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The state Supreme Court has agreed to hear its first California Environmental Quality Act case in three years. The state's high court also agreed to review a significant brownfields case, and to let stand a controversial CEQA ruling involving water and local general plans. The court accepted for review Friends of Sierra Madre v. City of Sierra Madre, No. S085088, in which the Second District Court of Appeal invalidated an election because the city violated CEQA. (See CP&DR Legal Digest, January 2000.) The court said the city's act of placing on the local ballot a measure to remove 29 properties from the city's Register of Historic Landmarks was a "project" under CEQA. Unlike a citizen's initiative, the council's discretionary action to place the city-sponsored measure on the ballot is subject to CEQA, the court ruled. The city put the measure on the ballot specifically to avoid CEQA review, and argued in court that CEQA did not apply. The city also argued that CEQA did not authorize the court to throw out election results. Four of seven state Supreme Court justices — Chief Justice Ronald George and Associate Justices Marvin Baxter, Ming Chin and Janice Brown — voted to hear the case. It will be the court's first CEQA case since it decided in August 1997 that de-listing a species under the California Endangered Species Act is not exempt from CEQA, but that CESA procedures provide a functional equivalent to CEQA. (See CP&DR Legal Digest, August 1997.) The court decided not to hear a more far-reaching CEQA case, League to Save Sierra Lakes v. El Dorado County Water Agency, No. C027948 (see CP&DR Legal Digest, January 2000). In that case, the Third District Court of Appeal threw out an environmental impact report for a water project because the EIR was predicated on El Dorado County's draft, unadopted general plan. The court also ruled the proposed purchase of three reservoirs by an irrigation district was subject to CEQA review, the Federal Powers Act does not preempt CEQA, and the EIR inadequately described baseline conditions. Only Justice Baxter wanted to hear the case, which has drawn interest of CEQA practitioners and observers. The brownfields case the court unanimously decided to accept is Certain Underwriters at Lloyd's of London v. Los Angeles County Superior Court, No. S084057, (see CP&DR Legal Digest, December 1999). In that case, a divided three-judge panel of the Second District Court of Appeal said an oil company's insurer had no responsibility to pay for state-mandated remediation of polluted industrial sites or pay administrative fines. The court said insurance companies had a responsibility in regards only to lawsuits in the most technical sense. In a dissent, Appellate Justice Richard Aldrich said the ruling would slow clean up of the environment.

An 11-square-mile portion of the northeast San Fernando Valley could become the City of Los Angeles' largest redevelopment project area. Planners have been at work on the project for about three years, and the City Council is expected to decide whether to create the project area this summer. However, the area is so large — and suffers from such widespread decay — that some people wonder whether a redevelopment project can provide meaningful change. While other cities have giant redevelopment project areas where the amount of true blight is debatable, no one doubts that this corner of the San Fernando Valley meets the definition of "blight." Tim Dagodag, coordinator of the Urban Studies Department at California State University, Northridge, said, "That area is not ill-chosen." Population densities are high, people often live in ancillary buildings, jobs pay little, health and safety issues exist, and streets, lighting and drainage are substandard, he said. Those are problems redevelopment is designed to address, he pointed out. Furthermore, the area's per capita income of $9,266 is only 57% of the city average, according to the city's Community Redevelopment Agency (CRA). Property values in the area dropped about 10% from 1994 to 1998, while values remained about even citywide, and home sale prices in the area declined by 16%. But whether implementation of the proposed Northeast San Fernando Valley Redevelopment Project is the solution remains an unanswered question. Staff members, with guidance from a public advisory committee, are still examining conditions, working on a project area plan, considering financing options, and developing a work program, said Robert Fazio, a senior city planner and the project coordinator. The CRA has laid out rough plans for a $490-million, 40-year project that would add about 1,600 residences, rehabilitate many more, provide about 2 million square feet of industrial and commercial space, and bring about 3,600 new jobs. The CRA continues to receive criticism as an under-performing agency, and city leaders have reduced the CRA staff by about a one-third. Several top-level administrators have been forced out or left of their own accord during the last year, and some city councilmembers make no secret they want more control over the agency. "There has been some mixed reaction," to the Northeast Valley redevelopment proposal, said Gerardo Guzman, of the Mexican-American Political Association's San Fernando Valley office. The area's poor residents have not received the benefits of prior government programs, and they are unsure the CRA can properly administer a redevelopment project. "The residents want something to happen. They want the change," Guzman said. "In concept they are in support, but they are skeptical of the details." Among the details is the practicality of a 6,835-acre — nearly 11 square miles — project area. "We are not proposing large-scale redevelopment, but, rather, spot infill development that will have catalytic effects," Fazio said. He conceded that planners have recommended shrinking the project size because examining the range of issues over such a broad area on a timely basis is exceedingly difficult. The sheer size of the territory and diversity of neighborhoods makes a well-rounded approach difficult to craft, he said. And only two CRA staff members area assigned to the project full-time. But the project's scope has become a political issue — one with which the CRA Board of Commissioners and the City Council are likely to wrestle later this year. Guzman said not everything in the entire 11 square miles is blighted. "I think at the end of the day, we'll see a drastic reduction in the scope of the project," he predicted. Dagodag said almost any community within the proposed project area could be a redevelopment project of its own. Such a large project area could keep some segments of the community from receiving proper representation on advisory committees, Dagodag warned. He also worried that funding would get watered down so that only cosmetic improvements would be possible. "I think it will be a viable project, but I have some questions about the size of it. It's gigantic," he said. The proposed project area takes in all or parts of Mission Hills, Pacoima, Arleta, Sun Valley and Lake View Terrace — formerly suburban districts of Los Angeles that now show signs of urban blight and poverty. "The area is exceedingly overcrowded," Fazio said. "It's common for a one-bedroom apartment to support up to seven unrelated adults, with a three-bedroom unit supporting three whole families. … The area has pockets of residential uses that could best be described as squalor. There are some trailer parks in Pacoima and Sun Valley that are notorious." And the horrid living conditions are not necessarily inexpensive. Fazio said the agency has found people paying $900 a month to rent a single-wide mobile home, or $400 a month for a single motel room on a dirt road next to a factory. Conflicting land uses, in fact, are a substantial problems, Fazio said. The area has numerous gravel quarries, batch plants, automobile wrecking yards and other heavy industrial facilities. Oftentimes, homes of some sort are right next door. Residents are exposed to extreme environmental conditions, and childhood asthma rates are very high in some areas, he said. The redevelopment project could mitigate some of these land-use conflicts by either forcing one of the users to relocate or by helping landowners retrofit homes. Years of infrastructure neglect are evident. A CRA study found 53% of the area's 6,800 parcels lie on deteriorated streets, and 42% of parcels — including some schools — abut deteriorated or missing sidewalks, curbs and gutters. Parks are few in number and equally neglected. Even police patrols are reported to be below the city's average. Still, the area's large industrial base and the number of small businesses are assets on which the CRA hopes to build. The redevelopment project could provide funds to businesses for modernization and expansion, which would keep businesses competitive and let them add jobs, Fazio said. Ideally, these businesses would employ local residences, he said. A 23-member public advisory committee began work on the project in January 1998. However, because interest in the committee waned, the city conducted a new election at a meeting last December. So the majority of the committee members is new. But MAPA's Guzman and other observers see the committee as a major supporter of redevelopment. Indeed, Councilman Alex Padilla, a proponent whose district includes the project area, helped elect the new committee members. Dagodag, of CSUN, credited Padilla, a first-term councilman, with at least taking an interest. "Over the decades, that area has been neglected. The effort is late in coming and it's remedial," Dagodag said. Questions still remain regarding project area financing, eminent domain, and other aspects, Fazio said. Those will need to be resolved before the City Council makes a final decision. And Guzman raised an interesting social concern. Redevelopment, he said, could jeopardize the community of Pacoima's ability to serve as a first stop for new immigrants. Now, Pacoima provides homes and jobs to many Latinos who have recently come to the United States, said Guzman, who grew up in Pacoima. Once they get established, these people move on. A CRA-backed gentrification could close Pacoima's door to future immigrants, he said. Contacts: Robert Fazio, Community Redevelopment Agency, (818) 623-2128. Gerardo Guzman, Mexican-American Political Association, (818) 837-2272. Tim Dagodag, CSU-Northridge Urban Studies Department, (818) 677-2904.

