HJTA), which sued La Habra, plans an appeal to the state Supreme Court. Even La Habra's attorney expects the high court will grant a hearing. In December of 1992, the City of La Habra adopted an ordinance establishing a utility users' tax to raise revenue for the general fund. The measure became operational May 1, 1993, when tax collection commenced. At the time, two appellate decisions held that Proposition 62 was unconstitutional. (See City of Woodland v. Logan (1991) 230 Cal.App.3d 1058, and City of Westminster v. County of Orange (1988) 204 Cal.App.3d 623.) Proposition 62, approved in November 1986, prohibited local governments from imposing a general tax without a majority vote in an election. Relying on these opinions, the City of La Habra did not submit its utility users' tax to voters. However, in September 1995, the California Supreme Court upheld the constitutionality of Proposition 62 in Santa Clara County Local Transportation Authority v. Guardino, (1995) 11 Cal.4th 220. In that case, the Supreme Court invalidated a tax imposed without voter consent. In March of 1996, the Jarvis group filed a lawsuit against La Habra and Orange County. The city demurred, in part because of the three-year statute of limitations. Orange County Superior Court Judge Ronald Kline ruled for the city. On appeal, Jarvis appeared to have McBrearty on its side. The McBrearty court concluded that an exception to the three-year statute of limitations was warranted to prevent an injustice. Application of the three-year statute "would have required to bring a lawsuit challenging the validity of the tax at a time when the legal landscape suggested her only chance of success would be upon review of the issue by the California Supreme Court. Short of such a Herculean effort, the City could at no time have been compelled to conduct an election for the tax in question," the McBrearty court wrote. "This would essentially thwart the intent of the electorate in passing Proposition 62, despite the confirmation of the validity of the initiative provisions in Guardino." But the court in the La Habra case called the McBrearty opinion "flawed, as it gave little recognition to the long-standing Supreme Court authority which we are bound to follow." The State Supreme Court in Monroe v. Trustees of the California State Colleges (1971) 6 Cal.3d 399, concluded that "the mere existence of a contrary precedent" does not alter the statute of limitations. To rule otherwise would allow litigation every time a precedent changed. Thus, the three-year statute must be upheld. "It is absurd for HJTA to suggest it was forestalled or intimidated by the prevailing case law from filing its suit at the time the City passed its utility tax ordinance," wrote Orange County Superior Court Judge Tully Seymour, sitting on assignment to the appellate bench. "HJTA was in fact the real party in interest in Guardino, a case it pursued in the face of the contrary appellate court cases for the express purpose of having them overruled." The court also dismissed Jarvis's claim that the statute of limitations was renewed every time the city collected the tax. Timothy Bittle, the lawyer for Jarvis, and Richard D. Jones, the city's attorney, agreed the case is significant because so many other cities and counties have imposed similar taxes without voter approval. Bittle said his group has sued Sacramento County over a similar levy. "There are probably in excess of 50 or 60 cities that would be impacted, and there are six or seven cities and counties involved in active litigation," Jones said. Bittle vowed to seek a state Supreme Court hearing to resolve the conflicting opinions from the same appellate district. Added Jones, "I would anticipate, given that we have two totally different decisions, that they may accept it." The Los Angeles apartment fee opinion was more straightforward. The Second District Court of Appeals, Division One, ruled that an annual assessment on residential rental properties with at least two dwelling units was subject to Proposition 218, the 1996 Right to Vote on Taxes Act. In July of 1998, the City Council approved an apartment inspection program intended to combat slum housing. To fund the program, the council levied a $12 annual fee on each of the city's approximately 750,000 apartments. Apartment owners sued but lost at the trial court level. Los Angeles County Superior Court Judge Charles McCoy Jr. ruled that although the assessment of a service fee appeared to fall within the parameters of Proposition 218, it was not "imposed by virtue of ownership per se" because it was levied only against owners of rental units. But a unanimous three-judge appellate court panel overturned McCoy's decision. "There is nothing is Proposition 218 that exempts regulatory fees imposed on residential rental properties," Justice Miriam Vogel wrote. The city argued that "it's a regulatory fee based