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At Disney's new Anaheim theme park, designers are banking on a proven formula. Create facsimiles of real places, stir them together into a brick-and-mortar masala amid the aging sprawl of suburban north Orange County, and voila: another millions-of-visitors-a-year attraction. However contrived, Disney was the first to prove that people will pay good money to visit a place that mimics the real thing. But in another corner of the state, the City of Napa is banking on a different concept. It combines river restoration with urban revitalization. It piggy-backs on a broader effort to restore the Napa River watershed and provide flood protection — capitalizing on the opportunity to retrofit central district neighborhoods. In counterpoint to Disney's project, Napa is banking on visitor interest in real natural and urban attractions. So far, informal reports suggest that Disney's bean counters might need to start worrying. The gradually emerging critiques of the California Adventure theme park are lukewarm at best. And early reports indicate that visitor numbers are dramatically lower than expected. Disney has responded by ramping up advertising to generate more interest. Meanwhile, Napa officials are licking their chops. After all, their project has a lot going for it: recession-proof growth in the wine industry for which the City of Napa finally is emerging as a true business center; increased desire by Bay Area and Sacramento dwellers to get away on weekend trips; and the general rise in tourist interest in real places as destinations worthy of spending leisure time. Napa's project is not without precedent. Waterfront-oriented tourist projects are nothing new, and every large city on the West Coast has been, or is currently, involved in some urban design scheme that purports to return the waterfront to the community. In hindsight, the circa-1960s Ports O' Call development on the LA harbor front of San Pedro was a ground-breaking example of converting an area traditionally used for heavy industry into a tourist gathering place. Since then, the concept has been continually refined. San Francisco has converted much of the Embarcadero into a grand linear park/playground/promenade. Recently crowned with the Giant's PacBell Park, it is the most comprehensive example of the power of the waterfront as an urban gathering place. Rivers too, are increasingly seen as urban design opportunities. Early examples of riverfront remodels focused on park and greenway functions. Sacramento's American River Parkway and Riverside's Santa Ana Regional Park are both 1960s-era examples of reclaimed riparian places. More recently, West Sacramento built a minor league ballpark to anchor its Sacramento River urban retrofit (see CP&DR Local Watch, March 1999). But Napa's project has to be viewed as the state-of-the-art example of convergence of many planning goals in one project. It also benefits nicely from trends in tourism and urban culture. In a way, the project is at a confluence of two planning tributaries. One is the broader Napa River Watershed restoration project. Initiated in 1996 by the county flood control district, the project involves a host of state, federal, and local agencies. It received a huge financial boost when Napa County voters assessed themselves to the tune of $170 million to fund the valley-wide effort (see CP&DR, May 1998). Under the guise of flood protection and habitat restoration, the project aims to restore the river to as close to a natural system as possible while still providing reasonable flood protection. That is a lofty goal in the heart of the intensive wine-grape industry. The second tributary was the City's own revitalization efforts. After stumbling for decades, the redevelopment of downtown Napa finally found its focus with the river restoration project. It's own Napa Urban Waterfront Restoration Plan calls for fishing piers, boat docks, habitat restoration, and numerous access points. When coupled with other downtown tourist projects, such as the Robert Mondavi-funded American Center for Wine Food and the Arts that is scheduled to open this fall, an Opera House renovation and numerous additional historic restoration projects, the City finally has a good chance of drawing into downtown a large share of the 5 million annual wine country visitors. The divergent strategies of Napa and Disney for attracting a growing leisure consumer dollar make an interesting point about contemporary culture. In the Disney case, celebrating real places within a ticket booth-controlled park adheres to the truism that tourists prefer a safe haven from reality. In the Napa case, officials are betting on another viewpoint: That by celebrating the reality of the local history, economy, and natural features through restoration and enhancement, economic rewards will follow. If I were a betting man, I'd place my money on Napa. Stephen Svete, AICP, is president of Rincon Consultants, Inc., a Ventura-based consulting firm.

CEQA AB 271 (Canciamilla). Exempts from CEQA review infill developments of up to 5 acres within an urbanized, unincorporated area. AB 1086 (Calderon). Requires a lead agency to adopt a negative declaration for infill residential projects in an urbanized area of an incorporated city of at least 100,000 people, provided the project meets certain requirements. AB 1365 (Ashburn). States that agencies that transport or dispose of sewage sludge outside their boundaries are the lead agencies for purposes of CEQA. Some Central Valley counties have blocked land application of sewage sludge imported from Southern California, setting off a flurry of CEQA-related legal activity. SB 439 (Monteith). Requires consideration of a project's effects on homeownership, employment and educational opportunities. SB 1087 (Alarcon). Allows cities and counties to consider regional environmental benefits in an environmental study in order to facilitate infill development. SB 1141 (Poochigian). Repeals an existing exemption that allows the attorney general to file a CEQA suit without raising the grounds for the suit during the administrative process. Attorney General Bill Lockyer has filed several CEQA suits regarding proposed dairies in Poochigian's district. Also: AB 1283 (Florez) allows agencies to submit dairy EIRs to the attorney general's office for review, and establishes a rebuttable presumption of the EIR's legal validity if the attorney general finds the that the document complies with CEQA. Construction Defects AB 267 (Steinberg) and SB 355 (Escutia). Both bills overturn the state Supreme Court's recent decision in Aas v. Superior Court (see CP&DR Legal Digest January 2001). The court ruled that homeowners cannot sue builders for construction defects until the damages manifest themselves. AB 1010 (Dutra). Calls for creation of alternative means to solving construction defect claims. Also, AB 600 (Dutra) creates a voluntary home warranty program. Housing AB 8 (Cedillo). Increases the amount of per-unit assistance available under HCD's Downtown Rebound Program. AB 369 (Dutra). Strengthens the anti-NIMBY law regarding affordable housing development. AB 381 (Papan). Requires an undefined percentage of the Jobs-Housing Balance Improvement Account be used as incentives to local governments, transit providers, private developers and lenders for housing construction within one-quarter mile of an existing or planned transit station. AB 490 (Diaz). Creates a program to make matching grants to local agencies that establish affordable housing trust funds. AB 905 (Cohn). Provides forgivable home loans of up to $7,500 to public safety employees in Los Angeles, San Diego, San Francisco, San Jose and Long Beach. AB 1170 (Firebaugh). Creates a new program, and provides $100 million, for down payment assistance for homebuyers in cities and counties that have "removed barriers" toward developing affordable housing. AB 1359 (Lowenthal) requires the California Housing Finance Administration to establish a down payment assistance program to help people buying new homes in high-density areas near transit stations. AB 1436 (Correa). Requires all existing housing on closed military bases to be preserved and maintained as affordable housing. AB 1611 (Keeley). Creates a $250 million program to fund construction of student housing near University of California and California State University campuses. Also AB 1063 (Aroner) authorizes the state Public Works Board to finance student, faculty and staff housing for public colleges. AB 