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With electricity in California in short supply during recent months, it is easy to overlook the boom in power plant construction that has already started. Since April 1999, the California Energy Commission has approved nine plants capable of increasing the state's generating capacity by 12%. And, the commission is reviewing 14 more proposals that would add another 12% to the state's generating abilities, bringing the capacity to about 67,000 megawatts. This building boom causes some analysts to predict the state will become a net exporter of electricity within two years. Still, policy makers of all stripes are urging speedier reviews of new power plants, and some – led by the new Bush Administration – have called for relaxing environmental protections. A bill providing up to $5 billion for the state to purchase and build power plants (SB 6X, Burton) was advancing through the Legislature in late February, as did other bills related to power plants. A new Energy Commission study of 32 potential locations for "peaker plants" could aid the process of the state itself building power plants, according to a commission official. Surprisingly, most of the recently approved and proposed power plants have met little local resistance. Four of the nine already approved projects are in remote areas of Kern County, where the oil and natural gas industries already have a strong presence. And several mainstream environmental organizations have welcomed new gas-fired power plants because they create electricity more efficiently than older models. Still, some proposals have hit local obstacles, notably proposals in San Jose's Coyote Valley, in the Los Angeles suburb of South Gate, and in Huntington Beach. A One-Year Process In 1974, the Legislature passed the Warren-Alquist Act, which created the State Energy Resources Conservation and Development Commission, commonly known as the California Energy Commission. The legislation (Public Resources Code § 25000 et seq.) gives the Commission sole authority to certify construction and operation of thermal electric power plants of at least 50 megawatts. Projects undergo an environmental review (the document is often called a Final Staff Assessment) that is similar to the process mandated by the California Environmental Quality Act. Before issuing a license, the Energy Commission must also assure that the plant will comply with state and regional regulations, including often-stringent air quality mandates. The commission is not bound by local zoning or decisions of local officials. But in practice, the agency often places great weight on local laws and likes to see support from local authorities, according to John C. Funk, an attorney with Weston, Benshoof, Rochefort, Rubalcava & MacCuish in Los Angeles. Kern County Planning Director Ted James said the Energy Commission has asked local planners to comment on projects and review environmental documents for new power plants in his county. "It's positive that the state is communicating and coordinating with us," James said. "Our arrangement — and it's worked very well — is that they contact us and work with my staff on the local issues." Once the Commission determines an application to construct a power plant is complete, the agency has one year to decide on the project. Legislation approved last year (SB 970, Ducheny) shorted that timeline to six months for power plants of fewer than 100 megawatts that present no significant environmental impacts. "Peaker plants" that would operate limited hours during high-demand periods through 2003 receive a four-month review under the legislation. An Executive Order issued in February by Gov. Davis extended the four-month review process to peaker plants for which an application is filed this year. And peaker plants that can be online by July 31 are eligible for 21-day emergency processing procedure. However, few project proponents have taken advantage of the shorter process, according to Rob Schlichting, an Energy Commission spokesman. El Paso Merchant Energy Company's 51-megawatt plant at San Francisco International Airport underwent the four-month process (actually closer to five months), and the 99-megawatt Hanford Energy Park Project in the Kings County town is in the six-month process. Mixed Receptions Kern County has proven popular with power plant developers because it already has extensive oil and natural gas production, according to James. Many of those extraction facilities have co-generation plants, so construction of a full-fledged power plant is a logical next step. Plus, the California Aqueduct runs through the county, so water is available for plant cooling, and Kern County is fairly close to major urban centers, James added. Thus far, the Kern County projects have spurred only light opposition. "We're seeing groups like the Sierra Club and the Audubon Society asking questions about how many do we want in one area?" said James. He added that the documents he has reviewed indicated Energy Commission has fully addressed questions regarding air quality and cumulative impacts. The proposed Metcalf Energy Center in south San Jose provides a different example, and it demonstrates how odd the politics of power plant development can be. The Sierra Club and the American Lung Association have endorsed the project, while big business, in form of Cisco Systems, opposes it. In 1999, Calpine Corporation, which has become a major supplier of energy in California in the last few years, and Bechtel Enterprises announced plans for a 600-megawatt, gas-fired power plant on 14 acres in San Jose's Coyote Valley. The site was chosen because it is less than a mile from a high-pressure natural gas line, and because the power plant could tie in with an existing 230 kilovolt transmission line less than 500 feet away. But Cisco, which won approval last year for a 6.6-million-square-foot campus near the proposed power plant site, came out strongly against the power plant. Cisco said the facility would harm local air quality and was an inappropriate industrial use in an area long envisioned as a site for technology business growth. San Jose Mayor Ron Gonzales sided with Cisco, and in November 2000, the City Council unanimously denied Calpine's general plan amendment and rezoning applications. Since then, pressure has mounted on the Energy Commission to override the city's decision. State Senate President Pro Tem John Burton has endorsed the project, as have five Democratic Assembly members from the South Bay, and the Santa Clara County Board of Supervisors. Calpine and backers insist no basis exists for opposing the power plant. They point to a Bay Area Air Quality Management District analysis that found the power plant would have a negligible impact on air quality. Calpine has even offered to build an air monitoring station at any location and agreed to shut down should the plant exceed standards, said Lisa Poelle, a spokeswoman for Calpine/Bechtel Joint Development. "This has become the premiere poster child for NIMBYism anywhere in the country because Cisco is so powerful," Poelle said. "Cisco got the mayor to back them on us, and the City Council followed his lead." Rich Ferguson, California energy chair for the Sierra Club, said opponents of any thermal generating plant always raise air pollution concerns. In the case of the Metcalf Energy Center in San Jose, he said, those concerns are overstated. "Our data, the Lung Association's data and the local air quality district's data do not show that as an issue. We found that traffic to and from the new Cisco campus would create far more air pollution impacts," Ferguson said. But Elizabeth Cord, president of the Santa Teresa Citizens Action Group, a neighborhood organization, argued that the public health risk assessment for the plant is inadequate. South San Jose already has the worst air quality in the Bay Area because of prevailing winds and the narrowness of Coyote Valley, she said. Her viewpoint received backing in mid-February when a group of meteorologists from the Naval Postgraduate School in Monterey questioned the atmospheric modeling used by Calpine and the air district. The City of Morgan Hill, a project opponent about seven miles south of the site, commissioned the meteorologists. "I think there could well be within San Jose and Santa Clara County appropriate sites for power plants," said Cord, whose organization supported the controversial Cisco campus. "I think the way things are going, we would be happy to have some power generation. But this isn't the right site." Four hundred miles to the south, Sunlaw Energy's proposal to build a 550-megawatt power plant in South Gate his run into major local opposition. The 13.5-acre site near the 710 Freeway is now a truck depot. It lies in a heavily urbanized community populated primarily by non-English speaking residents, said the Energy Commission's Schlichting. Thus, environmental justice concerns have come to the forefront. The City of South Gate has placed on the March 6 ballot an advisory measure on the power plant. Although the Energy Commission is continuing with its review process, Sunlaw officials have suggested they would abide by the results of the non-binding advisory vote because they do not want to build where they are not wanted. Speeding the Process President Bush's first official response to California's energy situation was to call for relaxing federal environmental regulations. And in mid-February, Bush ordered agencies such as the Environmental Protection Agency and the National Marine Fisheries Service to "expedite federal permit approvals for siting and operating power plants in California." Bush's action came at the request of Gov. Davis, who in early February issued six Executive Orders and introduced a legislative package. Among other things, the executive orders offered a bonus to developers who bring new plants on line by July, directed the California Air Resources Board to establish a State Emissions Offset Bank, and allowed generators to maximize output and pay mitigation fees if necessary. The legislative package includes rebates and tax incentives for generators of renewable energy; loans for businesses that build on-site generating facilities such as solar-powered cells or co-generation plants; and money for water districts to convert diesel generators to natural gas technology. "We'll demonstrate that California can cut red tape, build needed energy supply, and maintain our respect for the environment," Davis said during a February news conference. The governor also appointed Larry Hamlin, vice president of power production, operations and maintenance services for Southern California Edison, as the state's "energy construction czar." Hamlin took a two-month leave from Edison to "ride herd on every single project," Davis said. Davis and the Legislature's majority Democrats appear to have left behind Republican lawmakers. They have suggested building power plants on active and closed military bases, letting local government keep all property tax revenues from new power plants, and giving the governor emergency authority to approve new generating facilities. Republicans have also jumped on the electricity crisis as a way to champion a new round of dam building. Sen. Tom McClintock (R-Thousand Oaks) has even urged the proposed public power authority to acquire and reopen Rancho Seco nuclear power plant, which the Sacramento