on engaging in a business that happens to occur on real property," explained Miguel Dager, deputy city attorney. The tax was not based on property ownership, and, therefore, was exempt from Proposition 218, the city contended. But Vogel quoted from the City Council's own findings in approving the fee, which stated the inspection program was in the public interest of the people of Los Angeles, not simply owners of rental units. "Quite plainly, Proposition 218 applies to any ‘fee' or ‘charge,' both of which are defined to mean ‘any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for property related service,'" Vogel wrote. "However well intentioned the City's program to abolish slum housing may be, we find it impossible to say that a fee imposed upon the owners of rental units so the City can locate and eradicate substandard housing is anything other than a user fee or charge for property related service." Trevor Grimm, attorney for the apartment owners, said Proposition 218 was designed to get at the items on a property tax bill under the assessed value line. The decision "could effect any other sort of fees charged to property owners by cities," he said. "It opens up a whole raft of challenges." In this case, the fee was based on property ownership and was not related to the number of inspections a property owner received, he said. Dager, the city's lawyer, could not think of another fee within Los Angeles that would be affected by the ruling. But, he said, the decision could impact future fee proposals. The city will seek review at the state Supreme Court, which has not yet decided a Proposition 218 case. The Cases: Howard Jarvis Taxpayers Association v. City of La Habra, No. G020573, 99 C.D.O.S. 7133, 1999 Daily Journal D.A.R. 9003, filed August 27, 1999. Apartment Association of Los Angeles County, Inc., v. City of Los Angeles, No. B130243, 99 C.D.O.S. 7038, Daily Journal D.A.R. 8951, filed August 26, 1999. The Lawyers: For Jarvis: Timothy Bittle, (916) 444-9950. For La Habra: Richard D. Jones, (714) 529-9402. For Apartment Association of L.A. County: Trevor Grimm, Grimm & Kaplanis, (213) 380-0303. For City of L.A.: Miguel A. Dager, deputy city attorney, (213) 847-0165.

Four months after making a sweeping proposal to re-orient the state's infrastructure investments around "smart growth" principles, State Treasurer Phil Angelides — a former "New Urbanist" developer -— is moving forward with at least three different proposals to change the selection criteria in state bond and tax credit financing programs. "It's a new way of thinking for the state and the public finance community," Angelides said. "But it's not irresponsible and it is creditworthy." Angelides has already changed the criteria for doling out the state's low-income housing tax credits, and he contended that the smart growth criteria he has added is now playing an important role in determining which low-income housing projects receive the tax credits. He is moving forward with similar changes in the state's mortgage revenue bonds for both single-family and multi-family projects, which are administered by the California Debt Limit Advisory Committee. Finally, Angelides has proposed a dramatic shift in the proposed criteria for doling out $475 million in funds newly allocated to the state infrastructure bank to reflect smart growth principles as well as traditional job creation priorities. The bank's oversight committee — which is controlled by Gov. Gray Davis, not by Angelides — is scheduled to consider the Angelides changes at a meeting in October. Angelides also said he hopes to propose legislation next year that will embed smart growth principles in the state's five-year Capital Outlay Program, mandated under a bill passed this year by the Legislature. "Smart growth" is defined by its advocates as a series of policies that encourages new development in existing communities, preservation of farmland and other open space, and the creation of more transit- and pedestrian-friendly neighborhoods and business districts. Not surprisingly, smart growth activists in the state are enthusiastic about Angelides' initiative. The state treasurer began his smart growth push in June, with the release of a proposed "smart investments" strategy in his office's annual debt affordability report. Angelides, a veteran Democratic Party activist, said he wants to seize on political leaders' and voters' recognition that the state needs to invest more money in infrastructure. "I give the Chamber of Commerce and the California Business Roundtable credit for raising the issue," he said. "But there was a hole in the discussion. I began to think that it wasn't just about how much money. It's about how we want to grow." Before winning election last year, Angelides was best-known as the developer of Laguna West in suburban Sacramento — the first New Urbanist development actually built on the West