1284 (Lowenthal). Authorizes a locality with a serious jobs-housing imbalance to create a "housing opportunity district," from which the local government receives a larger portion of the property tax increment. AB 1606 (Bates). Grants a city two units of credit toward meeting its regional housing need for every one unit of housing on a decommissioned military base that is converted to low-income housing. SB 372 (Dunn). Creates a revolving loan fund to preserve affordability of Section 8 units that will lose their federal subsidies during the next five years. Funds would be made available to entities that purchase the units and agree to new affordability covenants. SB 503 (Vasconcellos). Requires Santa Clara and San Diego counties to establish "attainable housing zones" near major transportation corridors. Development of homes within those zones that cost 75% of the county average would be eligible for infrastructure grants. SB 784 (Torlakson). Allows local jurisdictions to use Jobs-Housing Balance Program funds for any purpose. SB 1098 (Alarcon). Requires a city or county to make findings of significant health and safety concerns before imposing a multi-family housing construction moratorium. Gov. Davis vetoed a similar bill last year. Housing Elements/General Plans AB 858 (Wiggins). Expressly requires an opportunity for public involvement during the preparation and amendment of general plan elements. AB 924 (Wayne). Requires the Office of Planning and Research to implement a pilot program in which local governments would receive grants or loans to develop general plan elements with "smart growth principles." AB 932 (McPherson). Extends the deadline for housing element revisions in the Fresno, Kern, Monterey and Sacramento regions by six months to December 31, 2002. AB 938 (Daucher). Establishes an HCD program to provide grants to localities that, in turn, assist people who buy or rent homes near their job sites. AB 1367 (Wiggins). Mandates that general plans designate adequate sites for new schools. The bill also limits the ability of school districts to override local zoning. AB 1514 (Canciamilla). Requires land use elements to contain 20-year urban growth boundaries that are consistent with the State Comprehensive Plan. Jurisdictions that comply by July 1, 2002 would get priority for Infrastructure Bank funding. SB 213 (Perata). Requires the Metropolitan Transportation Commission and the Association of Bay Area Governments to evaluate whether their member cities and counties are implementing their fair share of housing starts and participating in regional congestion reduction plans. SB 520 (Chesbro). Requires housing elements to identify adequate sites for homes for disabled people. SB 714 (McClintock). Requires local jurisdictions to zone sufficient land for 20 years of projected housing needs. Also requires the Department of Housing and Community Development and councils to government to identify 20-year housing needs. SB 910 (Dunn). Creates the legal presumption that a housing element rejected by HCD is invalid. Requires courts to fine non-complying jurisdictions up to $1,000 per unit of total projected housing identified in the Regional Housing Needs Assessment. Also allows the state to withhold other undefined funds. Money AB 52 (Wiggins). The Farmland Protection and Infill Housing Bond. No amount yet. AB 73 (Lowenthal). Creates a $30 million tax credit for donations to community development corporations. AB 404 (Diaz). Creates a $200 million grant program for local infrastructure serving multi-family infill developments of at least 100 acres. AB 1526 (Florez). Farmworker Housing and Family Wellness Bond Act. $250 million. SB 73 (Dunn). Increases low-income housing tax credit by $20 million to $70 million. SB 423 (Torlakson). Returns ERAF dollars to jurisdictions that have valid housing elements, have "livable communities" principles in their general plans, increase building permit over the previous year, and do not provide incentives to retailers. Natural Resources AB 104 (Nation). Adds $1 to $4 to vehicle registration fees in the Bay Area to fund open space purchases, improve water quality and restore wetlands. AB 597 (Aanestad). Exempts from the Forest Practices Act the cutting of trees to reduce the threat of wildfire. AB 1256 (Harman). Appropriates an unspecified amount to help purchase the Bolsa Chica mesa in Huntington Beach, the site of a decades-long development fight. AB 1414 (Dickerson). Prohibits the Department of Fish and Game and the Resources Agency from acquiring additional land for ecosystem restoration or habitat preservation until those agencies complete management plans for all properties they already own. AB 1540 (Strickland). Requires two-thirds voter approval for a city or county to designate or dedicate open space or related easements. SB 221 (Kuehl). Prohibits approval of a subdivision map or development agreement for more than 200 units unless the local government finds that sufficient water is available. Similar to a bill that failed last year. Also, SB 610 (Costa) closes loopholes in the existing process for determining adequate water supplies for new housing. SB 984 (Costa). Establishes the Grazing Land Conservation Program Fund. Redevelopment AB 166 (Cedillo). Provides a 25% income tax credit for rehabilitation of certified historic structures in redevelopment areas. AB 212 (Correa). Requires the City of Tustin to give at least 100 acres of the former Tustin Marine Corps base to the Santa Ana Unified and Rancho Santiago Community College school districts. Tustin has offered the schools about 20 acres. A similar bill died last year. AB 237 (Papan). Makes a number of changes to the eminent domain process, including a requirement that compensation for a business's loss of goodwill be included in a public agency's final offer. AB 247 (Maddox). Prohibits use of eminent domain to acquire tax-exempt property used for religious purposes. The bill is in response to a conflict between the City of Cypress and the Cottonwood Christian Center over the future of a prime, 18-acre site owned by the church, which wants to build a sanctuary, school and conference center. The city wants to see retail development on the site. AB 368 (Cedillo). Authorizes redevelopment agencies to use Mello-Roos financing for capital facilities. AB 406 (Diaz). Increases the redevelopment agency set aside for housing from 20% to 25%. AB 637 (Lowenthal). Extends for two years (until January 2004) the requirement that redevelopment agencies replace low- and moderate-income housing units that are removed from the market by a redevelopment project. AB 750 (Cedillo). Requires redevelopment agencies to fund replacement units when affordability guarantees expire on agency-assisted, owner-occupied units. AB 1567 (Runner). Allows a redevelopment agency to meet inclusionary housing requirements by purchasing long-term affordability covenants on mobilehomes. AB 1653 (Pacheco). Loosens the standards for creation of a redevelopment area. The bill specifically overturns the definition of "true blight" adopted in Riverside v. City of Murrieta, (1998) 65 Cal.App.4th 616 (see CP&DR Legal Digest, August 1998). SB 211 (Torlakson) and SB 1137 (Ortiz). Both extend the life spans of redevelopment projects. SB 411 (Perata). Allows the City of Oakland to extend the life of its Central District Urban Renewal Plan. SB 600 (Torlakson). States that lack of housing and commercial development at specific densities within a one-quarter mile of a transit station constitutes "blight" for the purpose of establishing a redevelopment area, if the intent is to develop a transit village. Others AB 545 (Steinberg). Requires the state, when siting office space, to consider mixed-use sites and proximity to affordable housing. AB 640 (Jackson). Modifies the way the Coastal Commission reviews certified Local Coastal Plans. AB 680 (Steinberg). Encourages a regional approach to planning in the Sacramento area. AB 857 (Wiggins). Requires OPR to complete by June 30, 2003 a "State Comprehensive Plan" that articulates a 20-year vision. The OPR would complete this plan in lieu of updating the State Environmental Goals and Policies Report, which is nearly 20 years out of date. AB 1114 (Pescetti). Establishes incentives for cleaning up and redeveloping brownfields, and establishes liability and insurance limits. SB 660 (Hayes). Requires the Technology, Trade and Commerce Agency to designate 25 "California Renewal Communities" to be linked with various government and private funding sources.