A city is not liable for damages sustained because it failed to record a notice that a property was in a known landslide zone, despite a city ordinance requiring such recordation, the California Supreme Court has ruled. In a case watched closely by many California cities and counties, the state Supreme Court ruled 6-1 that the City of Los Angeles was not liable when the 1994 Northridge earthquake caused a landslide that destroyed a house in Pacific Palisades. Justices did not dispute landowner Paul Haggis' claim that he would not have purchased the property if the city had recorded the notice of substandard condition. But, the court ruled that the city's failure to record the notice did not violate any duty of care to Haggis because the municipal code was intended to protect general public health and safety. The majority also held that the city was immune from lawsuits arising out of building inspections. Haggis purchased a $2 million-plus home on the Pacific Palisades bluffs in 1991 but apparently was unaware of the property's long history. A city-sponsored study in 1959 found that coastal bluff was vulnerable to landslides, and in 1966 a landslide destabilized part of the property. The city then ordered the owner to vacate the property and stabilize the site, as required by Los Angeles Municipal Code §91.0308(d). But the county failed to record a notice of substandard condition with the county recorder, as mandated by the same code section. In 1970, the city again ordered the landowner to abate the landslide hazard. Later that year, the county issued permits to demolish portions of the existing residence and to rebuild farther from the damaged bluff. At the same time, the city did not demand either an affidavit stating the owner was aware of the unstable conditions, or require a landslide stabilization plan — even though the municipal code required such documents. The city issued several building permits during the 1970s and even allowed Caltrans to remove slide debris as part of a fill project. Still, the city never required geologic studies or recorded the notice of substandard condition. The Northridge earthquake destroyed the house and left the property unusable. Haggis filed suit seeking more than $3.5 million in damages, plus compensation for emotional distress. Los Angeles County Superior Court Judge David Finkel and the Second District Court of Appeal rejected the lawsuit on a demurrer. The hearing before the state's high court drew amicus briefs from 136 cities, the California State Association of Counties, and the state Attorney General. The court ruled that city liability required an obligatory action, not a discretionary or permissive action, and that the obligatory duty must be designed to protect against the kind of injury suffered by the plaintiff. The court ruled that the Municipal Code did not "create a mandatory duty of enforcement," it only authorized the city to use particular enforcement tools. "We agree with the City that the probable purpose of the ordinance's recordation requirement is to encourage the landowner to undertake necessary stabilization work, for if he or she does not do so, a recorded certificate of substandard condition will seriously impair the value of the property for possible sale or security," Justice Kathryn Werdegar wrote for the court majority. "… Municipal Code §91.0308(d) exists to protect the public against unsafe building and land conditions, not to regulate the marketing of real estate." Moreover, Government Code § 818.6 grants local governments immunity for making an inadequate or negligent inspection, the court ruled. "To impose liability for failing to record the result of the inspection would frustrate the purpose of the immunity statute," Werdegar wrote. The inspection immunity was key to other jurisdictions' interest in the case. If governments were liable for inspection errors, they would be greatly discouraged from performing inspections, the cities, counties and Attorney General argued. Justice Stanley Mosk dissented. He said that the city had a mandatory duty that was intended to protect precisely the type of injury Haggis suffered. "The warning that recording provides to potential purchasers and lenders is an integral part of the legislative scheme," Mosk wrote. The Case: Paul Haggis v. City of Los Angeles, No. S074364, 00 C.D.O.S. 1897, 2000 Daily Journal D.A.R. 2611, filed March 9, 2000. The Lawyers: For Haggis: Pamela Schmidt, Berger & Norton, 310 449-1000. For the city: William Waterhouse, assistant city attorney, (310) 732-3750.