Coast. His June report represented a radical departure from the approach of past state treasurers. In releasing the legally mandated "debt affordability report" — a sober recitation of the state's current bonding capacity — Angelides retitled the report "Smart Investments" and added a high-profile section calling for a dramatic shift in the state's approach to public infrastructure investment. Among other things, he said state investments should move beyond "‘magic' budget percentages and project laundry lists investments support livable communities, sustainable development, and sound environmental practices." "Smart Investments" was short on specifics, but Angelides quickly began to use his powers as treasurer — most of which were created during the '70s and '80s while former Assembly Speaker Jesse Unruh's was treasurer — to move the idea forward. Angelides first revised the criteria used by the California Tax Credit Allocation Committee to select recipients for low-income housing tax credits. The competition for tax credits is highly competitive, with four applications for every project selected. Angelides' predecessor, Matt Fong, selected the winners by lottery. Angelides replaced that system with a lengthy set of criteria in which project density, linkages with mass transit, and child-care programs are taken into account. He claims that the winners — which were announced in late September — included many projects that scored high on these "sustainability" criteria. He is now moving forward to embed smart growth principles in the selection criteria for a variety of state loan programs administered by the California Debt Limit Allocation Committee, especially housing mortgage revenue bonds. But Angelides biggest immediate challenge appears to be to win over the governor's staff in order to incorporate smart growth principles into the funding criteria for the state infrastructure bank. Established several years ago, the bank never received any state appropriations until the 1998-99 fiscal year, when it got $50 million. In the ‘99-2000 budget, however, Gov. Gray Davis and the Legislature gave the bank an additional $425 million — thus increasing the significance of its selection criteria. The bank was created partly to give a financial incentive to local governments to follow the state's own growth management priorities. However, when the criteria were first drafted in April — mostly by staff holdovers from the Wilson Administration — they reflected conventional economic development and public finance priorities. The most important criteria were job creation, leveraging of private funds, and whether the project was ready to proceed. Angelides, however, has proposed a dramatic revision in which environmental protection, land use, and efficient use of infrastructure would be the most significant measurement. Job creation and leveraging would be only half as important as under the staff proposal, while readiness would have no significance at all. (See chart.) It is hard to say whether Davis — who is always cautious and often mysterious — will embrace the Angelides proposal. The treasurer said he has "spoken briefly" to the governor. Smart growth advocate Steve Sanders of the California Futures Network said he has met with Finance Director Tim Gage and Trade & Commerce Secretary Lon Hatamiya to promote the infrastructure bank revisions and received positive feedback. Angelides has also pitched his "smart growth" ideas to Davis's infrastructure commission, which is co-chaired by Lt. Gov. Cruz Bustamante and Business, Transportation, and Housing Secretary Maria Contreras-Sweet. However, in its interim report, issued in August, the infrastructure commission did not specifically embrace "smart growth" principles. Indeed, in its proposed recommendations for bond criteria, the infrastructure commission proposed placing priority on need, impact on public health and safety, economic impact, and — the only item linked to Angelides agenda — impact on quality of life. The infrastructure commission's transportation subcommittee called for investment in multi-modal transportation systems and a high-speed rail network but did not specifically call out "smart growth" ideas. Two other parts of Angelides' proposal will have to wait until next year. The first is his idea to have the state's Capital Outlay Program support infrastructure projects only if they have been vetted through a regional planning process. Angelides has been discussing this topic with, among others, Assemblyman Tom Torlakson, D-Antioch, one of the Legislature's leading advocates of local governance reform. The second is a proposed ballot initiative that would eliminate the two-thirds voter approval requirement for local general obligation bond issues and allow for simple majority voter approval. Angelides has committed himself to raising $5 million in campaign funds for that initiative.