Municipal Utility District closed about 10 years ago. Republicans have also urged the Energy Commission to issue swift approvals to projects in Huntington Beach and Morro Bay. Many people, including some power generators, say that environmental regulations are really a straw man. They say that no one built any power plants in California for 10 years because of market conditions. State Energy Commission officials are quick to point out that they have approved every plant proposed during the last decade, several of which were never built. An unusual coalition of labor and environmental groups urged Davis and the Legislature not to reduce environmental protections. Nine power plants received Energy Commission approval under the existing system, so there is no reason to alter the system for the benefit of future developers, said Sharon Cornu, of the California Labor Federation. The City of Huntington Beach has also questioned ramifications of speedier permit processing. On orders from the governor, the Energy Commission has implemented a 60-day process for approval of refurbishment and reactivation of two old gas-fired generators owned by AES Corporation. But Huntington Beach Mayor Julien Houchen told the Los Angeles Times, "The people and environment of Huntington Beach are in jeopardy as this train races down the track." Environmentalists say they are not to blame for the 1990's dearth of power plant development. The Sierra Club's Ferguson said the latest technology makes new plants cleaner and more efficient. "Basically, the argument is that if you don't build the new stuff, the old stuff will keep running," he said. Contacts: Ted James, Kern County Planning Department, (661) 862-8600. Lisa Poelle, Calpine/Bechtel Joint Development, (408) 792-1285. Rich Ferguson, Sierra Club, (916) 447-7983. Sharon Cornu, California Labor Federation, (415) 986-4003. California Energy Commission website: www.energy.ca.gov Santa Teresa Citizen Action Group website: www.santateresacitizen.org

A Rancho Palos Verdes homeowner who challenged the city's "view protection ordinance" has lost his case at the Second District Court of Appeal. The court rejected arguments that the ordinance — which allows the city to order the pruning of trees that block ocean views — is an impermissible use of the city's police power and a taking. The court also dismissed arguments that the city's application of the ordinance violated due process rights. In 1989, Rancho Palos Verdes voters approved Measure M, a city-sponsored ballot measure that restricts the height of buildings and foliage. Under the ordinance, a resident of this coastal town whose view is impaired can apply for a "view restoration permit." If approved, the permit allows the city to order foliage trimmed or removed at the cost of the applicant. In February 1997, Norbert Keilbach filed a view restoration permit application to compel his neighbor, Jon Echevarrieta, to trim eight trees that stood 20 to 60 feet tall. After more than a year of proceedings before the city's View Restoration Commission and the City Council, the council approved the view restoration permit. It required Echevarrieta to trim his trees substantially and required Keilbach to plant a barrier of 20 to 25 low-growing shrubs to mitigate Echevarrieta's privacy concerns. In June 1998, Echevarrieta filed a petition for writ of mandate and a complaint for declaratory relief, taking, and spot zoning. Los Angeles County Superior Court Judge Jean Matusinka ruled for the city. On March 3, 2000, the court issued a warrant authorizing entry onto Echevarrieta's property for the purpose of "trimming, culling and lacing trees and foliage." Echevarrieta obtained a 90-day stay of execution, but the court of appeal declined to extend the stay. On appeal, Echevarrieta argued that the ordinance does not state a valid purpose and — as applied — impermissibly expands the city's police power. The Second District, Division Four, disagreed and upheld the trial court. Writing for the unanimous three-judge panel, Justice Gary Hastings quoted extensively from the ordinance, which states in part, "The hillsides provide potential vista points and view lots. The City's General Plan recognizes these natural resources and calls for their protection. The public health, safety and welfare of the City require prevention of needless destruction and impairment of these limited vista points and view lots." Wrote Hastings, "Enacting the ordinance for these purposes is clearly a legitimate exercise of the city's traditional police power." Both Hastings and the trial court cited Kucera v. Lizza, (1997) 59 Cal.App.4th 1141 (see CP&DR Legal Digest, January 1998), in which an appellate court upheld a similar ordinance in the City of Tiburon. As for the takings argument, the court found that the ordinance did not deny all economically beneficial or productive use of Echevarrieta's property — the standard set in Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003. "Appellant cites the damages to his property as his loss of privacy and ‘utility saving cooling shade,'" Hastings wrote. "Appellant cannot show he has a vested right to foliage of a certain height or to a fixed amount of utility charges. …While appellant cherishes his park-like privacy, the regulation of tree heights throughout the city may indirectly increase the property's value, as the city becomes known for one which has scenic vistas." The court also found that the warrant authorizing entry onto Echevarrieta's property was not a "physical invasion" barred by the Fifth Amendment, as the homeowner had argued. Echevarrieta's refusal to comply with the City Council's decision compelled such activity, the court held. Regarding due process, the court rejected the argument that the city retroactively applied the ordinance, which amounted to an arbitrary action. "There is no automatic retroactive reach of the ordinance. Homeowners are allowed to keep foliage at the height it existed on the effective date of the Ordinance. It is only when another homeowner applies for a view restoration permit that the inquiry begins whether the foliage must be trimmed to a lower height," Hastings wrote. The court also rejected the argument that the ordinance is deceptive and uncertain. The Case: Jon Echevarrieta v. City of Rancho Palos Verdes, No. B138366, 01 C.D.O.S. 696, 2001 Daily Journal, D.A.R. 863, filed January 3, 2001, ordered published January 18, 2001. The Lawyers: For Echevarrieta: Robert Hampton Rogers, Sullivan, Workman & Dee, (213) 624-5544. For the city: Carol Lynch, Richards, Watson & Gershon, (213) 626-8484.

The owner of a commercial building and billboard next to a freeway could not avoid state prohibitions against off-site advertising simply by leasing office space to the advertisers, the First District Court of Appeal has ruled. The court held that the Outdoor Advertising Act (Bus. & Prof. Code § 5200 et. seq.) prohibited the billboard's use for promoting commercial enterprises that were clearly undertaken elsewhere. In the early 1990s, Nano Maldonado purchased a commercial building next to the southbound lanes of Highway 101 in Redwood City. On top of the building is a double-sided billboard erected in 1956. In March 1993, Maldonado applied to Caltrans for a permit to use the billboard for off-premise displays. Caltrans denied the permit because Highway 101 was classified a "landscaped freeway" under the Outdoor Advertising Act, which prohibits billboards unless they promote goods or services available at the property on which the sign is located. Later in 1993, Caltrans cited Maldonado for violating the Act because his billboard was advertising off-site goods and services. In October 1996, Caltrans again cited the property owner and ordered him to remove the advertising within five weeks. Maldonado appealed to the California Outdoor Advertising Review Board, which upheld Caltrans' decision. Caltrans then sued to abate a public nuisance. Maldonado argued that he did not violate the Act's ban on off-premise advertising because the businesses that leased the billboard space also leased office space in the building. But San Mateo County Superior Court Judge Barbara Mallach ruled that Caltrans properly denied the permit because none of the lessees actually provided goods or services on the site. Mallach ruled that the advertisements violated the Act, and she enjoined Maldonado from placing further advertising on the billboard without permission from Caltrans. A three-judge panel of the First District, Division Five, unanimously upheld the trial court. According to essentially undisputed facts in the record, only two of the advertisers ever used the office space at all, and those two "did so only briefly and for purposes wholly unrelated to the message of their advertising," Justice Barbara Jones wrote for the appellate court. "At trial, appellant testified that he did not know the nature of the business conducted in his building by Palo Alto Holiday Inn, Stanford Shopping Center, Skyway Cellular or Golden Time Jewelers. He was unaware of these businesses ever, respectively, offering meals and accommodation, opening a shopping annex, selling cellular telephones or selling watches at his building," Justice Jones wrote. Furthermore, there was no evidence that the businesses that did use the office space constituted the primary activity in the building or Maldonado's principle source of income. The court cited People ex rel. Dept. of Transportation v. Harris, (1982) 128 Cal.App. 3d 264. In that case, the court ruled that a sign on Harris Ranch property along Interstate 5, and saying "Harris Ranch 7 Miles," violated the Outdoor Advertising Act because it directed motorists to a restaurant seven miles away from the sign's location. Maldonado also argued that his billboard for off-premise advertising was lawfully erected before passage of the Act, and pointed to § 5216.1, which states that there is a rebuttable presumption that such a sign is legal if the owner has not been cited during the previous five years. But the appellate court rejected this argument, too. Section 5441 states that prohibited signs along landscaped freeways are subject to removal three years from the date Caltrans designated the freeway as landscaped and the character of the freeway has been changed, the court ruled. "Therefore, the fact the billboard may have been lawfully erected for purposes of § 5216.1 became moot once the portion of Highway 101 alongside appellant's property was designed ‘landscaped' in 1993," Justice Jones wrote. "Any advertising display that violates the Act is a public nuisance and subject to removal." The First District upheld Judge Mallach's injunction except for one portion requiring Maldonado to get a permit. Proper billboards do not require a permit under the Act, the court held. In an unpublished portion of the opinion, the court upheld Mallach's decision not to allow Maldonado to file a cross-complaint and an amended answer alleging inverse condemnation and that the sign was grandfathered. The trial judge gave the property owner 30 days to file an affirmative defense, but Maldonado missed the deadline. The Case: The People ex rel. Department of Transportation v. Nano Maldonado, No. A089538, 2001 Daily Journal, D.A.R. 1463, filed January 10, 2001, certified for partial publication Feb. 7, 2001. The Lawyers: For Caltrans: David Sandler, (415) 982-3130. For Maldonado: Terry Traktman, (707) 769-3090.