Frank Taylor served as executive director of the San Jose Redevelopment Agency for 20 years before retiring in 1999. Prior to his work in San Jose, Taylor held a similar job in Cincinnati. A Boston native, he is a graduate of the University of Cincinnati's School of Architecture. With a tight control over the Redevelopment Agency, Taylor's task was to revive San Jose's downtown, from which developers, businesses, residents and even city government had been fleeing since the 1950s. At times he clashed with historic preservation advocates, merchants, landowners and elected officials, including current Mayor Ron Gonzalez. But no one can deny that downtown San Jose has become an important part of Silicon Valley. CP&DR What's the proper role of a redevelopment agency? Taylor It is basically to go where no one else will go and do development. It is to take the tough projects that no one else will do, to create jobs and raise the tax base. … I had an additional criterion, and that was the City Beautiful, to make people feel good about their city. And, of course, there was industrial development. So it's not just construction jobs, it's permanent jobs was well. CP&DR What was downtown San Jose like 20 years ago? Taylor It was a regional embarrassment and a national joke. San Jose and Cleveland were often talked about at the same time. CP&DR Downtown seems like a vital place now. Taylor It's a work in progress. The foundation is in place. Future development won't need as much economic assistance as previous businesses. The other role that redevelopment had in downtown was to complete the freeway system. The downtown was not connected to the freeway system. That's very rare. The reason we were able to do all this is we were able to merge our bankrupt redevelopment areas with our industrial redevelopment areas and bond for the funds, the tax increment. CP&DR How does a redevelopment agency measure success? Taylor You measure success a lot of ways — the jobs created, the tax base. Those are pretty straightforward. The other way is pride in your community, people feeling good about where they live. I mentioned the City Beautiful. Then you need a place for children. They were in all our plans. Then, as I began to age, I worried about the elderly. … Redevelopment is not just about the buildings themselves, but the spaces between them — parks, plazas, walkways. We had three areas of focus: the plaza in the center of the city — that included the Fairmont , the art museum and the convention center; Guadalupe River development; and the civic center. CP&DR What pitfalls exist for redevelopment agencies? Taylor The pitfalls for us were the economics and lack of confidence. … The lack of investment was really very, very hard to overcome. And the possibility of being able to make more with your dollars in the suburbs than in downtown was very strong. And I had to fix up the infrastructure, which had been badly neglected for years. Retail is still the most difficult because the city is surrounded by retail shopping centers that compete for the development. They have been able to expand their facilities. I didn't want them to, but I lost that battle. CP&DR Where does housing fit in? Taylor The other thing that's important is housing, market-rate housing that you can't distinguish from affordable housing. I didn't want to build affordable housing apart from market-rate housing. I emphasized homeownership, condominiums if I could get that. We've built about 1,500 units, but we need a lot more, 5,000 to 10,000 units. CP&DR What was your biggest success? Taylor You know, the hardest deal to do was the Fairmont, and in conjunction with that was the convention center, because that was the first big deal. That was important to do because it lifted the quality for San Jose. People came into the Fairmont and walked around and saw that San Jose was not second class. Adobe was the first corporate headquarters to locate downtown. And Knight Ridder was the second. That's something nobody thought of in 1980. CP&DR What would you do differently? Taylor I would have waited on the retail until there was more housing built. I would not have tried to incorporate the amount of retail into the Plaza, which was part of the Fairmont project. I would have phased it in more. And I would have pushed light rail a little more. I lost that one I should have outreached more myself with the historic preservation people. I didn't want to save buildings for plywood. I wanted to save buildings for their use. The De Anza Hotel is still a hotel. … We saved a lot of historic buildings, but we battled over about two or three major projects, and that got the program sidetracked. And I would have shaved off my beard earlier. I originally grew it to make myself look older. CP&DR Can a city be revitalized without a redevelopment agency? Taylor If it has the economics and the market forces, yes. … But if a city suffers all the external forces and has been neglected, you need a program to get it to come back. I'm encouraged. I think the market in San Jose is much stronger. You're going to see less subsidies or maybe even no subsidies for office projects downtown. … Redevelopment programs need to be decisive, risk-taking programs. CP&DR Do you recommend any changes to the Community Redevelopment Act? Taylor I think they ought to leave redevelopment alone. There are time limits on it. Redevelopment should not be forever in any city.

Among the hardest dictums for regulatory planners to swallow is this: possession is 90%. Nonetheless, it's a truism not lost upon a growing number of state conservancies, which have shown that acquisitions are among the best ways to safeguard California's natural resources and open spaces. And even though there has been grumbling about a perceived bias for funding of north state acquisitions over Southern California ones, recent history does not appear to support the complaint. The state's oldest conservancy is the Wildlife Conservation Board, the purchasing arm of the Department of Fish and Game. The WCB buys habitat and linkage corridors with the express goal of preserving sensitive habitat, restoring habitat, and providing public access to areas for fishing and hunting. Since its inception in 1947, the board has purchased more than 630,000 acres, a land area almost the size of Sacramento County. No summarized inventory of the acreage of projects based on a north-south split exists. But a review of projects by county might raise the question of whether there is a preponderance of WCB projects in Northern California. Arguments about north-south resource sharing loom large in California's history. But Executive Director John Schmidt scoffs at the idea that the WCB's acquisitions have been imbalanced. "You have to look at the cost of the project verses the resource gains," said Schmidt. "We look at the cost and benefit of acquisitions all over the state." Although geography is understood as a background factor in purchasing decisions, conservancy planners strive to rise above regionalism. Still, in the expenditure of public moneys, politics are unavoidable. Conservancy officials all agree that land costs and population-based political power are both greater in Southern California. They also acknowledge the historical predominance of state offices and their professionals in the north. And that may have led to some imbalance in acquisition efforts in the past. Take, for example, DFG's regional office distribution. Of six regional offices, four serve Northern California. And because the acquisition recommendations using WCB funds are forwarded out of the regional offices, it could be argued that 66% of the projects considered likely come from the four northern regions. But Schmidt is quick to point out that all the state's resources are valued, and that favoritism plays no part of the picture. He cited the Santa Rosa Mountain project in the Riverside County desert as a case-in-point. The ongoing effort, begun in 1975 to protect Bighorn Sheep habitat, has resulted in the single largest property acquisition on the WCB's ledger — a total of 28,000 acres secured in the steep terrain southeast of Palm Springs. But intangible evidence of bias still lingers. Schmidt himself remarked that "there's not much open space in LA County," ignoring the fact that only half of the populous but expansive jurisdiction is actually urbanized. A visit to the Board's web site highlights four current partnership acquisition projects — every one of them in Northern California. Just as the WCB is tied to the Department of Fish and Game's official goals, the Coastal Conservancy implements the California Coastal Act and answers to the Coastal Commission. A look at Coastal Conservancy activities appears to flatly dispel any notion of a northern bias. Though no formal inventory of land acquisition exists for the agency, recent purchases in the south state speak for themselves. In March, the Conservancy announced two major Ventura County acquisitions, the Ormond Beach wetlands and the Mandalay Dunes. According to California Coastal Conservancy spokesman Dick Wayman, the $17 million Ormond Beach purchase of some of the last Southern California coastal wetlands represents the largest expenditure on one project during the agency's 20-year history. Coastal Conservancy Planner Peter Brand suggests that the emergence of two circumstances gave rise to the Southern California Wetlands Recovery Project, a unique regional effort being carried out by the well-regarded land trust. First, a broad public understanding of the importance of wetlands developed, driven in part by federal Clean Water Act implementation that has raised coastal wetland protection to the top of the Conservancy's agenda. Highly publicized development battles over Bolsa Chica in Orange County and Playa Vista in Los Angeles underscore the public concern over wetland development. Second, the emergence of substantial sums of money from Southern California port expansions — required by environmental permit conditions — has leveraged Conservancy acquisition efforts. And, as Brand admitted, the south state has powerful friends in Sacramento these days. Both Gov. Davis and Resources Secretary Mary Nichols forged their political careers in Los Angeles. As conservancies gain strength, regional rivalries will probably dwindle —– in direct relationship to Southern California's growing political clout. Of four new regional state conservancies adopted by the Legislature during the last five years, three are in the south state. Regionalism aside, land acquisition for conservation is immensely popular. "People understand that conservancies are a successful model of how to protect and manage land resources," said the Coastal Conservancy's Wayman. The rise in land trust support and power is none too soon. "People in our business," said Brand, "realize that this is the last best chance to save these resources."