A Public Policy Institute of California survey of Central Valley residents found strong opinions regarding urban growth and the environment. When asked to name the most important issue facing the 18-county region, 15% of residents said population growth, tying for first place with electricity. In third place was the economy (13%), but the next four issues in descending order were water quality and availability, air pollution, loss of farmland, and traffic and transportation. All of those issues rated ahead of schools, crime and drugs in the survey, which PPIC and the Great Valley Center released in March. At least 75% of respondents said they support proposals to protect farmland and wetlands, expand public transit, and build freeways. Interestingly, 56% said they favor a regional growth plan rather than letting each city and county decide. "Problems associated with growth and development create big worries today and cloud an otherwise rosy view of what's ahead," said PPIC Statewide Survey Director Mark Baldassare. The economy provided a point of contrast within the region. Residents in the North Valley (from Sutter County to Shasta County) were four times as likely to rank the lack of well-paying jobs as an issue than Sacramento-area residents, who cited traffic congestion as a major concern. The survey is available at www.ppic.org Only a week before PPIC and the Great Valley Center released their survey, the Minnesota-based Metropolitan Area Research Corporation and the Great Valley Center released a report on social and development trends in the Valley. The study identified rising social disparity and inefficient growth patterns as key issues. The report, written by MARC's Myron Orfield, lists three factors preventing the region from addressing these issues: the concentration of poverty in core urban areas and outlying rural communities; a "highly fragmented system of local finance and economic development;" and the lack of structure for regional leadership. "We can choose to address the existing disparities and invest in strong central cities with good schools, or we can continue to treat our communities like they are disposable," said Great Valley Center President Carol Whiteside. The report is available at www.greatvalley.org The Rail Cycle saga in San Bernardino County appeared to conclude when the developer of a proposed garbage dump reached a settlement with a neighboring landowner who opposed the project. In March, Waste Management announced it would pay $6 million and give 7,000 acres to Cadiz, Inc. in exchange for Cadiz dropping state and federal lawsuits. Rail Cycle was a giant dump proposed by Waste Management for the desert east of Barstow. (see CP&DR, November 2000, October 2000, November 1999, March 1999). The project fell apart, but in October of 1998, the county grand jury indicted Waste Management and five employees for a variety of white-collar crimes. Prosecutors contended Rail Cycle proponents tried to ruin Cadiz Inc. All criminal charges were dropped or expunged late last year, and Waste Management agreed to pay the county $7.7 million in fines and restitution. Cadiz had filed civil suits regarding the adequacy of the dump's EIR and claiming Waste Management officials tried to manipulate the price of Cadiz stock. Cadiz owns 27,000 acres in the desert, from which it hopes to pump groundwater for sale to the Metropolitan Water District. Cadiz officials expressed satisfaction with the March settlement, while Waste Management attorney John Newell told the Los Angeles Times the settlement "is really for us just a cost justification." The downtown Los Angeles site of a controversial proposed industrial development has been optioned to an environmental group and could become a park. Developer Majestic Realty has offered 32 acres of the "Cornfield" to the Trust for Public Land, which agreed to accept the property while state funding is lined up for the purchase. Majestic had proposed an industrial project that won the endorsement of Mayor Richard Riordan and was approved by the city's Central Area Planning Commission last year (see CP&DR Economic Development, September 2000, January 2000). But Friends of the Los Angeles River sued on behalf of environmental and neighborhood groups, alleging inadequate environmental review. They groups say the area needs parks and community facilities more than warehouse jobs. The opponents' case received a boost when the federal Department of Housing and Urban Development announced it would withhold a $12 million subsidy for cleanup of the site until the city completed a more thorough environmental analysis. The site is an abandoned rail yard where corn once grew. Closure of the deal requires the park coalition to come up with $30 million by November 30. Proponents hope to get funding earmarked in the state budget and from Proposition 12 park bonds. Temecula city officials have blocked from the ballot a referendum regarding the Wolf Creek development, a 2,022-home project that the City Council approved on a 3-2 vote in February (see CP&DR Local Watch, February 2001). Project opponents needed only 16 days to gather what appeared to be more than enough signatures to qualify a referendum. But City Attorney Peter Thorson said the referendum was invalid because its backers did not show petition signers the entire Wolf Creek development plan. Litigation now appears likely. The San Jose City Council in March approved a plan to redevelop six neighborhood shopping center scattered around town. The city plans to spend about $5 million on landscaping, streets and building upgrades at the shopping centers to generate tax increment for poor neighborhoods. However, the project threatens to bring to a head the long-simmering feud between the city and Santa Clara County, which has suggested the city uses redevelopment simply to divert tax revenues. The U.S. Fish and Wildlife Service finalized its designation of "critical habitat" for the threatened red-legged frog in March. The designation covers 4.1 million acres in 28 counties, down from 5.4 million acres the agency proposed last year (see CP&DR Environment Watch, December 2000). Environmentalists generally were pleased with the decision, but development and farming interests were outraged. They said the designation — and the additional reviews it sets off — will needlessly slow projects. The Transportation Committee of the Southern California Association of Governments has voted against the City of Los Angeles's expansion plans for the Los Angeles International Airport. The committee said the growth of air traffic should be spread among airports in the region. The vote was a major victory for cities near LAX that oppose expansion, and for proponents of a new airport at the closed El Toro Marine Corps base in Orange County. Voting members of SCAG are scheduled to resume consideration of the air transportation plan this month. Correction. A brief in January's edition improperly characterized a lawsuit settlement between the Sonoma County Housing Advocacy Group and the county. The county must adopt a valid housing element by August, but whether more land will need to be rezoned for multi-family residential development is unknown. The county has some land zoned for multi-family projects, and the judge's order in the case does not state that more is needed. Also, the 2,500 units mentioned in the story referred to the county's share of very low- and low-income housing units allocated to it during the latest regional housing needs determination.

Birdwatchers can legitimately state a claim of injury and therefore have standing to sue the Navy under the National Environmental Policy Act over the destruction of bird habitat on the former site of the Long Beach Naval Station, the U.S. Ninth Circuit Court of Appeals has ruled. However, the court also held that the birdwatchers do not have standing to sue as California taxpayers. Among other things, the court ruled that the birds themselves need not have been harmed by the Navy's action so long as the birdwatchers' activity of watching the birds had been disrupted. A group of individuals from Long Beach and Lakewood sued Long Beach and the Navy. The individuals challenged the environmental impact statement for the reuse plan of the Long Beach Naval Station after the based was closed in 1994. The EIS evaluated four alternatives: a marine container terminal, an auto terminal, an institutional campus, and a "no project" alternative. Birdwatchers and other alleged that the EIS was inadequate, charging that the city and the Navy had pre-determined that a marine container terminal should be built and leased to the Chinese Overseas Shipping Company. They were opposed to the reuse plan because it called for the demolition of World War II-era buildings designed by early African-American architect Paul Williams, as well as the dredging of 26 acres of shallow water habitat used by two federally endangered species, the California least tern and the California brown pelican. In addition, a large ornamental ficus tree had rookeries used by the black-crowned night heron, which is protected by the Migratory Bird Act of 1918 and had been classified as a "California special animal" by the state Department of Fish & Game. In addition to the NEPA lawsuit, the birdwatchers sued as California taxpayers, charging that the City of Long Beach had violated the state tidelands trust and that the proposed use was a waste of public assets and a public gift that violated the California constitution. In the summer and fall of 1998, the birdwatchers unsuccessfully sought a temporary restraining order in federal court in Los Angeles, and a motion for a preliminary injunction. In late 1998 and early 1999, the structures, the ficus, and the habitat were destroyed as part of the reuse project. During the appeal, Long Beach and the Navy argued that the litigation was moot because all the resources in question had been destroyed. But a three-judge panel of the Ninth Circuit disagreed with that argument, noting that "the burden of demonstrating mootness is a heavy one." " f required to undertake additional environmental review, the defendants could consider alternatives to the current reuse plan, and develop ways to mitigate the damage to the birds' habitat by, for example, creating new nesting and foraging areas on the land that was formerly the station or utilizing other nearby land for mitigation purposes," the court added. The Navy also contended that the birdwatchers did not have standing to file the lawsuit regarding the EIS because they had not suffered injuries that could be redressed by court action. But the Ninth Circuit ruled in favor of the birdwatchers, concluding that they had been injured because their birdwatching activity had been impeded. "The birdwatchers' averments that they had visited the affected area in the past and that the defendant's challenged activity would impede their ability to appreciate and the use the specified area are sufficient to establish that they have suffered an injury to a concrete and particularized interest," the court wrote. In addition, the court rejected the Navy's argument that the birdwatchers did not have standing because, in pursuit of their birdwatching activity, they did not have the legal right to trespass on the grounds of the closed station or to stand adjacent to the station and gaze over the property line to observe the birds in their habitat. The court did not address the trespass question, but the judges overturned the trial court in ruling in favor of the birdwatchers on the second point. "If an area can be observed and enjoyed from adjacent land, plaintiffs need not physically enter the affected area to establish an injury in fact," the court held. The court also ruled that, even though the habitat had been destroyed, the legal test of "redressability" had also been met. (An injured party must also prove that the injury is redressable in order to have standing to sue.) " ecause they are seeking to enforce a procedural right under NEPA to protect their concrete interests," the court wrote, "they have standing to challenge the adequacy of the Navy's FEIS even though they cannot establish that a revised EIS would result in a different reuse plan for the Naval Station." The Ninth Circuit ruled against the birdwatchers' contention that they had standing to sue as California taxpayers.. The court said the birdwatchers had not established the connection between "the taxpayer, the tax dollars, and the allegedly illegal government activity" that is required under federal case law. The Case: Cantrell v. City of Long Beach, No. 98-56940, 01 C.D.O.S. 1018, 2001 Daily Journal D.A.R. 1351 (issued February 5, 2001). The Lawyers: For Cantrell: Richard I. Fine, (310) 277-5833. For City of Long Beach: Dominic T. Holzhaus, city attorney's office, (310) 570-2212, and M. Katherine Jenson, Rutan & Tucker, (714) 641-5100. For U.S. Navy: John K. Rubiner and Eliot Krieger, U.S. Attorney's Office, Los Angeles, (213) 894-2434.