The California Supreme Court has dealt a setback to property rights advocates and outlined a new standard for proving that a government agency violated a property owner's federal due process rights. On a 5-2 decision, the court held that a landlord who is subject to a mobilehome rent control ordinance can receive compensation under the federal Civil Rights Act (42 U.S.C. Section 1983) only if the government deliberately flouts the law. " ot every government action that fails to measure up to the ideal of a fair and efficient rent control proceeding inflicts a constitutional injury. Only those government actions that amount to a deliberate flouting of the law qualify for relief under Section 1983," Justice Stanley Mosk wrote. In a sharp dissent, Justice Janice Rogers Brown wrote, "In the latest of a series of decisions rejecting the claims of property owners, the court now refuses to enforce federal civil rights remedies when it comes to confiscatory regulations." The case stems from a long-running feud between the owner of a 260-space mobilehome park, and the City of Clovis. The source of the friction is the city's mobilehome rent control ordinance that was in effect from 1978 to 1993. During the 1980s, owner Roger Galland challenged the constitutionality of the ordinance and twice sued over the amount of rent increases approved by the city. He lost every round at the appellate level and, in an unpublished opinion, was sanctioned by the court for a frivolous appeal. Galland filed for new rent increases in April 1988, June 1989 and January 1990. During proceedings that lasted several years, the city rejected the 1988 request, and granted portions of the 1989 and 1990 rent hikes – but not until 1992. In May 1990, Galland sued the city for damages for inverse condemnation, for denial of substantive and procedural due process under the state and federal constitutions, and for Section 1983 violations. He argued that Clovis's application of its rent control ordinance amounted to a regulatory taking and that the City Council and the Mobile Home Rent Review Commission denied him a fair hearing. In 1994, Fresno County Superior Court Judge Gary Ray Kerkorian found that the manner in which the city administered its ordinance violated Galland's due process rights, although Kerkorian held that the violation did not support an inverse condemnation claim. But, after hearings on liability and damages, Kerkorian did conclude that Galland was entitled to Section 1983 damages because the city did not grant the landlord a fair rate of return. The judge awarded Galland $236,000 in lost rents from 1989 through March 1995, and more than $700,000 in legal and administrative costs. The Fifth District Court of Appeal upheld the lower court. However, the state Supreme Court overturned the decision and remanded the case back to the trial court. According to Justice Mosk's analysis, Galland brought two distinct due process claims under Section 1983. The first stemmed from the city's failure to grant rent increases, resulting in confiscatorily low rents. The second claim related to the excessive procedural costs Galland said he had to pay in order to obtain a rent increase. Mosk based his opinion in part on the court's decision in Kavanau v. Santa Monica Rent Control Bd., (1997) 16 Cal.4th 761. In Kavanau, a takings case, the court held that a landlord challenging a rent ceiling as confiscatory must first ask the regulatory agency for a future rent adjustment to compensate for previous losses – a "Kavanau" adjustment. Mosk extended the same theory to Galland's due process claims. "When landlords seek Section 1983 damages from allegedly confiscatory rent regulation, we hold that they must show (1) that a confiscatory rent ceiling or other rent regulation was imposed and (2) that relief via a writ of mandate and a Kavanau adjustment is inadequate," Mosk wrote. The state Supreme Court remanded those issues to the trial court, directing the court to determine whether the rent ceilings "were within the constitutionally permitted broad zone of reasonableness." If Galland can prove the rent ceiling was confiscatory, "it is for Clovis to attempt on remand to adjust rent ceilings to compensate for lost rents, and for the trial court to review whether such adjustments are adequate to meet the constitutional standard for a fair return," Mosk wrote. If the Kavanau adjustment proves inadequate, Galland can file a Section 1983 action. Plus, Mosk wrote, the city and court must consider the administrative expenses the city imposed on Galland when considering the Kavanau adjustment. As to Galland's claim of excessive procedural costs, Mosk said the claim was really more substantive that procedural because Galland's alleged injury stemmed from the city's demands for extensive financial records and analyses, which Galland contended were arbitrary and irrational. "The question, then, is whether Clovis's actions during the rent adjustment hearings of 1988 to 1990, independent of the outcome of those hearings … violated the Gallands' substantive due process rights," Mosk wrote. That question was remanded to the trial court, but this is where the State Supreme Court set its new standard, based partly on County of Sacramento v. Lewis, (1998) 523 U.S 833, and partly on Silverman v. Barry, (D.C. Circuit 1988) 845 F.2d 1072. "In cases such as the present," Mosk wrote, "a deliberate flouting of the law may be said to have occurred if the city's demands for information and other procedural demands were so excessive and irrelevant to the regulatory task at hand as to lead a court to conclude that such demands were imposed not in order to obtain more information or increase the reliability of the eventual decision, but rather to obstruct or discourage landlords from either requesting or obtaining reasonable rent increases to which they are constitutionally entitled. We emphasize, however, that something more than mere ‘bureaucratic bungling' is required." Joining Mosk's opinion were Chief Justice Ronald George, and Associate Justices Ming Chin, Joyce Kennard, and Kathryn Werdegar. First District Court of Appeal Justice Barbara Jones, sitting pro tem for a recused Justice Marvin Baxter, filed a concurring and dissenting opinion. In her dissent, Brown suggested the court was picking on property owners. It might look more favorably on the victim in a classic civil rights case, such as a black firefighter who has been denied promotions or raises in a city with a history of discrimination, she wrote. "Would this court reverse and tell the firefighter: You have no remedy under Section 1983; instead, you have to go back to the city and petition for extra promotions and raises that will diffuse the incipient constitutional violation?" Brown wrote. The Case: Roger Galland v. City of Clovis, No. S080670, 01 C.D.O.S. 1034, 2001 Daily Journal, D.A.R. 1313, filed February 5, 2001. The Lawyers: For Galland: Jaquelynn Pope, (310) 379-3410. For the city: David J Wolfe, Lozano Smith, (559) 431-5600.

Faced with growing demand for student housing, University of California, Santa Cruz, has agreed to lease the Santa Cruz Holiday Inn for 10 years for about $19.5 million. During the past three years, UCSC has leased a small portion of the hotel for student housing. But starting later this year, the 170-room hotel will be turned over completely to students, faculty and campus visitors. About 250 students will live at the hotel, which is three miles from campus. Santa Cruz city officials are angry about the deal because it will cost the city about $500,000 a year in transit occupancy tax. The Holiday Inn is one of only two large hotels in town. Cities and counties in the Inland Empire have sued the state Department of Housing and Community Development and the Southern California Association of Governments over fair-share housing targets. Filing the suit were the counties of Riverside and San Bernardino, and the cities of Moreno Valley, Hemet, Victorville and Chino. Those jurisdictions argue that they are being forced to accommodate more than their share of the region's housing need (see CP&DR, February 2001). The City of Oxnard has also sued SCAG over its method of allocating low- and very low-income units. Under the Regional Housing Needs Assessment adopted by SCAG late last year, Oxnard must provide 1,211 low- and very low-income units out of a total of 3,074 new homes. A San Diego councilwoman with ties to the owner of the San Diego Padres has resigned and agreed to pay a $10,000 fine for violating the California Political Reform Act. San Diego County Superior Court Judge Wayne Peterson accepted the plea agreement between Valerie Stallings and federal prosecutors. Stallings pleaded guilty to a charge of intentionally failing to disclose gifts from the Padres and team owner John Moores, and one count of intentionally failing to disqualify herself from City Council votes on a new stadium for the Padres and related downtown development projects. The gifts included airplane tickets for Stallings' family to visit her in Kansas during cancer treatment, use of Moores' house in Carmel, and various Padres souvenirs. The FBI began investigating Stallings over what appeared to be a sweetheart stock deal involving Stallings and a Moores-owned company. But the FBI found no evidence of insider trading, and Stallings did report her $11,000 stock profit in disclosure forms. State parks officials announced in February that they were dropping plans for development of a luxury resort at Crystal Cove State Park in Orange County. Officials said public protest over the project was simply overwhelming. The state parks department in 1997 signed a lease with a developer to convert 46 1920's-vintage cottages into expensive, hotel-style cabins. But environmentalists, historic preservation advocates and supporters of public beach access fought the proposal vigorously. The state will now need to buy back the lease it signed with developer Michael Freed. Money for that and an overhaul of the cottages might come from the Coastal Conservancy. The state in February also served eviction notices on tenants of the cottages, some of whom have lived there for decades. The state has tried, but failed, to evict the tenants off and on since the late 1970s, in part because of a failing septic system. Opponents of a proposed Indian casino at the site of a cardroom in the Bay Area city of San Pablo are lobbying Gov. Davis to halt the project. Legislation carried by Rep. George Miller (D-Martinez) allows the Lytton Band of Pomo Indians to add the 10-acre cardroom site along Interstate-80 to their reservation. The Lytton Band, which is based 70 miles away in Sonoma County, is negotiating with the governor's office in hopes of bringing full-scale gambling to the Bay Area. Owners of existing cardrooms and a number of local government officials are hoping to block the casino. The San Francisco Board of Supervisors approved a six-month ban on construction of live-work lofts in mid-February. The moratorium, approved 9-1, halts conversions that have been changing the nature of several working-class neighborhoods and displacing lower-income families. Supervisors said they would work with community activists on ways to encourage development of new housing for low- and middle-income families. Supervisors also extended an existing jobs-housing linkage fee to developers of large hotels, retail projects, entertainment centers, and some research and development projects. Officebuilders in San Francisco have paid the affordable housing fee for years. The battle over the Redlands Doughnut Hole appears to have ended. Both the Redlands City Council and the San Bernardino County Board of Supervisors voted to approved a settlement agreement. Majestic Reality fought with the city for years for the right to develop a 125-acre retail center on a portion of the 1,200-acre unincorporated island, but Majestic and the city could never reach agreement. Last year, the state Legislature approved a bill that essentially gave the county the right to approve development at the site. Under the agreement, the city will drop objections to the Majestic development, and the county and Majestic will end their challenge to a large commercial project the city approved in December. Two members of the Redlands City Council voiced strong objections to the agreement, calling it "disastrous." Opposition to construction of apartments resulted in voters in Fontana's Hunter's Ridge district overwhelmingly approving modifications to a Mello-Roos special tax district. In mail-only balloting that concluded in late-January, residents voted 1,191 to 19 in favor of Measure T. The refinancing divides $3 million in Mello-Roos bond payments among future residents of a subdivision, rather than requiring the builder of apartments to pay the money up front. The vote also allows the city's rezoning of a 23-acre parcel to go forward, permitting development of 142 single-family homes. Hunter's Ridge residents fought an earlier proposal, envisioned in the original Mello-Roos bond financing, to construct 390 apartments on the site. Residents said the apartments would reduce property values and increase crime. The City Council in the far-eastern Contra Costa County community of Brentwood approved a 45-day moratorium on housing construction in one area of town. Planners sought the moratorium, which could be extended for up to a year, to allow time to complete a study that should determine whether the fast-growing city has adequate land zoned for a jobs-housing balance. Correction. Southern California Association of Governments Principle Planner Joe Carreras was misquoted in the February edition. In arguing for a lower housing target for the region, Carreras said that the federal census found 600,000 fewer Californians than the state Department of Finance had estimated.