Insurance companies might have to pay hundreds of millions of dollars to clean up the Stringfellow Acid Pits, a notorious toxic waste dump in Riverside County, the Fourth District Court of Appeal has ruled. In a complex ruling that combines state water law with liability insurance coverage definitions, the court ruled that the State of California "owns" all of the groundwater under the surface of the state, but not within the traditional definition of property ownership. Thus, the ownership exclusion of typical liability insurance policies does not apply, the court ruled. "The State ‘owns' the groundwater in a regulatory, supervisory sense, but it does not own it in a possessory, proprietary sense," Justice Art McKinster wrote for the unanimous three-judge panel. "This being so, it is apparent that the ‘owned property' exclusion, which we believe we can safety say normally applies to property owned by the insured in the manner defined by the Civil Code, is not clearly applicable here." The appellate panel reversed a Riverside County trial court ruling and remanded the case for further proceedings "to resolve the ambiguity inherent in the policy language." Jennifer Hernandez, a brownfields attorney for Beverage & Diamond in San Francisco, said the ruling probably does not have a significant effect on other brownfields cases. "Stringfellow remains the poster child for the complicated, very litigious site," said Hernandez, who is not involved in the lawsuit. She noted, though, that insurance companies and landowners in other states have tried to escape liability for pollution of groundwater on the basis that they only insured (or owned) the surface property. That argument, just now making its way to California, has failed elsewhere, Hernandez said. The Stringfellow site was a state-licensed facility where industries dumped millions of gallons of liquid wastes for nearly 20 years until 1972. Various parties have been arguing about who is responsible for cleaning up the site, which is on the federal Superfund list, since the 1980s. The estimated cleanup costs have reached $500 million. In 1995, a federal district court ruled that the state is mostly liable for the cleanup. The state has since turned to companies that issued various insurance policies, leading to the lawsuit considered by the Fourth District. At the trial court, insurance companies convinced Superior Court Judge Stephen Cunnison that the "owned property exclusion" existed in this case. Under that principle, an insured does not receive payment for loss or damage to property it owns. (For example, automobile liability insurance does not cover the insured person's vehicle; for that, the motorist needs collision and comprehensive coverage.) Because Cunnison ruled that the state owned all the groundwater, the state's insurance companies were not liable for the expensive cleanup of Stringfellow. On appeal, the state argued that state Water Code §102 and Civil Code §§669-670 establish more of a philosophical view, rather than a proprietary interest in the water. Hence, the owned property exclusion would not apply. The appellate court agreed, saying that what matters in California is not water ownership but water rights. Several cases have made clear that although the state has the supervisory authority to regulate water, the state is bound by the same water rights regulations that apply to private landowners, the court ruled. In other words, the state cannot simply assert ownership and take all the water it wants. "Read in context with provisions and decisional law relating to water use, the Water Code provisions simply do not result in anything recognizable as ‘ownership' as the term is commonly understood," McKinster wrote. " he state's power under the Water Code is the power to control and regulate use; such a power is distinct from the concept of ‘ownership' as used in the Civil Code and in common usage," McKinster continued. The Case: State of California v. Superior Court of Riverside County, No. E025472, 00 C.D.O.S. 1704, 2000 Daily Journal D.A.R. 2281, filed March 1, 2000. The Lawyers: For the state: Darryl Doke, supervising deputy attorney general, (916) 324-5374. For Underwriters at Lloyds of London: John Holmes, Barger & Woven, (213) 680-2800.

A Nevada County landowner cannot prevent the public from using a dirt road across his property, as public access to the road was established prior to a 1972 state law that greatly limited prescriptive easements, the Third District Court of Appeal has ruled. The public acquired — under the manner outlined by State Supreme Court rulings — the right to walk, run, cycle and ride horses on a dirt road adjacent to a Nevada Irrigation District (NID) irrigation canal on property owned by Jon Blasius, the appellate panel ruled. The court rejected contentions that a public easement would conflict with the NID easement for the canal, and that Blasius and previous owners were prevented by NID from blocking public use of the road. The Rattlesnake Canal, one of many owned by the Irrigation District, was constructed during the 1920s. A nine-foot wide dirt road runs next to the ditch for many miles as the canal snakes through the Sierra foothills. A 240-foot-long section of the canal and adjoining road crosses Blasius' property near Grass Valley. From 1957 to 1981, a previous property owner allowed the public to use the canal road. Through a string of sales, deaths and marriages, Blasius and his wife, Robin, obtained the property in August 1996. They quickly blocked the road with locked gates at either end of their property. Only they and NID have keys, and the landowners denied passage to members of the public. A year later, a group called Friends of the Trails sued Blasius and the Irrigation District. Friends sought to quiet title to a public easement for recreational purposes, and sought injunctive and declaratory relief. During a trial, 19 witnesses testified that they and others used the canal road from the 1940s through 1971 for recreational walking and running, riding bicycles and horses, fishing and as a route to school. None of the witnesses had ever asked permission to use the road or had been asked not to use the road. Retired Nevada County Superior Court Judge Wayne Wylie, sitting by assignment, ruled that the public had acquired title to "an easement for public right-of-way and recreational purposes across the property presently owned by Jon and Robin Blasius." Wylie enjoined the landowners from obstructing access, but made no ruling against the Irrigation District Blasius and NID appealed on a variety of grounds. They argued that Judge Wylie improperly applied the California Supreme Court's Gion-Dietz doctrine concerning adverse possession. The Gion and Dietz cases, Gion v. City of Santa Cruz (consolidated with Dietz v. King) (1970) 2 Cal.3d 29, deal with public easements to shoreline properties. The state high court held that to prove adverse possession, a litigant need only "provide evidence that persons have used the land as they would have used public land" without interference for at least five years. For the landowner to prevent future public use, "he must either affirmatively prove that he has granted the public a license to use his property or demonstrate that he has made a bona fide attempt to prevent public use." Finally, the court said there is no difference between dedication of shoreline property and other property. The appellate panel noted that Gion-Dietz was controversial, as it led to legislation in 1972 that halted future use of the implied dedication doctrine unless the government maintained the land for public use or the property was within 1,000 feet of coastal waters. (See Civil Code §§1009, 813.) To Blasius and the Irrigation District, Gion-Dietz remained controversial, as they argued the decision was "troubling" and had "malignant effects." "We are invited to ignore a settled precedent," Justice Coleman Blease wrote for the unanimous three-judge appellate panel. "We decline to do so. It is accurate to say the enactment of §1009 and the related amendment of §813, in large part, abrogates the holding