A few lines tucked into the 1993 federal budget bill funding the Department of Interior granted the agency $150,000 to launch a "scientific review of the remaining old-growth in the national forests of the Sierra Nevada in California, and for a study of the entire Sierra Nevada ecosystem by an independent panel of scientists." That deceptively modest directive gave birth to a mammoth undertaking. Three years later, after work by a team of 18 experts — who called upon contributions from 19 "special consultants" and 107 additional researchers — what became known as the Sierra Nevada Ecosystem Project (SNEP) issued its monumental final report: More than 3,000 pages of text, charts and diagrams. It pulled together much of what was known to science about the Sierra, a sprawling region encompassing 21 million acres and most or all of 18 counties. In January, an echo of that 1993 congressional directive rumbled across the California landscape, unleashing a revolution in management of the forests that blanket the Sierra. Immediately controversial, the new rules governing 11 national forests draw inspiration from the SNEP report's conclusions and recommendations, as well as from a host of other recent initiatives, most notably those undertaken to protect the spotted owl. The new rules, issued by Southwest Regional Forester Brad Powell, represent a significant departure from historic management practices and also constitute one of the rare instances where scientific research appears to have trumped politics in the formulation of public policy. Assuming implementation likewise avoids political derailment — this is far from certain, given the Bush administration's antipathy toward policies that favor ecological values over resource extraction — the repercussions will be felt for years. The revolution bears a bland bureaucratic title: The Sierra Nevada Forest Plan Amendment. Released January 12, along with an environmental impact statement, it comprises an update to the land and resource management plans for the Modoc, Lassen, Plumas, Tahoe, El Dorado, Stanislaus, Sierra, Inyo, Sequoia and Humboldt-Toiyabe national forests, as well as the Lake Tahoe Basin Management Unit. Together, these forests encompass 11.5 million acres. The new regulations reflect the growing recognition that national forests provide more than timber and livestock forage — that other forest products, such as water, wildlife and recreational opportunities, now constitute their primary public and economic benefits. The rules also recognize the role traditional logging and fire-suppression policies have played in the growing fire danger in the Sierra, as well as the increased risk to human life and property created by urban incursion into the foothills forest belt. The rules establish a network of "old forest areas" encompassing more than 4 million acres, where prescribed fire and limited mechanical thinning will be used to maintain natural conditions and maintain suitable habitat for old-growth dependent species such as the spotted owl and northern goshawk, as well as fishers and martens (both members of the weasel family). In areas closest to human communities, limited logging will be encouraged to remove the thick buildup of brush and small-diameter trees that has turned the "urban-wildland interface" into a fuel-rich tinderbox. Riparian conservation areas will be established near streams, meadows and lakes. In these areas, additional restrictions will be imposed on grazing and logging to protect the habitat of imperiled aquatic species such as frogs, toads and fish, as well as the willow flycatcher, which breeds and nests in riparian vegetation, and the great gray owl, which hunts for prey in undisturbed meadows. Under the plan, nowhere in Sierra national forests will live conifers more than 30 inches in diameter be cut. On the east side of the range, all conifers larger than 24 inches will be protected. In addition, hardwoods (such as oak) will be off-limits to the saw if they are more than 12 inches in diameter on the west slope and 8 inches on the east. The plan estimates that 191 million board feet of timber will be available for harvest in each of the next five years, dropping to 108 million board feet annually for the subsequent five years. That compares with an average of 200 million board feet each of the past three years, and an average of 300 million board feet annually over the past decade. The peak year for logging on federal lands in the Sierra was 1988, when 1 billion board feet was cut. In addition, the removal of undergrowth and small trees to reduce fuel loads near inhabited areas is estimated to produce 35% more wood chips annually during the next 10 years for burning in energy-generating biomass plants. Cautiously endorsed by environmental groups, the plan was denounced immediately by timber industry representatives and lawmakers from logging-dependent communities. Republican members of Congress urged President Bush to derail the plan, which California Forestry Association President David Bischel called "disastrous." The regulations have followed a tortuous route. The process began in 1992 when the USFS responded to accusations it was doing too little to protect the habitat of the California spotted owl. The agency imposed temporary curbs on logging and began work on a comprehensive management plan. The first version of that plan was withdrawn just before release in 1996 because it conflicted with the data in the SNEP report, and a subsequent draft was rejected in 1997 by the Clinton administration because it allowed excessive logging. Work on the current plan began in June 1998; it involved dozens of public meetings and drew comments from 47,000 people. The Bush administration could easily suspend the plan. New Agriculture Secretary Ann Veneman, who oversees the Forest Service, criticized earlier drafts of the plan while she was an attorney representing the Sierra Nevada Access, Multiple Use and Stewardship Coalition, a consortium of groups opposed to Clinton forest policies. Veneman has pledged to recuse herself from decisions involving the Sierra forest plan, but it is unclear who might act in her stead. Such a suspension could, however, backfire. Last October, three environmental groups sued the USFS, seeking to suspend logging in the Sierra and southern Cascades to protect the California spotted owl and the fisher. The agency in December imposed a three-month moratorium on timber sales throughout the region while it prepared a response. The new rules for Sierra forests represent the agency's effort to protect those increasingly rare creatures and settle the litigation. Suspending the regulations could put the lawsuit — and the future of Sierra logging — in the hands of a judge. That scenario ought to sound familiar and unappealing to the timber industry and its allies. It is what happened in the Pacific Northwest a decade ago when nearly all public-lands logging was halted by the courts to protect the northern spotted owl. Contacts: California Forestry Association: (916) 444-6592. U.S. Forest Service, Southwest Region: 707-562-9004. Sierra Nevada Forest Plan Amendment: http://www.r5.fs.fed.us/sncf . Sierra Nevada Ecosystem Project: http://ceres.ca.gov/snep .

A public agency that loses an inverse condemnation case must pay all reasonable legal costs that the property owner incurred, even if there is a second round of litigation, the Second District Court of Appeal has ruled. The decision came in a case in which the Hawaiian Gardens Redevelopment Agency delayed payment of litigation expenses and then refused to pay later costs incurred by the owners of an automobile dealership. In 1993, the city's Redevelopment Agency purchased the site on which Mary and Dave Downen operated Lakewood Suzuki. The following year, the city served the Downens with a 90-day notice to vacate the property. The Downens could not find a suitable new location and were forced to liquidate the business. In September 1994, the Downens filed an inverse condemnation lawsuit seeking compensation for the loss of their leasehold interest in the property and damage to their business. Two years later, the sides settled the case by stipulation, with the city agreeing to pay $650,000, plus interest, and litigation expenses. A trial court entered judgment in January 1997, and the agency deposited with the court or paid the Downens $776,000. However, the parties disagreed on the amount of litigation expenses. Two months later, the trial court awarded the Downens $414,000, an amount added to the earlier judgment. However, the city neither paid the balance of the judgment nor appealed the ruling. Instead, it asked the court to allow installment payments, a request the court denied. The Downens then sought payment for additional legal expenses, and the court awarded them another $47,000. Again, the city did not appeal the decision or pay up. So the Downens filed a petition for writ of mandate seeking to enforce the unpaid portion of the judgment. Los Angeles Superior Court Judge David Yaffe granted the petition and entered a new judgment in December 1998. Downens then sought another $84,000 in attorney fees and $2,100 in costs. But at the city's request, Yaffe refused to award the latest attorneys fees and most of the costs because he could find no statutory authority. The Downens appealed and a three-judge panel of the Second District, Division Six, reversed the lower court and awarded the Downens the last $86,000, too. The Downens cited Code of Civil Procedure § 1036, which states that a public entity that loses an inverse condemnation case shall pay reasonable costs and expenses "incurred because of that proceeding in the trial court or in any appellate proceeding in which the plaintiff prevails on any issue in that proceeding." The appellate court read that section broadly. "The purpose of the statutory scheme is clear — ‘to prevent property owners from being forced to bear the cost of expensive litigation in order to protect their property interests against unreasonable government conduct,'" Justice Arthur Gilbert wrote, citing Tilem v. City of Los Angeles, (1983) 142 Cal.App.3d 694, 710. "Here the public agency's actions necessitated the filing of a separate proceeding to enforce the unpaid inverse condemnation judgment. By construing § 1036 to permit plaintiffs to recover their litigation expenses, we implement the Legislature's purpose." The Legislature has made clear that victorious property owners in an inverse condemnation proceeding must be made economically whole, the court ruled. "It would be anomalous to conclude the Legislature did not intend that inverse condemnees recover their litigation expenses when a public agency's conduct requires them to bring a proceeding to enforce the underlying inverse condemnation judgment," Gilbert wrote. The Case: Downen's Inc. v. City of Hawaiian Gardens Redevelopment Agency, No. B132012, 01 C.D.O.S. 880, filed January 30, 2001. The Lawyers: For Downen's: Michael Leifer, Palmieri, Tyler, Wiener, Wilhelm & Waldron, (949) 851-9400. For the city: John Cavanaugh, Woodruff, Spradlin & Smart, (714) 558-7000.