WASHINGTON _ Supreme Court justices appeared mired in a swamp of messy issues on February 26 as they heard a Rhode Island landowner's plea for compensation for being blocked from filling 18 acres of Atlantic coastal wetlands. Attorneys for Anthony Palazzolo and the State of Rhode Island disagreed about virtually everything in the closely watched property rights case from the facts of the dispute to the procedural and substantive rules for resolving it. For their part, the justices groped for answers on such basic issues as the exact size of Palazzolo's holding and the possible value of any permitted development on the site. "How do we know?" Justice Stephen G. Breyer asked Palazzolo's lawyer, James S. Burling of the Sacramento-based Pacific Legal Foundation. The justices' uncertain questioning could presage a muddled outcome. That could disappoint property rights advocates, who had hoped for a ruling clarifying landowners' rights for compensation in "regulatory" takings cases. But state and local governments could also be disappointed if the ruling gives any additional room for takings claims. Palazzolo argues that he is being blocked from building up to 74 houses on the 18 acres of wetland, which lie just inland of an oceanfront road in the town of Westerly. He is asking for more than $3.15 million in compensation, the amount he says he could realize by developing all 74 lots. In rejecting his plea, the Rhode Island Supreme Court called the projection "unrealistically optimistic." Along with the wetlands, Palazzolo's holding encompasses a small but not precisely determined amount of "upland" property that includes a road and a developable "turnaround." Rhode Island officials say he could build at least one house on the upland. Palazzolo's lawyers argue one house amounts to "a pittance." The case history is long and complex. Palazzolo, 80 years old and an auto wrecker by trade, bought the property along with two other people in 1959 for $8,000. Under local zoning law, he thought he could develop it for residential or recreational purposes. In 1971, a state agency gave him permission to fill the land with material dredged from adjacent Winnipaug Pond, but the agency revoked the permit shortly thereafter. The closely held corporation Palazzolo formed lapsed in 1978, and title to the property passed to him individually. In the 1980s, he made two further attempts to win approval to fill all or part of the wetlands. The state's Coastal Resource Management Council turned him down in 1983 and again in 1985. Three years later, Palazzolo sued, claiming the state deprived him of all economic use of his land and asking for compensation under the Fifth Amendment's Takings Clause. Procedurally, Palazzolo's case faces a major obstacle: the judicial doctrine of ripeness, which courts use to stay out of cases not yet completely developed. Palazzolo never filed a residential development plan, so Rhode Island officials say there is no way to know whether he might have been allowed to build some houses. Conservative justices, however, were skeptical. "Why do you have to keep coming back?" Justice Antonin Scalia asked Rhode Island Attorney General Sheldon Whitehouse. Eventually, Whitehouse conceded that regulators might be "overbearing" if they forced a property owner to cross too many procedural hurdles. On the merits, the justices struggled with two major issues: first, whether Palazzolo should have known he would not be allowed to fill the wetland when he took title to the property in 1978; and, second, whether he had an "economically viable use" of part of the land even if filling was not permitted. Burling argued coastal landowners had every right to fill wetlands until the new regulatory regime was imposed during the 1970s, while Whitehouse said the state had protected wetlands "since time immemorial." On the value of the land, Whitehouse said Palazzolo had manufactured a takings case by focusing solely "on the portion of the property that is not buildable." Burling countered that some "nonzero value" was not enough to defeat a takings claim. The case attracted more than a dozen friend-of-the-court briefs, with homebuilders, farmers, and property rights groups on Palazzolo's side, and state and local government groups and environmental organizations on Rhode Island's. A decision is due before the court breaks for its summer recess at the end of June. The Case: Palazzolo v. Rhode Island, No. 99-2047 The Attorneys: For Palazzolo: James S. Burling, Pacific Legal Foundation, (916) 362-2833. For Rhode Island: Attorney General Sheldon Whitehouse, (401) 274-4400. Kenneth Jost, formerly editor of the Los Angeles Daily Journal, is staff writer for Congressional Quarterly and author of The Supreme Court Yearbook.

The first update of housing elements in a decade has resulted in something of a standoff between the Southern California Association of Governments and the state Department of Housing and Community Development. Stuck in the middle are Riverside and San Bernardino counties and several inland cities that do not know how many housing units to plan for. After negotiations with SCAG representatives throughout 1999, state officials ordered the regional agency to plan for 504,000 housing units during the 1998-2005 planning cycle. However, last November, SCAG submitted a final Regional Housing Needs Assessment (RHNA) allocating 438,000 housing units to the region's six counties and 184 cities. In December, HCD rejected SCAG's report, saying no justification existed for the reduction. The state adjusted SCAG's RHNA to 503,000 units. State law required SCAG jurisdictions to submit housing elements to HCD by December 31. Nearly a month after the deadline, only about 30 of 190 local governments had completed housing plans. The SCAG-HCD stalemate appears to force 11 local governments, mostly in the Inland Empire, to negotiate directly with the state, as HCD officials say they will reject housing elements that use disapproved SCAG housing targets. The various parties continue to talk, but HCD says its December response was final. Several state lawmakers have met with key players, but the legislators appear unlikely to intercede, at least for now, according to sources at the Capitol. "It's at the stage where it is all quite dicey," said Ty Schuiling, director of planning and programming for the San Bernardino Association of Governments. It will be difficult for HCD to back down. If the state allows SCAG to unilaterally decrease its housing allocation, the Association of Bay Area Governments and other regional planning organizations could see an invitation to develop their own housing targets despite the state's allocation formula. "We have fulfilled our statutory requirement to work with SCAG on coming up with the numbers," said Cathy Creswell, acting deputy director of HCD, who said HCD has authority to override SCAG's numbers. "We are required to make sure a region provides its fair share of the state's housing needs." Marc Brown, co-chairman of the California Housing Law Project said, "I think it's unfortunate in this case that SCAG felt like it has to challenge the entire process." Determining the need The housing allocation effort is a state-mandated process designed to give each city and county in the state a target number housing units at a variety of income levels. Local jurisdictions use the target numbers as a basis for their general plan housing elements, which must spell out how and where the city or county will accommodate the units. The state provides an allotment of housing units to every region, and the regional planning agency divvies them up among its cities and counties. The state originally gave the SCAG region a target of about 675,000 units, a number that SCAG eventually negotiated down to 504,000. But dozens of local jurisdiction were dissatisfied with how SCAG allotted those units across the southland. So SCAG conducted two rounds of appeals for its members — about a quarter of which sought to reduce their targets (see CP&DR, June 2000). During the second round, SCAG accepted all or part of appeals from 11 cities and counties for a total of 67,000 units. But SCAG never added those 67,000 units to other jurisdictions, instead cutting its RHNA by the same amount. Leaders of SCAG contend that state officials relied on outdated information and assumptions when they set the region's housing target. In a November letter to Housing and Community Development Director Julie Bornstein, SCAG President Ronald Bates wrote, "SCAG has reduced the regional housing need from the Draft RHNA because parts of the region have experienced long-term and profound distress in the housing market, influenced by base closures, high vacancy, foreclosure, and the lingering effects of the last recession." Plus, said SCAG Principle Planner Joe Carreras, the census counted more Californians than the state Department of Finance had estimated, meaning that more large families are living in the same home, a trend not reflected by HCD's housing allocation. "Clearly there is a really huge affordable housing crunch statewide, and we're a part of that," Carreras said. But focussing on the RHNA number instead of on how to solve the problem does little good, he said. The association worked on establishing good, defendable housing goals and did not worry so much about the final number, he said. Also, SCAG is following through on an action plan that resulted from a "housing summit" last fall, and is preparing a 10-year review of the region's housing and economic trends, he said. Officials in Sacramento are unconvinced. In an attachment to HCD's December response to SCAG, the state defended its use of Department of Finance data: "What is reflected in more recent DOF housing and household estimates is low housing production, or lower household formation; a problem that needs to be addressed by measures to increase housing construction, not reinforced by constraining the projected need, or the capacity to accommodate it. The incidence of families doubling up in single housing units, for example, does not justify defacto incorporation of it as a planning parameter." Creswell said state officials began working with SCAG on regional housing targets in 1997. She said SCAG had a good process until late last year, when it deviated from the process by reducing some jurisdictions' targets without redistributing those units elsewhere. The Inland Inquiry Lying at the center of the dispute are western Riverside and San Bernardino counties. San Bernardino County and its cities of Chino Hills, Victorville and San Bernardino all had their housing targets lowered on appeal by SCAG. Riverside County and its cities of Moreno Valley and Riverside also had their targets lowered by SCAG. Those seven jurisdictions account for 50,000 of the disputed units, as HCD insists that they keep their original allotment from SCAG. In the case of unincorporated San Bernardino County, HCD insists on a target of 43,668 units, while SCAG approved a target of 16,211. Neither number reflects market trends, as the generally pro-growth county has issued about a 1,000 housing permits a year recently. "The rate at which the Inland Empire would have to grow to meet the SCAG targets would be equal to the highest growth rate ever in the area, year after year after year," said SANBAG's Schuiling. "We don't claim to know what the right regional total is. But I do know that it is unreasonable to expect any part of the region to have