in Gion-Dietz — prospectively. However, there is no public policy manifest in this enactment which restricts the application of that holding to claims preceding March 2, 1972." The Nevada County case clearly satisfied the Gion-Dietz criteria, the court ruled. "There was a considerable body of testimony from members of the public who used the canal side right of way that they did so in the belief the public a had a right to do so. The owner of the property during the pertinent period conceded he was aware of public use of the berm road and that it was his belief the public had a right to use the trail," Blease wrote. "The Gion-Dietz opinion plainly contemplates that ‘adversity' for purposes of implied dedication may arise as to recreational pedestrians in rural areas," Blease continued. The court also rejected the argument that the doctrine of prescription does not apply to a public entity, such as NID, which has an easement on the same strip of land. The public's use of the dirt road does not interfere with the district's easement, the court said. The court also ruled that a state law protecting a public entity's property rights (Civil Code §1007) does not apply in this case because "it has no application to the loss of rights of an underlying private owner." Finally, the court rejected Blasius' argument that application of Gion-Dietz was unfair because the Irrigation District easement prevented previous landowners from blocking public use. The court said Blasius did not prove this contention. "Indeed, on the practical plane, the Landowners' predecessor in interest presumably could have obtained the same agreement from NID to install the gates in issue before the lapse of the prescriptive period," Blease wrote. The appellate panel rejected a Friends of the Trails' appeal seeking an injunction to prevent the Irrigation District from barring public access. The court simply concluded that, "the judgement is binding on NID. They are precluded from maintaining there is no public easement as described." The court also upheld the trial court's award of attorneys' fees to Friends of the Trail. The Cases: Friends of the Trails v. Jon E. Blasius, Nos. C031330, C032253, 00 C.D.O.S. 1583, 2000 Daily Journal D.A.R. 2193, filed February 28, 2000. The Lawyers: For Friends: John Bilheimer, Haley & Bilheimer, (530) 265-5524. For Blasius, Eric Grant, Pacific Legal Foundation, (916) 362-2833. For Nevada Irrigation District: William Spruance, Minasian, Spruance, Baber, Meith, Soares & Sexton, (530) 533-2885.

Business owners, labor leaders and housing advocates have formed an alliance to promote a package of nine bills intended to ease the approval process for new homes near job sites. The bills would, variously, modify the California Environmental Quality Act, provide financial incentives to local governments, address liability hurdles to construction of condominiums, and even allow additional analysis of growth-control initiatives. The coalition has formed because of the affordable housing shortage in the Bay Area and other portions of the state. However, environmental groups argue that development interests are only using the housing crunch as an excuse to target regulations that have long been unpopular with builders. The package of housing bills is only a portion of the land-use legislation proposed at the Capitol. While few people expect lawmakers to pass dramatic reforms, incremental changes to housing, redevelopment, planning and environmental laws are likely. Significant bills include measures that would alter CEQA requirements, tie water availability to land-use planning, and allow development on wetlands. The collection of housing bills has the support of the strange bedfellows alliance that includes the California Building Industry Association, the California Chamber of Commerce, Rural Legal Assistance Foundation, Fannie Mae, and the California/Nevada Council of Operating Engineers. "The lack of affordable housing is causing problems in the job market," Chamber of Commerce spokeswoman Kathy Fairbanks said. "We've heard from companies, particularly in the Bay Area, who are having trouble finding employees because of housing costs." But Sandra Spelliscy, Planning and Conservation League general counsel, said builders are looking for excuses to decrease needed regulations. "Our message is that CEQA is not the problem causing the jobs-housing imbalance in this state. We're going to be very hard line on that issue," Spelliscy said. The package contains: o AB 2340 (Ducheny) and AB 2343 (Ducheny), which would modify CEQA to encourage infill housing. AB 2340 states that environmental laws should "recognize the importance of affordable housing in protecting the natural environment." AB2343 would reduce environmental review of certain infill housing projects of up to 200 units. o AB 2048 (Torlakson), which would give more property tax revenue to local governments to encourage housing development in job-rich areas, and employment in housing-rich locales. o SB 1789 (Rainey), which would require the Department of Toxic Substances Control to study obstacles to development of brownfields and recommend ways to maximize use of the sites. o AB 2041 (Dutra), which would encourage local agencies to spend more redevelopment dollars on very low-, low-, and moderate-income housing projects. o SB 1966 (Brulte), which would let a city or county refer an initiative petition to another local agency for a report on the initiative's impact on affordable housing. o AB 2112 (Dutra), AB 2139 (Pacheco) and AB 2632 (Calderon), all of which modify the dispute resolution system for settling construction liability disputes. Builders contend existing law discourages construction of condominiums and townhouses. o A budget augmentation by Sen. Richard Alarcon (D-Los Angeles) to expand California Housing Finance Agency homeownership programs. Caucuses, bills and budgets Approximately 150 other housing and urban growth bills have been proposed. Although February 25 was the deadline to introduce bills, many remained in spot form during March. Some analysts and even legislators indicate this will be the year a true discussion of smart growth and jobs-housing balance begins at the Capitol. However, significant legislation appears unlikely, in part because Gov. Davis has not made growth an issue, said the PCL's Spelliscy. Assembly members, led by Patricia Wiggins (D-Santa Rosa) and Fred Keeley (D-Santa Cruz), formed a Smart Growth Caucus last December. Thirteen Democratic Assembly members have participated in the informal group. The caucus has neither authored legislation nor indicated if it will respond to bills as a group. Still, said Dan Flynn, Wiggins' legislative director, "I suspect the caucus will want to have some sort of influence over the housing bonds that are proposed this year and over the budget." Gov. Davis's budget proposal does contain $86.9 million in new spending for housing. More than half of that money would provide down payment assistance for teachers. The early budget plan also contains a permanent, $15 million increase in the low-income housing tax credit, and $11 million for the new Multifamily Housing Program, which funds new and rehabilitated housing for seniors, disabled people, families moving off welfare and poor working families. And Senate Democrats have proposed that the budget contain another $250 million in housing spending. In a different critical area, the governor is scheduled to release a transportation plan in early April that could earmark at least $1 billion for projects and ask the Legislature to place a transportation bond on the November ballot. Earlier this year, though, the governor indicated he would not support a constitutional amendment, SCA 3 (Burton), to lower from two-thirds to majority the vote required to pass a local sales tax increase for transportation. Conflicting approaches to CEQA A CEQA bill that was a top priority of environmentalists remains alive from last year, SB 755 (Hayden). It would: eliminate increased revenue as the sole "overriding consideration" when unmitigated impacts are identified; require a master EIR