A lawsuit challenging the San Joaquin County Local Agency Formation Commission's approval of a large annexation has been reinstated by the California Supreme Court. The state's high court overturned a decision by the Third District Court of Appeals against the Sierra Club and the San Joaquin Valley Farm Bureau. The appellate court ruled that the environmentalists and farmers did not exhaust their administrative remedies because they had not requested a LAFCO rehearing. Thus, under the "Alexander rule," they did not have standing to sue, the court ruled. At the same time, two of the three justices on the appellate panel urged repeal of the 56-year-old Alexander rule. A unanimous state Supreme Court did just that, calling the Alexander rule unnecessary and often-overlooked. The controversy in this case started in 1996, when the San Joaquin LAFCO approved annexation of an island in the Sacramento-San Joaquin Delta to the City of Lathrop, about 10 miles south of Stockton. In certifying the EIR, LAFCO adopted a statement of overriding considerations. Califia Development Group sought annexation to accommodate the proposed Gold Rush City — a 5,800-acre project that includes two theme parks, nine "themed villages," a golf course, and a shopping district. The Lathrop City Council adopted both a specific plan and an EIR in February 1996 and annexed the land later that year. The project is nearly as big as the existing city. Project proponents contend Gold Rush City will attract up to 8 million visitors annually and create 15,000 to 20,000 new jobs in San Joaquin County. The Sierra Club, local farm bureau and others sued LAFCO. They alleged that substantial evidence to support the overriding considerations was lacking, and that LAFCO failed to follow statutory provisions for the annexation. The trial court granted a motion to dismiss because the project opponents had not sought a rehearing before LAFCO. An appellate court affirmed the decision based on the Alexander rule. The Alexander rule emerged from a personnel case in which two fired state employees sought a court hearing, rather than a rehearing before the State Personnel Board. The California Supreme Court ruled that where a rehearing is permitted under law, it is a necessary step in exhausting administrative remedies. Alexander v. State Personnel Bd. (1943) 22 Cal.2d 198. Writing for the unanimous court, Justice Kathryn Werdegar said the Alexander rule "serves little practical purpose and is inconsistent with procedure in parallel contexts." In cases where circumstances have not changed and there is neither new evidence nor new legal arguments, the requirement to seek rehearing is a waste of time, the court said. "The likelihood that an administrative body will reverse itself when presented with only the same facts and repetitive legal arguments is small. Indeed, no court would do so if presented with such a motion for reconsideration, since such filing is expressly barred by statute," Werdegar wrote. Furthermore, although the Legislature has never specifically repealed the Alexander rule, its continued applicability was unclear to many people, the court said. Some legal practice guides say the Alexander rule is no longer good law, or the mandate to seek rehearing is no longer commonly applied. " ven an alert legal practitioner could overlook the necessity of seeking rehearing as a condition of judicial review …," Werdegar wrote. The court rejected the LAFCO's argument that recent action by the state Legislature affirmed the Alexander rule. The court said there is not enough evidence to determine legislative approval, or disapproval, of the Alexander rule. "As best we can surmise, the considered public policy judgement of the Legislature is that the exhaustion of administrative remedies doctrine is adequately safeguarded by the requirement that the administrative proceedings must be completed before the right to judicial review arises," Werdegar wrote. Still, in cases where there is new evidence, changed circumstances or new legal arguments, parties should seek a re-hearing. Parties also should seek a new hearing to note "errors or omissions of fact or law in the administrative decision itself," the court ruled. The Case: Sierra Club v. San Joaquin Local Agency Formation Commission, No. S072212, 99 C.D.O.S. 6719, Daily Journal D.A.R. 8553, filed August 19, 1999. The Lawyers: For Sierra Club: Susan Brandt-Hawley, Brandt-Hawley & Zoia, (707) 938-3908. For LAFCO and Califia Development: Steven Herum and Thomas Terpstra, Herum, Crabtree, Dyer Zolezzi & Terpstra, (209) 472-7700.