record-setting growth year after year to meet a target handed to it by another agency." Arguing that it has not recovered from the recession and military base closures of the early 1990s, the City of San Bernardino successfully lobbied SCAG to reduce its housing target from nearly 3,800 units to zero. Both SCAG and HCD relied on old census data that did not reflect the closure of Norton Air Force Base and the Santa Fe rail yard, which eliminated thousands of jobs, said Valerie Ross, senior planner for the city. "We had the highest HUD foreclosure rate in the nation," she said. "We have vacant units throughout the city, both single- and multi-family." Ross also contended it is unfair for HCD to certify housing elements from other jurisdictions in the SCAG region while it rejects others that rely on SCAG-approved targets. The state's approvals eliminate the possibility of units getting redistributed to other jurisdictions. San Bernardino has not yet submitted a housing element to the state. The City of Moreno Valley has submitted a housing element, but it was based on a target of 3,500 units that SCAG approved on appeal — down from an earlier allotment of 10,000. The city has not heard back from the state, said Linda Guillis, the city's community and economic development director. Moreno Valley, just southeast of Riverside, was stung when March Air Force Base shuttered, eliminating 10,000 jobs. During the recession, Moreno Valley accounted for 62% of Riverside County's foreclosures, Guillis said. Even now, the city issues permits for only about 300 new homes a year, despite the existence in specific plans approvals for 19,000 units, she said. "We do have land available. We have an extremely business-friendly process and political environment. Frankly, we're ready to see the housing end of the market catch up," she said. Like other people, Guillis complained that SCAG appeared to view the Inland Empire as a convenient place to dump affordable housing. While Riverside and San Bernardino counties account for 19% of the current population, the original RHNA placed 46% of growth in the area. "We'd like to see some logical relationship between the jobs and the housing for people who work in those jobs. We're already in a housing-rich area," Guillis said. "When you create housing units in Moreno Valley, people are on the 91 freeway commuting to jobs in Orange County, and on the 10 and 60 freeways to get to jobs in Los Angeles County. What you have is a significant impact on the transportation corridors and on the air quality." Guillis also noted that the RHNA process is intended to prevent undue concentrations of low- and moderate-income housing. Yet at its current growth rate, Moreno Valley could not provide the targeted number of 2,900 very low- and low-income units sought by HCD — even if every new unit approved during the planning cycle were in the very low- and low-income bracket, she said. Creswell, of HCD, said she is sympathetic to many of these arguments. But, she said, SCAG should have dealt with them and not deferred the controversy to HCD at the end of the planning process. The department will certify housing elements from other jurisdictions because it cannot hold them hostage while a small group disputes its housing targets, she added. In the December response letter, state officials reject pleas from the Inland Empire and SCAG regarding a flat economy. The state employment growth has been double the national rate, which itself set records, and the Riverside-San Bernardino area had a higher rate of employment growth than any of the state's other major metro areas in 1999 and 2000, according to HCD. Still Creswell said state officials are willing to provide resources to aid economic development in Riverside and San Bernardino counties. The housing allocation process offered the opportunity for regional planners to determine a better distribution of jobs and housing; instead, they reaffirmed the traditional pattern of jobs near the coast and housing inland, she said. "We absolutely appreciate their (Inland Empire leaders) concern about needing a stronger job base in relationship to their housing," Creswell said. But she added, "This is fundamentally a problem that the region needs to deal with. … From our perspective, the region has gone without planning for housing for most of the last decade." Carreras, principle planner at SCAG, defended the association's decisions based on a weak Inland Empire job market, high vacancy rates, and lingering effects of the military's pullout. He said the association will promote dialogue between its members and the state. Carreras also said he recognizes the need for infill development of affordable and high-end housing in mature areas, especially three zones that are targets for venture capital, namely Eastern Ventura County, Santa Monica and Irvine. However, developers see infill projects as risky, and cities are often reluctant to approve housing development when there is limited vacant land available, he said. "We have to address fiscalization of land use if we're going to see any changes in development patterns of any scale in California," Carreras said. Whether the Legislature addresses that concern in a meaningful fashion this year is unknown. There is talk in the Capitol this year of housing element reform, including putting teeth in the existing housing element law by establishing serious penalties for noncompliant jurisdictions. No matter what the Legislature does, housing advocate Brown said, SCAG needs to ensure low-income housing units are fairly distributed. And cities in the Inland Empire and elsewhere need to decide how they are going to meet an unquestionable housing demand, he said. Contacts: Cathy Creswell, Department of Housing and Community Development, (916) 323-3183. Joe Carreras, Southern California Association of Governments, (213) 236-1856. Ty Schuiling, San Bernardino Association of Governments, (909) 884-8276. Linda Guillis, City of Moreno Valley, (909) 413-3210. Valerie Ross, City of San Bernardino, (909) 384-5057. Marc Brown, California Housing Law Project, (916) 446-9241. SCAG RHNA website: http://api.ucla.edu/rhna/index.cfm

Taxpayer organizations recently lost two lawsuits against the City of Los Angeles alleging violations of Proposition 218. In its first interpretation of the initiative, the California Supreme Court held that the city's apartment inspection fee was not subject to the voter approval provisions of Proposition 218. In the other case, an appellate court ruled that the city's water service fees and the transfer of money from the water fund to other funds were not subject to Proposition 218. In the apartment inspection fee case, the state Supreme Court chose a fairly narrow interpretation of Proposition 218, the 1996 Right to Vote on Taxes Act, which added article XIII D to the California Constitution. The ruling pleased many cities, about 90 of which filed amicus briefs in the case, but angered taxpayer groups, which said the court created a loophole for local government. 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-a-year fee on each of the city's approximately 750,000 apartments. Apartment owners filed a lawsuit, but lost at the trial court level when the judge ruled that the fee was not subject to Proposition 218 because it applied only to owners of rental units. However, a unanimous three-judge panel of the Second District Court of Appeal reversed the lower court, saying the charge was a user fee for property related service and, thus, subject to Proposition 218 (see CP&DR Legal Digest, October 1999). The city had argued that it could avoid putting the fee to voters because the levy was a regulatory charge on a business, not a tax on property. In a 5-2 decision, the California Supreme Court overturned the appellate court. Writing for the majority, Justice Stanley Mosk said neither the apartment owners nor the city were entirely correct. "The mere fact that a levy is regulatory (as this inspection fee clearly is) or touches on business activities (as it clearly does) is not enough, by itself to remove it from article XIII D's scope," Mosk wrote. "But the city is correct that article XIII D only restrict fees imposed directly on property owners in their capacity as such. The inspection fee is not imposed solely because a person owns property. Rather it is imposed because the property is being rented. It ceases along with the business operation, whether or not ownership remains in the same hands. For that reason, the city must prevail." Mosk dissected the language of Proposition 218, noting a crucial difference between a fee imposed on an incident of property ownership, versus a fee on a person or parcel as an incident of property ownership. " axes, assessments, fees and charges are subject to the constructional strictures when they burden landowners as landowners. The ordinance does not do so: it imposes a fee on its subjects by virtue of their ownership of a business — i.e. because they are landlords," Mosk wrote. "What plaintiffs ask us to do is alter the foregoing language — change ‘as an incident of property ownership' to ‘on an incident of property ownership.' But to do so would be to ignore its plain language meaning — namely, that it applies only to exactions levied solely by virtue of property ownership. We may not interpret article XIII D as if it had been rewritten." Chief Justice Ronald George, and Justices Joyce Kennard, Kathryn Werdegar and Ming Chin joined Mosk. Justice Janice Rogers Brown issued a dissent that was joined by Marvin Baxter. "In my view, the voters did not intend the courts to look any further than a standard dictionary in applying the terms of article XIII D," Brown wrote. "The dictionary defines an ‘incident' as ‘something incident to something else,' that is ‘dependent upon or involved in something else.' In other words, if the imposition of a fee depends upon one's ownership of property, it comes within the purview of article XIII D unless otherwise excepted." The water fees case was more clear cut, as a unanimous three judge panel of the Second District Court of Appeal upheld Ronald Sohigian's decision that a taxpayers' group had no grounds for its lawsuit. "Appellants contend that the charges imposed for water service in Los Angeles are in reality special taxes, imposed as an incident of property ownership, and therefore, require voter approval. We disagree," Justice Gary Hastings wrote for the court. "The usage rates are basically commodity charges which do not fall within the scope of Proposition 218. … The charges for water service are based primarily on the amount consumed, and are not incident or directly related to property ownership." The court also held that the city charter authorized the City Council to transfer water fund surpluses to a reserve fund, and then to the general fund. The Cases: Apartment Association of Los Angeles County v. City of Los Angeles, No. S082645, 01 C.D.O.S. 209, 2001 Daily Journal D.A.R. 237, filed January 8, 2001. Howard Jarvis Taxpayers Association v. City of Los Angeles, No. B137639, 00 C.D.O.S. 9465, filed November 1, 2000, ordered published November 29, 2000. The Lawyers: For Apartment Association: Trevor Grimm, California Apartment Law Information Foundation, (213) 380-0303. For Jarvis: Timothy Bittle, (916) 444-9950. For L.A. in apartment case: Miguel Dager, deputy city attorney, (213) 847-0165. For L.A. in Jarvis case: Fay Chu, deputy city attorney, (213) 367-4580.