for a series of smaller projects; ensure mitigation measures are timely implemented; and allow a city or county to reject a project if an applicant misrepresents the project. However, most of this year's CEQA bills carve out new exemptions. That is not abnormal, but, "this is probably a few more exemptions than usual," said Randy Pestor, consultant to the Senate Committee on Environmental Quality. Two bills, AB 1960 (Machado) and AB 2838 (Hertzberg), would exempt from CEQA a local agency formation commission's approval of city incorporation. The Commission on Local Governance for the 21St Century, which recently completed work, recommended the exemption. Hertberg's bill also contains other recommendations from the 21st Century Commission, including the requirement that counties adopt community growth plans. A bill by Senate President Pro Tempore John Burton, SB 1562, would limit analysis of proposed wetlands mitigation and restoration projects. The bill appears aimed at San Francisco Airport's proposed expansion into the bay. Senate Bill 1810 (Perata) would exempt vineyard planting from CEQA. Environmentalists in Napa and Sonoma counties have pushed for environmental review of new vineyards. Assembly Bill 2054 (Torlakson), which establishes a pilot program aimed at jobs-housing balance in the East Bay, would streamline CEQA "to facilitate desired development in selected areas." At least one new CEQA bill does not create an exemption. Assembly Bill 1807 (Longville) would require consultation with Caltrans during the environmental review process. {The following section was not included in the printed article} Other legislation of interest A sampling of other bills includes: o AB 1219 (Kuehl) – requires verification of water supply availability before approval of residential developments with at least 200 units. o AB 2310 (Ducheny) — allows residential and commercial development on degraded wetlands. The bill appears to allow development of the controversial Bolsa Chica project near Huntington Beach, which an appellate court largely blocked last year. o SB 510 (Alarcon) —places housing bonds totaling $980 million on ballots this fall and in 2002, 2004 and 2006. AB 398 (Migden) places a $750 million housing bond on the November ballot. o SB 89 (Escutia) — requires the California Environmental Protection Agency to implement environmental justice strategies. o SB 1277 (Hayden) — prohibits building any road through state parks. The measure blocks extension of the Foothill (241) Toll Road through San Onofre State Park in Orange County. o SB 1642 (Figueroa) — amends the housing element law. The Department of Housing and Community Development's failure to review a draft housing element or element amendment would serve as criteria for HCD funding to a city or county. o AB 2359 (Keeley) — establishes the Community Development Investment Guarantee Corporation in the State Treasurer's office to stimulate private investment in poor communities. o AB 2747 (Alquist) — requires the California Debt Limit Allocation Committee to direct more mortgage credit certificates to areas where at least 70% of families cannot afford a median-priced home. o AB 1968 (Wiggins) — authorizes cities and counties to enter into agreements to coordinate land-use planning on a regional basis. o SB 2113 (Burton) – extends the time limits on certain redevelopment projects. o AB 1544 (Calderon) — allows development of a shopping center on an unincorporated island within the City of Redlands. Gov. Davis vetoed a similar "Redlands doughnut hole" bill last year. o AB 1321 (Cardoza) — appropriates $130,000 for environmental review of the planned University of California, Merced, campus. o AB 1944 (Wayne) — makes it more difficult to remove farmland from Williamson Act protections. o AB 2364 (Keeley) — calls for a program to conserve farmland through use of mitigation and conversion fees paid when farmland is converted to nonagricultural uses. Contacts: Kathy Fairbanks, California Chamber of Commerce, (916) 930-1253. Sandra Spelliscy, Planning and Conservation League, (916) 444-8726. Randy Pestor, Senate Committee on Environmental Quality, (916) 324-0894. Dan Flynn, Office of Assemblywoman Patricia Wiggins, (916) 319-2007. Legislature website: www.leginfo.ca.gov For a list of other intersting land-use bills, please visit our website atwww.cp-dr.com.

A lawsuit challenging a county's decision on parcel status does not belong in federal court, even though the owners acquired the land through federal patents and acts of Congress, the Ninth Circuit U.S. Court of Appeals has ruled. "Federal land patents and acts of Congress do not provide bases for federal question jurisdiction," the unanimous three-judge panel ruled. Edward Virgin Sr. and his family claimed to own 1,240 acres in San Luis Obispo County. The holdings included seven parcels created by patents issued to the Virgins' predecessors-in-interest by the federal government, pursuant to acts of Congress in 1820 and 1862, and six parcels acquired pursuant to four other 19th Century acts of Congress. In 1993, the Virgins filed an application for a lot line adjustment to reconfigure the 13 parcels into eight lots. In April 1995, the San Luis Obispo County Subdivision Review Board denied the application and found the property amounted to only one parcel. The Virgins appealed to the Board of Supervisors, which also denied the application but found that the Virgins' property contained two parcels. The Virgins then sued the county in San Luis Obispo County Superior Court, seeking declaratory relief, an injunction and damages. In May 1997, the court concluded the Virgins' property consisted of four parcels and ordered the county to conduct a new hearing. After that hearing, the Board of Supervisors determined that the Virgins owned only four parcels, "which do not include the majority of plaintiffs' ownership of the land patents." Unsatisfied, the Virgins filed a complaint for declaratory and injunctive relief in federal district court in November 1997. A few months later, District Judge Audrey Collins dismissed the case because the federal court lacked jurisdiction. On appeal to the Ninth Circuit, the Virgins argued that two Supreme Court precedents, acts of Congress conferring the patents, and the Supremacy Clause all grant jurisdiction to the federal courts. The Ninth Circuit disagreed and said the Virgins' case belonged in state court. The two Supreme Court cases cited by the Virgins — Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974), and Packer v. Bird, 137 U.S. 661 (1891) — were not applicable, the court ruled. The Oneida exception is limited to federal interest in the possessory rights of Indian tribes, ruled the Ninth Circuit, which cited then-justice William Rehnquist's concurring opinion: " he grant of a land patent … carries with it no guarantee of continuing federal interest and certainly carries with it no indefinitely redeemable passport into federal court." The Packer case regarded whether a landowner's property extended to the high or low water mark of a stream and "neither the Supreme Court nor the Ninth Circuit has ever invoked Packer to create federal common law conferring federal question jurisdiction," the court ruled. In rejecting the Virgins' acts of Congress argument, the Ninth Circuit cited Shulthis v. McDougal, 225 U.S. 561 (1912), in which the Supreme Court established that "a controversy in respect of lands has never been regarded as presenting a Federal question merely because one of the parties to it has derived his title under an act of Congress." The Supremacy Clause did not apply because there was no federal statute that preempted county ordinance or state law. Moreover, all relevant cases "hold that acts of Congress granting federal land patents are not bases for federal question jurisdiction," the court ruled. The Case: Edward F. Virgin Sr. v. County of San Luis Obispo, No. 98-55557, 00 C.D.O.S. 357, filed January 13, 2000. The Lawyers: For Virgin: William S. Walter, Walter & Bordholdt, (805) 541-6601. For the county: Thomas F. Winfield III, Brown, Winfield & Canzoneri, (213) 687-2100.