Cities on the Bay Area's Peninsula are moving ahead with restrictions on office development even though the market that spurred the enormous demand for offices appears to have turned. Explosive growth of technology and Internet-related companies on the San Francisco Peninsula created the need for office space. But during the last year, the market became so skewed that San Jose, San Francisco and several suburbs in between imposed regulations to protect the integrity of downtown districts and industrial areas from the dot-com office invasion. However, some market analysts say that the demand for dot-com office space in the Bay Area has already peaked. Although they still have concerns, some planners report the same trend. "My sense is the market has already cooled a little, and that has taken away some of the land use issues, but not all of the land use issues," said Mary Gallagher, chief of planning for the City of San Mateo. Those issues came to head in San Mateo during the summer of 2000, when a tech start-up called @themoment leased an empty 18,000-square-foot downtown storefront that had been a retail clothing shop. Although the storefront had set empty for months, merchants did not like the office conversion and feared a full-fledged dot-com move to downtown would price them out of the market. Neither yuppified nor forgotten, downtown San Mateo has remained a functioning district meeting a wide variety of residents' needs. The City Council responded by imposing a moratorium on office conversions in downtown and a neighboring retail district. The city also commissioned a study examining the office-versus-retail question, Gallagher said. That study is due back this month. The moratorium is scheduled to expire in mid-April but might have to be extended to give city officials time to write new land use controls, depending on what the consultant's study concludes, she said. The city had been getting many applications for conversion of retail and industrial space to offices, as well as applications to develop new office buildings, Gallagher said. The city allows offices in retail zoning districts only under exceptional circumstances. But the market was so strong that leasing agents and desperate businesses were pushing the ordinance's language beyond its intent, she said. "In the last month or two, some of the problems have gone away on their own," Gallagher added. "I've been particularly worried about conversions in our industrial areas because we have so little space for industrial uses." The impact on industrial uses is also concern a few miles south in San Carlos, Menlo Park and Redwood City. In 2000, San Carlos tightened its zoning ordinance for downtown to prohibit ground-floor office uses. Now, the city is updating its East Side Plan, which encompasses an area with many light industrial businesses. Traffic and parking demands from offices and the potential loss of light industry -- which has sustained San Carlos for decades -- are the primary concerns, said Planning Director Liz Cullinan. The city lacks a good definition of "research and development," Cullinan added. The R&D businesses that have moved into the city's industrial districts lately rely on computers in an office environment. "The zoning codes have not kept up with the times," she said. In Redwood City, both industrial areas and downtown are a concern. For more than 20 years, Redwood City has worked on improving its downtown retail climate with limited success. However, when dot-com offices began showing up in vacant storefronts, city officials adopted a moratorium on ground-floor conversions to office uses and on development of office buildings on certain parcels. The moratorium, adopted last September, applied to half of the city's commercial districts, including downtown. It quickly gave way to a six-month urgency ordinance scheduled to expire in April This month, the Redwood City City Council is expected to adopt general plan and zoning amendments for all commercial and industrial property. The amendments would prohibit most first-floor offices in the downtown shopping district, restrict the size and type of offices in neighborhood-serving retail centers, and limit office uses in industrial zones. The proposal also includes new parking standards for office development, and regulations to control new office buildings' mass and traffic impacts. "We are approaching the office issue not just from the retail standpoint, but from the loss of industrial sites and the loss of sites where we had planned housing," said Jill Ekas of the Redwood City planning department. The concerns about too many offices displacing other uses are not limited to the suburbs. At the urging of redevelopment officials, San Jose has imposed new restrictions on new ground-floor offices throughout the downtown so that retailers and restaurants do not get priced out of the market. In San Francisco, a slow-growth majority elected to the Board of Supervisors last December has signaled its intent to block office development in numerous working-class neighborhoods that are fighting gentrification. Whether all the office restrictions will even be needed as this year progresses is a question some people are asking. A fourth quarter analysis by Cushman & Wakefield, one of the area's largest leasing agents, pointed to a continued strong market. The company reported the average asking rental rate for offices on the Peninsula was $6.53 per square foot, per month – higher than both Silicon Valley and San Francisco proper. A total of 2.5 million square feet of office space was built on the Peninsula last year, Cushman & Wakefield reported. However, Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at University of California, Berkeley, said the dot-com tide is already receding. In a report released in January, Rosen concluded that a three-year gold rush peaked in late 2000 and that the office construction boom is ending. In San Francisco, where conversions and office development became a major election issue, leasing agents report the amount of available office space has tripled in only a few months, mostly because of the demise of dot-com businesses. Contacts: Mary Gallagher, San Mateo planning department, (650) Liz Cullinan, San Carlos community development department, (650) Jill Ekas, Redwood City planning department, (650) 780-7298. Kenneth Rosen, Fisher Center for Real Estate and Urban Economics, (510) 643-6105. Cushman & Wakefield website: www.cushmanwakefield.com

It seems natural, at first glance, that Long Beach would want to promote its waterfront as a resort destination. The city has miles of continuous oceanfront in a region that is starved for open views of the Pacific. Yet efforts to create a visitor-friendly waterfront have been a protracted agony of collapsed hopes and stalled-out development projects. Developer after developer has unfurled its grand plans for the waterfront, only to slink away years later after a failure to find financing. The latest setback occurred in February, when the Long Beach City Council granted an 18-month extension to DDR, a Chicago-based developer, which has succeeded the previous developer, Oliver McMillan. If not exactly jinxed, the Long Beach seacoast is not ideally set up to be a waterfront resort. Long Beach is essentially an industrial city. An enormous apron of earthworks extends into the city's waterfront, created as part of the Port of Long Beach, the nation's busiest harbor. The conundrum of creating an oceanfront idyll amid an industrial landscape is only one of the problems facing Long Beach. Another is finding a developer, or even a single attraction, that really works. Ten years ago, the city was buoyed by the possibility of Disney Sea, which The Walt Disney Company briefly contemplated before deciding to build its long-anticipated second gate in its home town, Anaheim. (Disney, which recently built an analogous sea-front attraction in Tokyo Bay, may not have wanted to battle the California Coastal Commission.) Since that time, the city redoubled its efforts to develop Queensway Bay, a long stretch of waterfront on either side of the mouth of the Los Angeles River. The city has completed the first phase of a far-reaching master plan that includes parking, a new aquarium, new pathways and a marina. The crowds are not yet swarming Queensway Bay, however. One problem is the collection of oddball attractions that the city has accumulated during the past two decades in the hopes of creating tourist traffic. If Broadway Danny Rose, the hard-luck Vaudeville booking agent in the Woody Allen movie, were a developer, Queensway Bay would be his project. The Queen Mary, a famous ocean liner, has been docked and rehabbed as a hotel. Next to the Queen Mary is an empty geodesic dome that formerly housed the Spruce Goose, the sole surviving prototype of a giant transport plane developed by Howard Hughes that was put into production; the Goose was sold a few years ago and now nests in McMinnville, Oregon. One promoter had tried to bring a Science Fiction Hall of Fame to a site opposite the Queen Mary, but those plans have been shelved. On the other side of the bay is the much-ballyhooed Long Beach Aquarium of the Pacific, which opened two years ago and has begun to hemorrhage money due to low attendance. The basic problems with Queensway Bay as it currently exists have more to do with what is lacking, however, rather than the inadequacies of what already exists. The existing attractions at Long Beach, though odd, might be more successful if the waterfront were more of a cohesive urban place — that is, a street. As things now stand, the bay's attractions are scattered over a large area, with little or no infill. Topography also presents problems: Downtown Long Beach sits on a bluff about 30 feet above the waterfront. Although it would be desirable for the downtown and the waterfront to flow into one another, the two areas seem destined to remain essentially separate parts of the city because the steep slope discourages walking between the two. Master planned by the Los Angeles office of Ehrenkrantz, Eckstut & Kuhn, the proposed expansion of Queensway Bay supplies some of the missing infill. The plan envisions new development along Pine Avenue, including a new multiplex cinema, which would strengthen the connection between the waterfront and downtown Long Beach. The plan also clusters new development on either side of Shoreline Drive, including giving this largely empty street an urbane, walkable character, at least for several blocks. On the opposite side of the bay, the plan provides a street-like collection