Two years ago, heavy equipment churned up dust and closed lanes on nearly every major street in Temecula. The city was in the midst of a $60 million road improvement project undertaken to help catch up with rapid growth that has characterized the southwestern Riverside County community for years. In retrospect, the massive road project could not have come at a better time for slow-growth advocates, who in November 1999 elected two of their own to the City Council. The council now has a 3-2 pro-growth split, and both sides are gearing up for a heated municipal election this November, when all three pro-growth councilmen are up for re-election. Pamela Miod was one of the Temecula residents stuck in traffic during road construction two years ago. When it took her 30 minutes to drive seven miles across town one day, she "snapped." At the time, Miod did not know an EIR from a CUP. But after an initial inquiry to the City Council proved frustrating, Miod contacted Sam Pratt, a well-known Temecula growth fighter. Next thing she knew, Miod became manager of Pratt's City Council campaign, and president of a new group called Citizens First of Temecula Valley. The then-80-year-old Pratt won the election, becoming, he contends, the state's oldest first-time office holder. Citizens First, meanwhile, has become such a force that developers are now asking for meetings with the group. "Our organization has just grown and grown and grown � through e-mails, of course," Miod said. "We've had other organizations form as a result of this." The organization was quickly hit with the "no-growth" label, but Miod said her group opposes only the break-neck pace of development that has become standard. "We don't even have the chance to get used to one hill being leveled when another hill gets leveled," Miod said. "In every corner of town, there is some kind of huge development going on, whether it be commercial or residential." Since it incorporated in December 1989, Temecula has been one of California's fastest-growing cities. In only 10 years, its population doubled to 54,000 in 2000. Although a shopping mall was built recently, large single-family housing tracts have been the primary type of development in town. That is because Temecula offers relatively affordable prices and a few rural qualities, and it is within commuting distance � albeit long distance � of job centers in Orange and San Diego counties. Until 1999, the Temecula City Council had unabashedly welcomed development � much as the Riverside County Board of Supervisors did when it had jurisdiction over the area. "It's a different ballgame now," observed Matthew Fagan, a consultant on two major developments in Temecula and a former planner for the city. "For a young city, a lot has gone one. But I'm not sure it's different than what a lot of other cities have gone through." In fact, the political and planning cycles experienced by Temecula have been fairly predictable. After finding a welcome audience for his stance against growth, Pratt quickly proposed a moratorium on development. The moratorium went nowhere, but the City Council in March 2000 did adopt a Growth Management Action Plan. The plan talks about directing urban development to urban areas, preserving open space buffers and farmland, ensuring that infrastructure is in place ahead of development, expanding public transit, and participating in Riverside County's integrated planning process. The city has begun implementing portions of the plan, dedicating resources to the county's planning effort and sending a newsletter to improve communications with citizens. The Growth Management Action Plan also guides city review of development proposals, said Assistant City Manager Jim O'Grady. The city has no shortage of projects to review. Four major developments in various stages of the planning process would add a total of 8,000 housing units. One of those, the 2,000-home, 557-acre Wolf Creek project is due for a decision after several continuances. With the Growth Management Action Plan in place, O'Grady said, the city "reviews projects like Wolf Creek with an even stronger look at traffic and facilities � to make sure facilities are in place concurrently or even before construction." Part of Temecula's plight is not of the city's making. A substantial portion of growth during the 1990s was only the build-out of projects approved years earlier by the county. In some instances the county planned well, and in others it did not and the city has had to compensate after the fact, as exemplified by its $60 million road building program, O'Grady said. Growth in unincorporated areas within Temecula's sphere of influence continues to be an issue because surrounding developments often rely on Temecula roads and because they reduce open space and agricultural land valued by city residents. In January, the Riverside County Planning Commission approved a general plan amendment, zoning change and specific plan for the 1,800-home Tucalota Hills development in French Valley, a lightly developed area several miles north of Temecula. The project approval came despite growing citizen unrest regarding "leap-frog development" and questions from the city about congestion. "I am still concerned that we haven't seen a GPA that we don't like," said county Planning Commission Chairman John Roth, who cast the lone vote against the project. The county is also considering the 1,300-home Morgan Hill subdivision, on the southern edge of the Temecula city limits. The continuing amendments to the general plan are particularly irksome to some people because the county is in the midst of an integrated planning process that seeks to combine land use, transportation and habitat planning into one blueprint for growth. (See CP&DR, February 2000.) Temecula has increased its participation in the county's process since adopting its Growth Management Action Plan. Within the city limits, four proposed housing developments would bring the town close to build-out, at least within the current city limits. Three are fairly typical single-family housing tracts, but one would provide relatively high-density homes to the city's older downtown district. Backers of "Villages at Old Town" propose 1,350 apartments, 150 condominiums and 120 duplexes on 153 acres. The new homes would surround a three-acre "town square" park, according to planning consultant Fagan. "This is a new type of project for Temecula. It's not a suburban development, it is urban in nature and feel," Fagan said. The project would provide housing variety, bring an economic stimulus to Old Town, create a critical mass to encourage public transit and provide at least part of the funding for a much-desired western bypass, Fagan said. A 1998 economic study by Keyser Marston determined that up to 2,000 housing units would compliment Old Town's existing commercial businesses, Fagan noted. However, the last significant multi-family development in town, the Temecula Ridge apartment complex, became a lightening rod during 2000. The City Council rejected the project at first but ultimately approve it after reducing the number of units by 26 to 220. Miod, of Citizens First, and others have questions about Villages at Old Town, especially the traffic it will bring. Miod said city officials have latched onto the New Urbanist concept of "village" development, but they are not executing it. People who live in Villages at Old Town would still have to drive across town to shop at Costco or take the kids to soccer practice because there are no similar facilities nearby, she said. Plus, the project would climb up a prominent hillside adjacent to Old Town, she complained. "People want to have a little bit of open space within their city limits. They don't want to have to get in their car and see what these people are trying to give us, which is a green buffer around town," Miod said. The Growth Management Action Plan does call for preserving open space and creating buffers, as well as maintaining large parcel sizes in rural areas. And city officials boast about the 21 parks that have been built since the city incorporated. Still, Councilman Pratt is not satisfied. "The Growth Management Program is essentially, in my mind, the same as our general plan, and is a political statement to get me off everybody's back," he charged. "The words are there, but the execution isn't." Pratt intends to place on the November ballot an advisory measure that calls for restricting building permits, at least until the city has a better transit system in place. Citizens have also threatened to place on the ballot some type of urban growth boundary initiative, although nothing has qualified yet. "I believe I'm making some progress, but not progress you can see. It's philosophical progress," Pratt added. The election of Pratt and Mike Naggar to the City Council in 1999 clearly helped change the tone of the growth debate in Temecula. Balloting in November could take the city to the next phase in the life of a young, fast-growing city. "We think that we have done a good job of managing growth," Assistant City Manager O'Grady said. "But growth remains a major concern in the community, as it should be." Contacts: Sam Pratt, Temecula City Council, (909) 506-5100. Jim O'Grady, Temecula city manager's office, (909) 506-5100. Pamela Miod, Citizens First of Temecula Valley, (909) 302-6744. Matthew Fagan, Matthew Fagan Consulting Services, (909) 699-2338. Temecula growth management website: http://www.cityoftemecula.org/homepage/GrowthMgmt/GrowthMgmt.htm