Although Democrats took control of state government this year for the first time since the early 1980s, the legislative session did not produce a batch of liberal bills. In fact, with regards to land use, environmental regulation and local government finance, the session may have been most remarkable for what lawmakers did not do. The Legislature approved no major changes to the California Environmental Quality Act. Transportation and affordable housing bonds died. Proposals to reduce the voting requirement from two-thirds to majority for local transportation-related sales tax measures and local school bonds also failed to advance. However, the Legislature did place on the March 2000 ballot a $2.1 billion parks bond, a $2 billion water resources bond, and a$350 million library bond. Lawmakers also strengthened affordable housing laws, approved a measure intended to prevent local governments from competing for major retailers, and closed a loophole in Marks-Roos bond financing rules. Gov. Davis has until Oct. 10 to decide on the bills. Local Land Use Two of September's most interesting bills reduced local land use control, but one of them received a quick Davis veto. The governor rejected a last-minute measure to prevent cities and counties from approving big-box stores with grocery and pharmacy departments. He had not taken action on another bill that moved control of a large, unincorporated island from the City of Redlands to developer-friendly San Bernardino County. Wal-Mart and its big-box brethren were targets of legislators' gut-and-amend tactics. AB 84 by Assemblyman Brett Granlund (R-Yucaipa) originally addressed political committees. But only three days before the Legislature's September 10 deadline, Assembly Speaker Antonio Villaraigosa and Assemblyman Richard Floyd (D-Wilmington) removed the original text and inserted new language. As amended, the measure prohibits cities and counties from approving a retail store of more than 100,000 square feet that has more than 15% of floor space dedicated to nontaxable merchandise. The bill supposedly gives relief to local agencies that must provide expensive public safety and roads to such stores, prevents big box retailers from pitting communities against one another, and discourages development on the urban fringe. But the measure is aimed clearly at Wal-Marts with grocery sections, Sam's Club, and Costco. Those stores typically are larger than 100,000 square feet and have substantial portions dedicated to food and drugs, which are nontaxable. Organized labor and several large grocers, including Safeway, Ralph's and Stater Bros., backed the measure. Big boxes' employees are often nonunion, while most supermarket jobs are union. Traditional supermarkets have struggled to compete with the all-in-one discounters. (See also Local Watch, page 2.) Floyd told the Los Angeles Times that warehouse stores should be contained "before these bastards take over the whole country." In his veto message Davis conceded that "the fiscal arrangement between state and local governments" encourages cities and counties to choose retail development over manufacturing and housing. "But," Davis said, "matters largely involving local land-use and zoning decisions should not be preempted by the Legislature and Governor without thoughtful deliberation." The Redlands measure, AB 1553 by Thomas Calderon (D-Montebello), would preempt a local land-use and zoning decision. (See CP&DR Local Watch, November 1998; CP&DR Legal Digest, November 1997.) Majestic Realty, headed by influential developer Ed Roski Jr., wants to build a shopping mall and other retail outlets on a 1,200-acre unincorporated island known as "the doughnut hole." Under state law, Redlands, which wants to annex the territory, has the final say because the property lies within the city's sphere of influence. However, Redlands earlier tried to make a deal with a different developer, and Majestic has resisted annexation. The bill requires the San Bernardino Local Agency Formation Commission to remove the doughnut hole from Redlands' sphere of influence, and allows a county service area to provide water and sewer, even though Redlands has facilities nearby. This bill is not the Legislature's first foray into local LAFCO decision-making, as lawmakers have made several attempts this decade to adjust spheres of influence and special district boundaries. A Senate analysis stated, "AB 1553 invites the Legislature to intervene in a specific land use squabble, as if it were some Super-LAFCO." Bonds The largest bond measure to qualify for the next state ballot was Villaraigosa's AB 18, a $2.1 billion parks proposal, and Davis signed the bill. Villaraigosa's measure focuses on urban parks, with $826 million earmarked for local parks, zoos, playgrounds, trails and ball fields. The $1.97 billion water bond, AB 1584 by Assembly Mike Machado (D-Linden), contains money