of buildings opposite the Queen Mary (although the withdrawal of the Science Fiction Hall of Fame means that the arrangement of buildings shown in the illustration will likely change again). Clearly, it is a big job to fill in the long, empty stretches of Queensway Bay, and make them into something like streets. The question perhaps is why Long Beach is trying so hard to create an urban district out of its waterfront area, when it already has a pretty good urban district in its downtown. It is probably against the rules, when reviewing a master plan, to suggest that the project is not a good investment of more than $500 million of public money. Yet I cannot shake the idea that Long Beach is on the wrong track. If the goal is to bring in crowds of visitors, then Old Pasadena — a recycled urban district that Long Beach could easily mimic — should be the model, not Marina del Rey's chic harbor and entertainment district. If this property has such great potential, why aren't the big retailers lining up for space, and why aren't the lenders springing for it? Downtown Long Beach — not the waterfront — is the most appropriate place to create a regional destination because it has an excellent scale and wonderful buildings. Downtown is set up for crowds, while all the people-attracting buildings at Queensway Bay must be built anew, which seems speculative and risky. The repeated failure of experienced developers to get something started on the waterfront should be a clue that the area is a stretch for the real estate market. Long Beach has spent too much time and money on a destination plan, when it should have been adding a bit more investment to its downtown plan, which already exists and would work wonderfully as a backdrop for crowds and nighttime activity. To borrow the punch line from an old British joke, if you want crowds in Long Beach, start from somewhere else.

George Lucas' movie production company and the Presidio Trust are close to signing a lease that will allow Lucas to construct a large office complex inside the national park in San Francisco. Finalization of the lease this spring would be a major advancement in a process that has involved a great deal of planning, political maneuvering and bickering over protection of historical resources at one of San Francisco's most treasured sites. Lucasfilm plans to build 900,000-square-feet of offices and other workspace in an L-shaped campus, as well as a 1,500-space underground parking garage, near the Lombard Street entrance to the Presidio. An estimated 2,500 people would work at the digital moviemaking and technology center, which would replace the dilapidated and closed Letterman Army Medical Center complex. "I think the next big event will be the signing of the lease and the building coming down," said Ron Sonenshine, a spokesman for the Presidio Trust, the federal agency that oversees the 1,480-acre Presidio. Preliminary site work began early this year. In June 1999, the Presidio Trust selected Lucasfilm's Letterman Digital Arts Center development for the site of the old Army hospital. The development is intended to generate revenue so that the Presidio, which the military handed to the National Park Service in 1994, can become self-sufficient by 2013. Lucasfilm is expected to pay about $5 million annually to lease the site. Although 18 developers showed interest in the site, the competition came down to Lucas – the creator of "Star Wars" and "Indiana Jones" – and a development team headed by Walter Shorenstein, one of the Bay Area's most prominent developers and a confidante of San Francisco Mayor Willie Brown. Shorenstein/Interland Corp. proposed a New Urbanist-style, live-work project with 500,000 square feet of offices and retail shops, 450 housing units, a library and a museum. "We had to make a decision between two strong teams," Presidio Trust Executive Director James Meadows told the San Francisco Chronicle at the time. "But with its concentration on educational outreach, scientific research and cutting-edge technology, we felt that the Lucas plan more closely fit the goals of the Trust." A Lucasfilm spokeswoman declined to discuss the project because the lease is still pending. According to public documents, the moviemaker's proposal includes a museum that will use the company's high-tech expertise to explain the 200-year history of the Presidio, which was first established by Spanish explorers. The plan also calls for a "great lawn" with extensive landscaping and a view of the nearby Palace of Fine Arts. Since federal officials selected Lucasfilm nearly two years ago, the Trust has complete an environmental impact statement and adopted planning guidelines for the project. Neighbors and environmentalists have raised concerns about a development of this scale bringing too many people and vehicles to the Presidio. They say that the Congressional mandate for Presidio self-sufficiency has forced the Trust to move too quickly and to accept a large project that will detract from the national park. Some people also complained that the glitzy, multi-media company is not an appropriate tenant for the stately former military base, and others have criticized the Presidio Trust for selecting a project with no housing component. Much of the attention, however, has focused on historic preservation issues. "The building itself is not historical at all, but it is a part of an historical landmark district," the Trust's Sonenshine said. Last fall, the National Trust for Historic Preservation, the federal Advisory Council on Historic Preservation and the California State Historic Preservation Office lodged protests over the Digital Arts Center's original design. They said the proposed $250 million complex was too massive and contained too much glass. They said the proposed complex looked like any suburban office enclave and clashed with the historical landmark district in which it was to be located. Lucasfilm architects went back to work and have apparently satisfied most of the preservationists' concerns — but not all. In a January letter to the Presidio Trust, Jane Crisler of the Advisory Council on Historic Preservation endorsed the project. "The Council finds many elements of the proposed design, in particular the overall site plan and below grade parking proposal, to be an excellent response to challenges posed by the site," she wrote. However, she continued to question several aspects of the project, including its landscaping, the buildings' mass and scale, and the design of a dining pavilion. The buildings are designed around a landscape that is planned to include freestanding Greek columns, a lagoon, a stream and water stairs. Preservationists have disliked the concept from the outset, and Crisler contended it does not adhere to the adopted design guidelines. "The columns are designed as an instant ruin that conveys a false sense of the past, and designed aspects of the water features do not have a precedent at the Presidio. Together, these elements diminish the integrity of the Presidio National Historic Landmark District," she wrote. Steade Craigo, of the state Office of Historic Preservation, agreed that the project does not meet design guidelines and he said the planning process should not be considered complete. The Trust's Sonenshine said preservationists' concerns could result in design modifications. But, he said, they have not asked for anything that will delay the project. Contacts: Ron Sonenshine, Presidio Trust, (415) 561-5300. Steade Craigo, State Office of Historic Preservation, (916) 653-6624. Jane Crisler, Advisory Council on Historic Preservation, (303) 969-5110. Presidio Trust website: www.presidiotrust.gov

When voters in Tracy approved an annual "cap" on new housing construction last November, it was the first time since the late 1980s that a California municipality enacted this venerable — yet controversial — method of restricting growth. After grinding through 1,000 to 1,500 residential building permits annually for the last several years, the San Joaquin County commuter town will now have to restrict itself to 750 permits in any one year — and an annual average of 600. Until the passage of the Tracy housing cap, it seemed like the housing cap was a dying mechanism — a vestige of an earlier era of suburban growth, now limited mostly to older suburbs in coastal metropolitan areas like Sonoma, Ventura, and San Diego counties. After all, housing production has been off dramatically in California ever since the latest economic upturn began in about 1996. Thus, the caps had not really come into play. Most of the towns that have them are inner-ring suburbs that are now adding more jobs than housing. And the growth management tool of choice these days seems to be the growth boundary, not the growth cap — a decision to focus on geography, not quantity. Yet in the last couple of years, a number of cities have voted — either by initiative or council action — to renew their housing caps for another decade or two. These jurisdictions include Simi Valley and Camarillo in Ventura County, and several communities in San Luis Obispo County. At the same time, several cities have actually bumped up against the annual cap for the first time in many years. And the successful Tracy initiative suggests that the caps might move inland in certain parts of the state, especially in San Joaquin and Stanislaus counties, where Bay Area-style growth restrictions might reasonably be expected to follow Bay Area-style growth. All of this means that, whatever its limitations as a growth management mechanism, the housing cap has not gone away. Housing caps emerged in the Bay Area in the early 1970s, when burgeoning suburbs such as Petaluma found themselves in the same position that Tracy is in today — suddenly accessible to growing job centers (in Petaluma's case, because of the completion of Highway 101) and therefore attractive to starter-home developers. Indeed, Petaluma was the test case for housing caps in California; after imposing a restriction of 500 houses per year in the early 1970s, the city fought a long, hard — and, ultimately, successful — battle against the building industry to affirm the constitutionality of the restriction. (Construction Industry Association, Sonoma County, v. City of Petaluma, 522 F.2d 897 <9th cir 1975> .) Once the courts upheld the constitutionality of the housing cap, it quickly became popular — especially among growing suburbs in the Bay Area, in Ventura and San Diego counties, and in communities along the Central Coast. In Santa Cruz, Monterey, San Luis Obispo, and Santa Barbara counties, the