A Hollywood property owners association that governs a business improvement district must abide by local government open meeting laws, the Second District Court of Appeal has ruled. The unanimous three-judge panel held that the City of Los Angeles "created" the Hollywood Entertainment District Property Owners Association (POA) to assume the city's legislative functions regarding the Hollywood Entertainment District II Business Improvement District. The court rejected the argument that the POA, which incorporated in 1996, was not a city creation for purposes of a second BID established in 1998.. The Property and Business Improvement District Law of 1994 (Streets & Highways Code §§36600) authorizes cities to establish business improvement districts. The districts can levy property assessments for a variety of public purposes, including building and maintaining parks, sidewalks and pedestrian malls. Cities can create a BID only after property owners who would pay more than 50% of the total assessments sign a petition. On September 3, 1996, the Los Angeles City Council adopted an ordinance creating the Hollywood Entertainment District Business Improvement District (BID I) for a five-block stretch of Hollywood Boulevard. The BID's management plan proposed a program of security, marketing, maintenance and streetscape improvements. Three weeks later, the Hollywood Property Owners Association (POA) filed articles of incorporation as a nonprofit, mutual benefit corporation "to development and restore the public areas of the historic core of Hollywood in order to make it a more attractive and popular destination …" In August 1998, the city adopted another ordinance creating Hollywood Entertainment District II Business Improvement District (BID II), which extended the original bid 10 blocks farther down Hollywood Boulevard. The management plan for BID II identified the POA as the governing entity. Combined, the two BIDs had an annual budget of more than $2 million. The POA's monthly meetings did not comply with the Brown Act (Gov. Code §§54950). The POA did not open its meetings to the public, did not post agendas 72 hours in advance, and did not convene solely within the association's jurisdiction. Aaron Epstein, who owns the 15-shop Artisan Patio within BID II, filed a lawsuit in March 1999 to force POA to comply with the Brown Act. Los Angeles Superior Court Judge Ricardo Torres ruled against Epstein. Torres held that because the POA predated BID II by two years, the association was not a creation of the city; thus, the Brown Act did not apply. The Second District, Division Three, overturned Torres. The appellate panel extensively cited International Longshoremen's & Warehousemen's Union v. Los Angeles Export Terminal, Inc., (1999) Cal.App.4th 287, in which the court held that a private, for-profit corporation organized to design, construct and operate a coal export facility at Los Angeles Harbor was subject to the Brown Act. The city brought the private corporation into being, and delegated to the corporation the governmental authority to development and improve a city harbor, the court ruled. In the Hollywood case, "the issue is whether the POA is a private corporation or entity that was created by City, the elected legislative body, to exercise some authority that City could lawfully delegate to a private corporation or entity," Judge Walter Croskey wrote. "We conclude that here, just as in International Longshoremen's, the private entity, the POA, was ‘created' by City to exercise governmental authority over BID I, authority that City otherwise could exercise. … The POA's sole purpose was to ‘develop and restore the public areas of the historic core of Hollywood.'" The contention that the POA was a pre-existing entity that just happened to be available to govern BID II two years later was an argument of form over substance, the court ruled. "City itself, in the Management District Plan for BID II, explicitly recognized that the POA ‘was formed in 1996 to govern Phase I,' that the POA also would govern ‘Phase II,' and that BID II was just an ‘extension' of BID I," Croskey wrote. "The POA's status as an entity originally ‘created' to take over City's legislative functions was not somehow negated, annulled, or dissipated simply because its role subsequently was expanded by the geographic expansion of the area over which it exercised such functions." The Case: Aaron Epstein v. Hollywood Entertainment District II Business Improvement District, No. B134256, 00 C.D.O.S. 9499, 2000 Daily Journal D.A.R. 12772, filed November 30, 2000. The Lawyers: For Epstein: Dennis Winston, Moskowitz, Brestoff, Winston & Blinderman, (310) 785-0550. For the BID: Andre Cronthall, Sheppard, Mullin, Richter & Hampton, (213) 620-1780. For City of L.A.: Patricia Tubert, Senior Assistant City Attorney, (213) 485-5416

Despite a thin mandate and a deadlocked Congress, incoming President George W. Bush is likely to make significant changes in shaping the federal government's role over California's land resources. In particular, his provocative selection of former Colorado Attorney General Gail Norton as Interior secretary is likely to create a major shift in the way the federal government approaches management of federal lands in California – and may also signal a shift in the way the Endangered Species Act is administered. Norton was by far the most conservative selection for the five key Cabinet posts dealing with planning and development issues. His selections for Agriculture, Housing & Urban Development, Transportation, and the Environmental Protection Agency all appear to be moderates who are unlikely to dramatically alter the direction of federal policy. Two are Californians – Agriculture secretary Anne Veneman and Transportation secretary-designate Norm Mineta, the only Democrat in the Cabinet – suggesting that Bush has placed a high priority on courting California constituencies during his first term. New Jersey Gov. Christine Todd Whitman is a high-profile choice for EPA administrator, while HUD secretary-designate Mel Martinez is a local politician from Florida who is close to the new president's brother, Florida Gov. Jeb Bush. None of the nominees to the five relevant Cabinet posts are white males. Three are women, one is a Cuban-American and the other is a Japanese-American. However, it is probably more relevant to break down the nominees a different way – by discussing the natural resource agencies (Interior and Agriculture), the urban development agencies (HUD and Transportation), and the regulatory agency that straddles urban and resource issues (EPA). Stacked up this way, it appears that the Bush Administration is likely to make a major break from the Clinton Administration only in natural resource issues – and even then the moderate Veneman may serve as a damper on the more conservative Norton. Interior and Agriculture Bush nominated two Western women to the key Cabinet positions on natural resources, but there the similarity appears to end. Norton worked in the Interior Department in the Reagan Administration but has spent most of the last 20 years in state politics in Colorado, serving as the state's attorney general from 1990 to 1998. Veneman, a lawyer who grew up in a Central Valley farming family, worked in the Agriculture Department during both the Reagan Administration and the first Bush Administration, rising to deputy secretary. More recently, she served as director of the California Department of Food & Agriculture under Republican Gov. Pete Wilson. Major environmental groups have launched a high-profile attempt to block Senate confirmation of Norton, claiming she is a disciple of James Watt, the Reagan Administration Interior secretary who favored aggressive exploitation of natural resources on federal land and thus served as the environmental movement's favorite "bad boy." There is no question that Norton is closely allied with the "Wise Use" movement and would represent a major shift in Interior Department policy from her predecessor, Bruce Babbitt. However, she also has a reputation as a smart and capable public official; her fellow attorneys general from both parties selected her to be one of the key negotiators in the multibillion-dollar settlement with tobacco companies. In eight years as Clinton's Interior secretary, Babbitt pursued a steady conservation agenda, moving much more Western land into federal protection and altering federal policy to restrict economic use of federal lands. He also defended the Endangered Species Act against congressional attack with considerable success – largely by shepherding the Natural Communities Conservation Planning effort in Southern California as an alternative method of protecting species while also permitting development. The Endangered Species Act was not amended by Congress during Babbitt's secretaryship. Norton will likely pursue a much different course – in large part because of a different philosophy about the Interior Department on the part of Bush and Vice President Dick Cheney, formerly a congressman from Wyoming. Both Bush and Cheney have been oil executives who favor expanded economic use of federal land. As Colorado attorney general, Norton steadfastly defended states' rights and the rights of property owners. Indeed, the most damaging evidence the environmentalists have dug up on her was a speech in which she said the nation "gave up too much" in terms of states' rights during the Civil War. However, she has distanced herself from the evangelical Watt, for whom she worked at the Mountain States Legal Foundation more than twenty years ago. "A person we worked for 20 years ago does not determine who we are now," she told the Denver Post. "I have a very different style. I work on a bipartisan basis." Indeed, Norton has not criticized the goal of environmental protection. Rather, she has argued in favor of "free-market environmentalism" and states rights. In 1998, she proposed changes to the National Environmental Policy Act to give states and local governments more power. In Colorado, Norton became known for implementing a voluntary self-audit system for corporations seeking to comply with environmental regulations. She also served as chair of the Coalition of Republican Environmental Activists, a group that sought to reclaim the environmental issue from the Democrats. The biggest question for California is whether Norton will hold firm on Babbitt's conservation planning approach to the Endangered Species Act. With a Congress almost evenly split, it is unlikely that the law will be amended any time soon. However, in administrative terms Norton could encourage conservation planning on terms that are more friendly to developers and landowners. It is also likely that, on her watch, the Interior Department will not have friendly relations with the California Resources Agency. During Babbitt's term, his office worked closely with moderate conservationists in both the Wilson and the Davis administrations. At Agriculture, Veneman will likely have a major influence on California – not only because California is the largest farm state but also because she will control the U.S. Forest Service, which oversees how land is used in the state's vast national forests. Both timber production and resort development were severely curtailed in the Clinton Administration. Similarly, Veneman will likely help the Bush Administration figure out how to handle the Bay-Delta water problem, which could affect agricultural land in California. For the last two years, Veneman has been a lawyer with Nossaman Guthner Knox & Elliott, a major California law firm active in endangered species, land use, and water work. HUD and Transportation In picking his Cabinet officers to run the two major urban development departments, Bush went in opposite directions – selecting a well-known, inside-the-Beltway veteran for one slot and a virtually unknown local politician from Florida for the other. However, both appear to come with a strong understanding of the role the federal government plays in shaping urban growth. At the Department of Transportation, Norm Mineta is likely to advocate a continued move toward the reform policies instituted by the Intermodal Surface Transportation Efficiency Act, ISTEA, and continued with TEA-21. As a Democratic congressman from San Jose and chair of the House Transportation Committee in 1991, Mineta played a key role in pushing ISTEA through