The Interior Department is obliged to build an agricultural drain for land irrigated by the San Luis Unit of the Central Valley Project, the Ninth Circuit U.S. Court of Appeals has ruled. The 40-year-old San Luis Act called for a system in which water, after being used for irrigation, would drain to the Bay Delta. But the Interior Department never completed the drain, a situation that created the environmental crisis that killed or maimed thousands of birds at Kesterson Reservoir during the 1980s. A three-judge panel of the Ninth Circuit voted 2-1 to order the federal government to build the drain to the Bay or create an in-valley answer to the accumulation of brackish irrigation water. In a dissent, Judge Stephen Trott said the court could not force construction of the drain, and he urged Congress and the state to take action. Congress authorized the San Luis Unit to irrigate farmland in Merced, Fresno and Kings counties in 1960. The San Luis Act conditioned construction of irrigation facilities with the provision of a drainage system built by the state or the Interior Department. The state declined to construct the master drain, so the Interior Department in 1962 said it would make provisions for the drain to the bay. The project began delivering irrigation water to the Westlands Water District in 1967, and construction of the drain commenced the following year. The middle 40% of the 200-mile-long drain to the Bay Delta had been complete by 1975, when the federal government suspended the project because of public "concerns." At that time, the drain discharged 7,300-acre-feet of water into Kesterson Regulating Reservoir, which was never intended to be the end point. In mid-1983, studies found that waterfowl nesting at Kesterson were deformed and dying, likely because of a selenium concentration. Because of the environmental disaster at Kesterson, the federal government plugged the interceptor drain in 1986. But the government continued its delivery of irrigation water, which has led to the deterioration of low-lying farmland. Landowners inside and outside the San Luis Unit service area sued the Interior Department to force completion of the drain. The lawsuits were partially consolidated in May 1992, and a district court eventually issued a partial summary judgement saying that the Interior Department had to provide drainage service to lands receiving San Luis water. After the judgement was issued, the Interior Department argued that changes in the law and environmental knowledge made compliance with the San Luis Act impossible and excused the federal government from completing the drain. After a 1994 bench trail, District Judge Oliver Wanger ruled for the landowners. He said the federal government must provide the drainage service and it should pursue a discharge permit from the California Water Resources Control Board. The Interior Department appealed and was joined by Contra Costa County, the Contra Costa Water Agency, the Contra Costa Water District, the National Resources Defense Council and The Bay Institute, all of which were concerned about the affect of agricultural drainage on the Bay. They argued that the San Luis Act only authorized construction of a drain, but did not require one, and that riders in Congressional appropriation acts since 1965 had repealed the duty to provide the drain. The court majority disagreed. The San Luis Act said that if the Interior Department chose to build the unit, it must also provide the agricultural drain, Chief Judge Procter Hug Jr. wrote. "The discretion contained in this authorization is limited to the decision whether to construct the unit. The very next sentence of the statute specifically defines which ‘principle engineering features' are to be included in the ‘unit' (if the unit is constructed), and it thus denied the Secretary discretion as to what constitutes the San Luis ‘unit.'" The court interpreted the appropriation language to mean that a final point of discharge could not be determined until the Interior Department and the state agreed on a plan to protect water quality. "Congress merely placed a condition on the determination of the final point of discharge; by no means did it excuse or repeal the Secretary's obligation to provide drainage," Hug wrote. The court, however, reserved the lower court's ruling that the Interior Department must get a state water discharge permit. "Although the district court can compel the Department of the Interior to provide drainage service as mandated by the San Luis Act, the district court cannot eliminate agency discretion as to how it satisfies the drainage requirement. … Now the time has come for the Department of the Interior and the Bureau of Reclamation to bring the past two decades of study, and the $50 million expended pursuing an ‘in valley' drainage solution, to bear in meeting its duty to provide drainage under the San Luis Act," Hug wrote. In his dissent, Trott disagreed with majority's interpretation of the Act and of appropriation language. He said the Act only authorizes, but does not require, construction of a master drain. He also said Congress has blocked construction of the drain "in nearly every appropriations bill for the Bureau of Reclamation for 30 years." Trott concluded there was little the court could do. "The thorny problem of what to do with the noxious effluent is not readily susceptible of a solution that the parties with competing interests will find acceptable. In fact, the question in search of an answer has become a political question beyond our ability, competence, and authority to resolve," Trott wrote. The Cases: Firebaugh Canal Co. v. United States, Nos. 95-15300, 95-16661, 00 C.D.O.S. 955, 2000 Daily Journal D.A.R. 1391, filed February 4, 2000. The Lawyers: For Firebaugh: William M. Smiland, Smiland & Khachigian, For the U.S.: Jeffrey Dobbins, Department of Justice Environmental and Natural Resources Division, Washington D.C., (202) 514-2000.