mechanism was often a "population cap," but it was still implemented as a restriction on the construction of new housing units. By 1992, according to a report by UCLA researchers Madelyn Glickfeld and Ned Levine, about 60 cities and counties in California — more than 10% of all jurisdictions — had a limit on housing or population that restricted construction. Almost all of the caps were in coastal counties. Over time, the implementation of housing caps became a tool not simply to restrict the overall growth of a community, but also to increase the quality (and cost) of development as well. Once you restrict the number of houses that can be built, then you have to come up with an allocation process. Most communities chose to use what came to be known as a "beauty contest" — a competition in which developers often sought to outbid each other in offering up community benefits. Most jurisdictions have a laundry list of desired items; and while some of them involve basic community infrastructure (sewers, water, roads), many city councils and boards of supervisors also give high priority to upscale suburban amenities, such as parks and equestrian trails. As a result, some communities have successfully used the beauty contest to transform themselves into desirable, upper-middle-class suburbs with high home prices. But have they successfully used housing caps to restrict or manage growth in any kind of useful way? That is a tough one. There is no question that housing caps have given local politicians and local voters the illusion of control. In fact, however, from Petaluma's experience forward, housing caps have usually been set high, in response to a crisis. So, in most years and in most communities, the number of proposed housing units has not come close to the ceiling. In Petaluma, for example, the annual 500-unit cap set in the early 1970s seemed low compared to the 900 units that were coming through the pipeline at that time — but it was much higher than the historical 200 to 300 units per year the city had been getting. Similarly, Tracy's cap of 750 seems low compared to the 1,200-1,500 permits the city has processed in recent years. But it's worth noting that during the recession a few years ago, Tracy had imposed such high impact fees that most projects there did not pencil out and hardly anything was built. Indeed, research by planning professor John Landis of University of California, Berkeley, has found that virtually all cities with housing caps imposed them during the middle of a boom, and set them at such high levels that the city hardly ever hit them again. And when comparing overall residential growth, he found there was hardly any difference between communities with housing caps and those without. (In his analysis, he used "matched pairs" of similar communities, one of which had a cap and one of which did not — Upland and Redlands, for example, and Turlock and Lodi.) It did not really matter whether the builders were stopped at the ballot box in November or nickel-and-dimed before the planning commission every Tuesday night. The result was more or less the same. Ironically, a housing cap no longer seems to be a sure way to restrict a city's population any more — largely because household sizes are increasing throughout the state. For example, in Ventura County, Camarillo — which has had a housing cap for almost 20 years — recently renewed its ordinance. This led the local newspaper to extol the virtues of housing restrictions by comparing Camarillo to its blue-collar neighbor, Oxnard. In fact, however, Camarillo's population grew faster during the 1990s, even with the housing cap, than Oxnard's did without a cap (21% for Camarillo to 12% for Oxnard). Maybe this is why many suburbs with housing caps have gone one step further during the last few years and adopted urban growth boundaries. Housing caps may dampen demand in the occasional white-hot real estate market — not such a bad thing, actually — and they may encourage developers to build bigger houses in order to pay for all the amenities demanded by the local "beauty contests." But it's not clear whether they truly shape or manage growth. Of course, most cities in California really do have housing caps embedded in their general plans. It's called the "build-out" scenario, and it's a long-term restriction on growth, rather than a short-term restriction. Instead of holding a community to 500 units annually, the general plan build-out may impose a limit of 10,000 units over 20 years. This is probably a better way to handle things — allowing for a few ups and downs in the market and managing growth according to a more cohesive overall vision than simply requiring a few equestrian trails.

The California Supreme Court in February heard oral arguments in a California Environmental Quality Act case for the first time since 1997. But members of the court gave few indications of how they would rule in the case, which centers on the lack of an environmental review for a city-sponsored ballot measure. Justices peppered attorneys on either side of Friends of Sierra Madre v. City of Sierra Madre, No. S085088, with questions throughout the hour-long proceedings in Sacramento. Afterward, lawyers declined to speculate on how the court might rule. In late 1999, the Second District Court of Appeal threw out the results of a 1998 election in Sierra Madre because the city violated CEQA. Sierra Madre voters approved a city-sponsored ballot measure removing 29 homes from the city's Register of Historic Landmarks. The court found that the removal of the properties from the landmarks list required environmental review because of potential adverse impacts to historical resources. The city contended ballot measures were exempt from CEQA, but the court distinguished between measures voluntarily placed on the ballot by the City Council and ballot measures that qualify via voter petitions. The appellate court said that when a City Council places a city-sponsored measure before voters, the council is making a discretionary decision that is subject to environmental review. During oral arguments before the State Supreme Court, Donald Sobelman, the city's attorney, argued that CEQA and its Guidelines make no such distinction. "When the voters make the decision, CEQA does not apply," he told the justices. When Justice Ming Chin asked what authorized such an exemption, Sobelman cited Natural Resources Code § 21065, which addresses the definition of a project, and § 21080, which deals with CEQA exemptions. And several times, Sobelman pointed to the court's own decision in DeVita v. County of Napa, 9 Cal.4th 763. Justice Stanley Mosk's opinion in the landmark DeVita case said that ballot measures are not subject to CEQA review, Sobelman argued. "This is a matter of crucial importance to California cities. For more than 25 years they have relied upon the Guidelines to place initiatives before the voters," Sobelman said. Chief Justice Ronald George asked if the city placed the measure on the ballot to avoid preparing an environmental impact report. Sobelman said no. The delisting was not a project under CEQA, he said, because "the delisting does not remove environmental protections." Justice Joyce Kennard said the city was taking an inconsistent position. During earlier proceedings, the city did not dispute that delisting the properties was a project for CEQA purposes. Sobelman said that the city did not dispute that point at the trial level but did so in briefs before the high court because Friends of Sierra Madre raised the issued. He said there was no project because the City Council took no action and granted no entitlement. But Susan Brandt-Hawley, attorney for Friends, argued that delisting the properties was indeed a project under CEQA because it removed two protections in the City Code for historic properties. She cited the court's most recent CEQA decision in Mountain Lion Foundation v. Fish & Game Comm'n, 16 Cal.4th 105 (1997), in which the court ruled that removing protections for a species triggered an environmental review. Several justices' questions probed the practical differences between a city-sponsored ballot measure and a citizen initiative. Does not, asked Justice Janice Rogers Brown, the electoral process achieve the same end as CEQA, namely informing the public? Not in this case, responded Brandt-Hawley. Voters were not told of specific impacts to historical resources, she said. A bit later, she said that voters expect measures placed on the ballot by elected officials to have received some level of environmental review. Joining Brandt-Hawley before the high court was Deputy Attorney General Christine Sproul, while Attorney General Bill Lockyer watched from the audience. Sproul took issue with the city's "calculated strategy" to avoid CEQA. That charge drew an immediate question from Justice Kennard, who asked what evidence Sproul had. Sproul pointed to a city staff report and a City Council meeting transcript as proof that the city used the electoral process to avoid the costs of an environmental impact report. The appellate court had cited the same evidence in making its decision. But, asked Justice Kathryn Werdegar, what is wrong with saving money if it is allowed by law? Sproul said it is not allowed by law in this case. "The Legislature has been clear in applying CEQA to decision-makers," Sproul said. The law differentiates between decision-makers and voters. "They are taking an affirmative action to place the measure before voters," she said, later adding, "Should the court sanction the city's actions, we would have grave concerns." In a closing response, city attorney Sobelman dismissed the notion that properties removed from the Register of Historic Landmarks could be substantially altered without environmental review. The City Council placed the measure on the ballot "to avoid CEQA too early in the process," he argued. "No one in Sierra Madre thinks there will not be CEQA review before demolition," he added. After oral arguments, Sobelman said he believes the case is clear-cut: the Legislature has given citizens authority to decide such matters on their own. Attorney Michael Zischke, who has helped represent Sierra Madre during the litigation, said the case could set an important precedent for cities. A number of major projects have been approved by ballot measure, including baseball and football stadiums in San Francisco, Zischke said. But Brandt-Hawley said a city victory would set a dangerous precedent. "It would be inviting cities to dodge CEQA," she said. The state Supreme Court is expected to rule by early May.