the House. The two key provisions of ISTEA and TEA-21 are giving regional transportation agencies more power (by taking it away from state transportation departments) and allowing the regional agencies more flexibility in determining how to use federal funding (permitting them to shift some highway money to public transit, for example). The state highway departments and other highway lobbyists have fought hard – but unsuccessfully so far – to reverse this change in policy direction. When TEA-21 comes up for reauthorization later this year, all these issues will undoubtedly bubble to the surface again. While it might seem that a Bush Administration would be more hospitable to highway spending, it is worth noting that the original ISTEA was signed by Bush's father, who accepted the bill in the fall of 1991 – just as a recession was coming on – and promoted it as a "jobs bill". It may be that Mineta will be able to help ISTEA's defenders hold on to the policy reforms this year. It is less clear whether Martinez will continue – or reverse – the reforms made in public housing and community development by his predecessors in the Clinton Administration, Henry Cisneros and Andrew Cuomo. Cisneros reformed public housing with the HOPE VI program, which promoted replacement of high-rise public housing with low-rise, mixed-income projects. More recently, Cuomo had been promoting the "New Markets" idea, which held that American business should focus on inner-city areas because they are underserved markets. Martinez, a Cuban immigrant, was a surprise choice for HUD; most observers had expected Bush to pick Steven Goldschmidt, the moderate Republican mayor of Indianapolis. Martinez has relatively little public experience, having served as chairman of the Orange County Housing Authority in Orlando, Florida, during the 1980s and then one term as chairman of the Orange County board. Martinez caused some ruckus last year when he took a hard line against developers in Orange County, demanding full school mitigation for new residential projects and opposing two developments on that basis. However, he also chaired Jeb Bush's recent Growth Management Study Commission, which recommended a weakening of the state's growth management law. In particular, the commission called for reforming the state's "Development of Regional Impact" process, giving more power to local governments in reviewing projects that may have cross-jurisdictional impacts. Environmental Protection Agency Gov. Christine Todd Whitman of New Jersey was widely hailed as the best-known politician ever to take the EPA Administrator job. (Her predecessor, Carole Browner, was a relatively unknown Gore staff member who had been an environmental official in Florida.) Environmentalists generally accepted her appointment – especially compared to the selection of Norton as Interior secretary – but it is unclear how much she will change course from the Clinton Administration. Some environmental groups criticized Whitman for cutting environmental regulation programs in New Jersey and a few argued that she would be a friend of corporate polluters. However, as New Jersey's governor, Whitman strongly supported both brownfields redevelopment (which Bush advocated in his campaign) and open-space preservation. Whitman successfully promoted a statewide goal to set aside 40% of New Jersey's land in permanent open space and passed a $1 billion bond issue for land acquisition. She even committed some state bond money to purchase land in New York State to protect New Jersey's watershed. During the Clinton Administration, EPA gained a reputation as an aggressive promoter not only of brownfields redevelopment but also of "Smart Growth;" the agency coordinated a national network of Smart Growth activists, which was sometimes criticized by conservatives as a "cabal." It is unclear whether Whitman will retain or dismantle the Smart Growth program

For more than a century, commercial and residential development has been consuming the wetlands, tidal flats and beaches surrounding San Francisco Bay, the largest and most biologically rich estuary on the West Coast. Now, those same development forces may help reverse the trend, making possible the restoration of thousands of acres of critical wildlife habitat. Although one would assume that environmentalists welcome the change, the prospect has not been embraced wholeheartedly by the Bay Area's green community. That is because the deal involves commercial tradeoffs, an increasingly common conservation tactic as property values rise and pressure to develop open space increases in California. To obtain the land and raise the money needed to restore it, conservationists often must accept commercial projects they might otherwise oppose. It is a choice between pragmatism and ideological purity. The most significant restoration proposals affecting the Bay grow out of a desire to expand two of the area's most critical transportation hubs: San Francisco International Airport and the Port of Oakland. The airport is notorious for chronic flight delays caused by bad weather. Its four parallel runways are separated from each other by only 750 feet; the Federal Aviation Administration requires 4,300 feet between simultaneously landing planes when visibility is impaired. Consequently, fog or clouds force the airport to shut down two of the runways. The resulting delays have given SFO the worst on-time record of any major U.S. airport and send ripples throughout the nation's air traffic system. The situation is a civic embarrassment for San Francisco, and the congestion and delays have profound economic consequences. Forty million airport visitors contribute $10.7 billion to the local economy each year, and the products of Silicon Valley's high-tech manufacturing establishment increasingly rely on air transport to reach global markets. Passenger traffic is projected to increase to 51 million a year during the next five years. Airport officials have proposed replacing two of the runways, building the new ones a mile farther into the bay. That would require filling nearly two square miles of the bay. A few decades ago, this would not have been difficult to accomplish. According to the Audubon Society, the area of open water at high tide downstream from the Sacramento-San Joaquin River Delta has decreased since the Gold Rush era from 516,000 acres to 327,000 acres. Of the original 23 miles of sandy beaches ringing the bay, only seven remain. Tidal marsh has decreased from 190,000 acres to 40,000 acres, and 50,000 acres of tidal mudflats have dwindled to 29,000. Altogether, 137,000 acres of baylands (the area between the lines of high and low tide) have been diked and 50,000 acres have been filled. The consequences of shrinking the bay have been profound for the creatures that rely on these rich, energetic biological systems. About 500 species of fish and wildlife call the baylands home, and 20 of them are listed as threatened or endangered. Concern about continuing encroachment into the bay led in 1968 to the state Legislature's creation of the San Francisco Bay Conservation and Development Commission (BCDC). The commission was given the authority to approve or deny proposals to fill the bay. While it has occasionally approved small projects, the commission has generally required builders to offset each acre of fill with two acres of restored habitat elsewhere. Filling two square miles of the bay for runway construction poses a substantial mitigation challenge. And Bay Area environmental groups have been extremely critical of the proposal. Looking for a restoration opportunity big enough to satisfy their critics, airport officials found their eyes drawn to a vast complex of salt-production ponds along the south end of the bay in San Mateo, Santa Clara and Alameda counties. Acquired by Cargill Inc. in 1975 when it purchased the Leslie Salt Co., the 19,000 acres of ponds were once part of the bay, but were diked off from it more than a century ago. In 1999, Cargill began negotiating with state and federal agencies to sell the ponds for restoration as wildlife habitat. The asking price: $300 million, which would make it the second-largest state-federal land acquisition in California history (the Headwaters Forest deal, at $480 million, was larger). Negotiations picked up speed last year when San Francisco officials hit on the idea of using the state-federal purchase of Cargill's ponds as leverage for airport mitigation. (See CP&DR September 2000, CP&DR Economic Development, January 1999.) With the help of Mayor Willie Brown, the former Assembly speaker, they persuaded the Legislature to approve and Gov. Gray Davis to sign a bill authorizing $25 million in state funds for the purchase. Last October, the federal government agreed to chip in $8 million from the Land and Water Conservation Fund. Airport officials have said they have $200 million to spend on the restoration, and more state money could be authorized this year. A similar commercial tradeoff is in the works related to expansion of the Port of Oakland. The nation's fourth-busiest commercial harbor plans to dredge 13 million cubic yards of sediment from the shipping channel, deepening it to 50 feet and allowing it to handle larger container ships. In December, the port won approval from the BCDC to deposit 1 million cubic yards as a base for dockside construction, pump 7 million cubic yards into the Middle Harbor area to create 200 acres of shallow eelgrass habitat, and send 5 million cubic yards to wetlands restoration sites in Marin and Solano counties. The ecological opportunities made possible by the airport and port expansion projects are significant. Still, many environmental organizations continue to oppose the idea of using restoration of the salt ponds as compensation for the loss of so much bay. Wetlands and open water are not ecologically equivalent, they note, and the airport should explore other alternatives. Still, an opportunity like the Cargill purchase does not come along very often. The company has, in fact, suggested it would be interested in selling its 19,000 acres for development if public agencies aren't willing to buy the property, meaning the opportunity to restore them would be lost. It is unlikely that the political muscle required to squeeze $300 million out of state and federal coffers will be exerted on behalf of a straightforward habitat purchase. Degraded marshland is not exactly an awe-inspiring redwood forest, and without the vested economic interest connected to a more reliable airport, chances of repeating the publicly popular Headwaters deal are slim. If Bay Area conservationists are to have any realistic hope of securing such a vast piece of bayfront land, they may have to accept the tradeoff. Contacts: San Francisco Estuary Institute: http://www.sfei.org/ Audubon Society, Golden Gate chapter: http://www.goldengateaudubon.org/Conservation/SFOExpansion.htm San Francisco International Airport: www.sfoairport.com/