for a large mixture of programs, including aquifer storage, flood protection, watershed protection, water system repairs, conservation and river cleanup. The bond earmarks no funding for new reservoirs, although the measure's supporters say all the programs combined equal one moderate-sized dam. Senate President Pro Tempore John Burton's transportation bond package did not make the ballot. Burton initially proposed four $4 billion bonds spread over six years. He later condensed SB 3 to one $8 billion bond. The measure, which needed a two-thirds vote in both houses, passed the Senate 32-8, but Republicans blocked it in the Assembly. They argued for a pay-as-you-go approach. Lawmakers might revive a transportation bond when they reconvene in January. Housing Although housing bonds failed, SB 948 by Senator Richard Alarcon (D-Los Angeles) amends various state regulations, including the housing element law. Among other things, the measure: broadens the anti-NIMBY law by tightening the findings a city or county must make to deny an affordable housing project; lengthens rent-control provisions; requires local agencies to decide on an affordable housing project within 90 days of EIR certification; allows lawsuits challenging housing element adequacy at any time — not just shortly after adoption — so long as the local jurisdiction receives 60 days to correct deficiencies; clarifies density bonus requirements. Farmworker housing is the subject of AB 1505 by Assemblywoman Denise Ducheny (D-San Diego). The measure requires local general plans to identify adequate sites with public services for housing agricultural employees. The law also allows development of farmworker housing on Williamson Act parcels of no more than 5 acres, within certain requirements. Local Government Finance Lawmakers approved a small package of relief bills along with the budget in June. But a proposal to phase out the property tax shift from cities and counties to schools (ACA 17) became a two-year bill. A bill to eliminate competition among cities and counties for sales tax-producers did pass and received Davis's signature. AB 178 by Assemblyman Tom Torlakson (D-Antioch), prohibits local governments from offering incentives — such as tax rebates, discount real estate and low-interest loans — to a big box retailer relocating within a 25-mile radius, or to an auto dealer within 40-miles. Local governments may offer incentives only if the "winning" city or county agrees to share sales tax revenue with the "losing" jurisdiction. AB 1511 by Dean Florez (D-Shafter) closes a loophole that allows local agencies to issue Marks-Roos bonds for projects outside their jurisdiction. The measure prohibits a joint powers authority that includes a mutual water company from issuing the bonds. Florez pursued the bill after the cities of Waterford and San Joaquin created a JPA with a developer's water company for the purpose of issuing bonds for a San Bernardino County subdivision. Williamson Act Several bills made adjustments to the Williamson Act. AB 1480 limits mining on Williamson Act property and alters procedures for swapping Williamson Act land for conservation easements. SB 985 prohibits the building of artificial lakes created as subdivision amenities or as waterskiing facilities on Williamson Act land. The bill also forbids land swaps for property under the Super Williamson Act. AB47 guides Williamson Act cancellation fees to the Agricultural Land Stewardship Program Fund, rather than the state's general fund. Other Legislation o AB 1630 appropriates $320,000 to the Los Angeles LAFCO to study the feasibility of detaching San Pedro, Wilmington and Harbor City from the City of Los Angeles. o AB 1473 requires the governor, beginning in 2002, to submit annually a five-year capital improvement program and proposed funding sources. o AB 1555 expedites island annexations — except certain large islands, gated communities, Laguna Beach's Emerald Bay, and Redlands' doughnut hole. o AB 597 requires Caltrans to develop flexible highway design standards. The measure is aimed at highways that also serve as city streets. o SB 47 reenacts and modifies the state Superfund law. The measure establishes a mechanism for state cleanup funding, but provides no money, and it requires the state to pursue many responsible parties, not only those with deep pockets. o AB 497 lets the attorney general enforce violations of the Community Redevelopment Law. o SB 807 lets LAFCOs approve water service by cities and special districts outside their jurisdictions in response to threats to public health or safety. o SB 216 creates the San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy to acquire and manage public lands. o SB 754 creates the Los Angeles River Conservation and Restoration Commission to prepare a conservation and restoration plan. o AB 1229 broadens the California Farmland Conservancy Program.