The City of Hermosa Beach's "no-oil" initiative overrides the city's pre-existing contract with an oil company to permit oil drilling on a city-owned parcel of land, the Second District Court of Appeal has ruled. The initiative is not trumped by the contracts clause of the U.S. Constitution, and the oil company in question did not have a right to proceed in the face of the initiative, the court decided. Hermosa Beach voters originally banned all oil drilling in the city in 1932. However, in 1984, to generate funds needed to acquire parks and open space, the voters approved two propositions to create exemptions from the ban for two publicly owned sites, including one owned by the city known as the City Yard Site. In 1995, voters approved Proposition E, an initiative that repealed the two exemptions. In the meantime, however, the city had moved forward to contract with the Macpherson Oil Company, which had been a leading force in placing the 1984 ballot measures before the voters. In ruling for a coalition of environmental groups, the Second District, Division Two 2, concluded that Proposition E's ban on oil drilling in order to protect public safety — and, subsequently, the city's decision to terminate the contract based on the same grounds — was a proper exercise of the city's police powers and overrode Macpherson's argument that the initiative violated the company's constitutional right to carry out a contract executed with the city. The court also ruled that because Macpherson had borne only "soft" costs and not "hard" costs — and because the company had not acquired all of the necessary permits to begin drilling —- it had not obtained a vested right to move forward with the oil-drilling project. Between the passage of the ballot measures in 1984 and the initiative in 1995, the city entered into two contracts with Macpherson, one in 1986 and one in 1992. Under the terms of the lease, the city was required to give Macpherson the City Yard Site and obtain State Lands Commission approval for drilling in the tidelands. Macpherson was required to obtain all necessary permits, including a conditional use permit from the city and a coastal development permit from the Coastal Commission. After certifying an environmental impact report, the city approved a general plan amendment and zone change in 1990. Three years later, the city certified an addendum to the EIR and approved the conditional use permit. Environmental groups sued to challenge the EIR's adequacy and the CUP approval but eventually abandoned an appeal after losing in the trial court. The State Lands Commission originally approved the project in 1993. But, after environmentalists filed a lawsuit, the project returned to the commission, which approved it again in 1994. The Coastal Development Permit was approved in 1998, after being submitted two times and withdrawn once. In the meantime, the Hermosa Beach Stop Oil Coalition qualified an initiative to ban all oil drilling in the city. The initiative was approved by 56% of the voters in the November 1995 election. The initiative specifically repealed the 1984 exemptions to the city's oil-drilling ban, including the exemption regarding the City Yard Site. The ballot arguments focused mostly on the Macpherson proposal and the City Yard Site. Fearful of being sued for a contracts violation, the city continued to honor its lease with Macpherson after the passage of Proposition E. However, in 1997 the Stop Oil Coalition sued the city, seeking declaratory and injunctive relief to require the city to apply Proposition E to the Macpherson project. In 1998, Los Angeles County Superior Court Judge Kurt J. Lewin ruled in favor of the city and Macpherson, stating that while there was no question that Proposition E was intended to apply to the project, implementing it would be an unconstitutional impairment of the contract between the two parties. "The voters by initiative may repeal any law including the limited exceptions to the oil ban," Judge Lewis wrote. "They may not by legislative fiat extinguish a valid subsisting contract … without a demonstration that such total impairment of the contract is reasonable and justified because it is compelled by real threats to the health, safety, and welfare of the community." Prior to the trial judge's ruling, the city stopped performing under the terms of the contract based on a consultant's analysis that public safety could be endangered by the risk of an escaping methane gas cloud. Macpherson subsequently filed a cross-complaint against the city alleging that the methane gas risk had previously been assessed and accusing the city of breach of contract. On appeal, Stop Oil contended that Proposition E was intended to apply to the Macpherson project; that the initiative was a valid exercise of the police power that did not violate the contracts clause of the constitution; and that the contract between Macpherson and the city was authorized by the lease agreement itself. Macpherson contended that it had a vested right to move forward with the project. The three-judge appellate panel ruled in favor of Stop Oil on all counts. The court decided that Proposition E was clearly aimed at the Macpherson project, and concluded that the measure does not constitute a retroactive application of a law to a situation but, rather, applies only to future permits which Macpherson was required to obtain to move forward. As for vested rights, the court noted that Macpherson had not obtained all required governmental approvals, including the coastal development permit, at the time Proposition E passed. Also, because it had invested only in "soft" costs, the company had not made a "substantial investment," as required under the leading vested rights case, Avco Community Developers Inc v. South Coast Regional Commission (1976) 17 Cal.3d 785. "With only a conditional use permit (as to which many conditions remained unfulfilled), no building permit and no substantial work done to construct the project, Macpherson can claim no vested right to preclude application of Proposition E to the oil drilling project at the City Yard Site," wrote Los Angeles County Superior Court Judge Dennis Perluss, sitting by assignment to the appellate court. Most significantly, the court ruled that Proposition E does not violate the contracts clause of the U.S. Constitution. First, the court said, the initiative was a proper exercise of police power because it raised a legitimate question of public safety. The appellate court disagreed with the trial court and concluded that substantial evidence of the public safety threat had been presented during the trial. Furthermore, the court concluded, the 1992 lease actually anticipates regulatory changes such as Proposition E. "By its express mandate that Macpherson obtain a drilling permit, the lease thus incorporates this further command that the Macpherson project operate in compliance with then-existing law," wrote Judge Perluss. Furthermore, he wrote, "one of the conditions of the CUP issued in 1993, to which Macpherson agreed, was that he subject property shall be developed, maintained, and operated in full compliance with the conditions of this grant and any law, statute, ordinances, or other regulation applicable to any development or activity on the subject property." Perluss also pointed out that Macpherson could have negotiated for protection from future regulatory changes but did not. The Case: Hermosa Beach Stop Oil Coalition v. City of Hermosa Beach, No. B138557, 01 CDOS 722, 2001 Daily Journal D.A.R. 913, issued January 24, 2001. The Lawyers: For Stop Oil: Jan Chatten-Brown, Chatten-Brown & Associates, (310) 474-7793. For City of Hermosa Beach: Michael Jenkins, Richards, Watson, & Gershon, (213) 626-8484. For Windward Associates (Macpherson): James Bright, Bright & Brown, (818) 243-2121.