In one of its rare published opinions, the Fifth District Court of Appeal rebuked the City of Fresno and a developer for violating the California Environmental Quality Act. Specifically, the unanimous three-judge appellate panel rejected the argument that the court cannot require an environmental impact report because the disputed project was built during litigation. "The corporation apparently made a calculated business decision to go forward with the project in spite of protests by residential neighbors, and pending litigation," Justice Rebecca Wiseman wrote. "Now the corporation must live with the consequences of its financial choice. We affirm the trial court's decision ordering an EIR be prepared. To the City of Fresno and the corporation we say: It is never too late." At issue is a car wash in a strip commercial center at North Cedar and East Nees avenues. The Fresno City Council approved the commercial development � with the exception of a proposed service station, mini-mart and automatic car wash � in August 1996. The developer sued over the exceptions, and some homeowners sued over project approval. Both of those suits were settled, with the developer winning approval of everything besides the car wash, and neighbors winning some mitigations. In August of 1997, Garreks, Inc., applied for a conditional use permit for an automatic car wash on a 0.9-acre parcel in the commercial center. After several public hearings, extensive public protest and completion of a noise study by a Garreks consultant, the Planning Commission approved the conditional use permit on January 7, 1998. The City Council declined to review the decision. The Woodward Park Homeowners Association (WPHA) filed a lawsuit challenging the city's approval of the project and asking the court to order an EIR. On July 30, 1998, Fresno County Superior Court Judge Lawrence O'Neill ruled for the homeowners. He ordered the city to complete an EIR focused on architectural and aesthetic impacts, void adoption of the negative declaration, and rescind project approval. Before O'Neill ruled, however, Garreks went ahead and constructed the car wash, with the city's consent. On appeal, Garreks and the city argued that the case was moot because the car wash was built and operating before O'Neill's ruling. They said an EIR would serve no purpose. The court strongly disagreed. "The City's argument is not only against public policy, it is absurd," Justice Wiseman wrote. In fact, she continued, the court can still provide homeowners with relief. "As recognized by WPHA, a decision upholding the court's order directing the preparation of an EIR could result in modification of the project to mitigate adverse impacts or even removal of the project altogether," she wrote. "It would hardly be sound public policy to allow a party to avoid CEQA by continuing with construction of a project in the face of litigation, delaying preparation of a court-ordered EIR pending appeal, and then arguing the case is moot because the project has been completed," Wiseman wrote. The justice continued, "Apparently the City and Garreks buy into the philosophy of the mythical captain of the Starship Enterprise, James T. Kirk, who said: �May fortune favor the foolish.' We do not. Garreks' decision to complete and operate the project, despite the pending litigation, in no way provides for an exemption to CEQA." The court also rejected the city's argument that because it had amended the municipal code regarding car washes since the trial court ruling, homeowners could no longer make a fair argument that the project may cause a significant effect on the environment. The court said allowing the city to change its code after the fact "would be laying a foundation for great abuse." Robert Rosati, the WPHA lawyer and a member of the group, explained that although noise was a major concern, the trial court decided the case on a narrower technical issue involving the Fresno Municipal Code in place at the time of project approval. In the unpublished portion of its opinion, the Fifth District upheld the trial court decision. The municipal code required car washes to be part of a unified shopping center of at least five acres. But this 9.42-acre shopping center had been chopped into numerous smaller parcels, including a 0.9-acre lot for the car wash. The municipal code required such projects be at least 300 feet from residential districts. But the trial court ruled the city violated the municipal code by measuring from a residential property line rather than the center of the street, which was only 247 feet from the project. The municipal code also required the car wash be of uniform design with the rest of the shopping center. But the city had no provision for ensuring such architectural integration, and that alone was basis enough to argue that the project may have a significant effect on the environment, the appellate court said in the unpublished part of the opinion. Rosati said the association will insist on a shuttering of the car wash while the EIR is being prepared. The Case: Woodward Park Homeowners Association v. Garreks, Inc., No. F0322200, 00 C.D.O.S. 614, 2000 Daily Journal D.A.R. 981, filed January 20, 2000. The Lawyers: For WPHA: Robert Rosati, (559) 256-9800. For Garreks: Walter Whelan, (559) 437-1079. For City of Fresno: Robert Gabriele, assistant city attorney, (559) 498-4774.

A five-county "Inter-Regional Partnership" between the Bay Area and the Central Valley is taking more tangible form. The Partnership will ask the Legislature this year for a pilot project to designate housing and job "incentive zones" — similar to enterprise zones — that would include a re-distribution of existing property tax revenue and streamlined environmental review to encourage better jobs-housing balance. The Partnership is also seeking $625,000 in state funding to integrate computer mapping throughout the five counties, thus permitting more accurate mapping of job centers and housing centers. "We have to coordinate our efforts better," said Contra Costa County Supervisor Mark DeSaulnier, one of the founders of the Inter-Regional Partnership. "We have to get local governments to understand the convergence of land-use issues." The proposed legislation, which will be carried by Democratic Assemblyman Tom Torlakson, a former Contra Costa County supervisor, will also formalize the Inter-Regional Partnership's legal status. Torlakson's bill will probably propose that the IRP be created as a joint entity of the three councils of governments in the affected area — the Association of Bay Area Governments and the San Joaquin and Stanislaus county COGs. The IRP would be created either as a joint-powers authority or through a memorandum of understanding among the three COGs. DeSaulnier said that formalizing the IRP does not represent creation of a new level of government. "You already have regional government," he said. "It's just a question of making it work." The Inter-Regional Partnership was formed two years ago by elected officials from five counties affected by an imbalance of jobs and housing — Santa Clara, Contra Costa, and Alameda in the Bay Area, and Stanislaus and San Joaquin in the Central Valley. These five counties are all part of a major cross-commuting pattern centered on the Altamont Pass, which separates eastern Alameda County from San Joaquin County. The IRP's forecasts predict that the three Bay Area counties will produce more than 800,000 jobs but only 300,000 houses in the next 20 years. As a result, the number of commuters traversing Altamont Pass is expected to grow from 100,000 to 250,000 per day during this period, according to IRP planners. Staffed by the three COGs, the IRP up to now has served as a "watering hole" for jobs-housing balance issues in the two regions. (Though almost 69 local governments are located in the five counties, only 15 are officially part of the IRP, including all five county governments.) Participants say the likely creation of a formal entity reveals that officials from the five counties have built a certain level of trust. "We were sword-fighting and fist-fighting at first," said Don Bilbrey, mayor of Tracy, a fast-growing city in San Joaquin County. "But since then, there's been an evolution. We have identified regional problems and difficulties, so understanding and respect has grown." One measure of success: San Mateo County, which includes the northern end of job-rich Silicon Valley, recently sought to join the group. But IRP leaders asked the county to hold off, claiming that they wanted to maintain the IRP as a "pilot" program. In addition to the legislation, the IRP recently surveyed the 69 local jurisdictions in the five counties to determine how many are pursuing jobs-housing balance policies. Of the 30 jurisdictions that have responded so far, 23 were completing an inventory of vacant lands, 17 were studying higher densities, and 16 sought to attract employers that match the skills of the area's work force. Half of respondents had established urban growth boundaries. In most cases, Alameda and Contra Costa County communities appeared to be ahead of the other counties in adopting sophisticated planning and economic development instruments. The most interesting idea to emerge from the IRP is the concept of jobs and housing "incentive zones" that would receive tax and regulatory breaks in the same fashion as enterprise zones. The Partnership is asking the Legislature to pass a bill permitting the designation of 5 to 10 such zones of various sizes, scattered around the region. According to a draft prepared by IRP staff in February, the zones would be between 50 and 250 acres apiece, would contain significant vacant or underutilized land, and would provide either jobs or housing, depending on which is more needed in the area. The sites would be eligible for a slew of special incentives, including the following: o Delivery of all 100 percent of property tax revenues generated within the zone to the city or county containing the zone, rather than splitting revenues among all taxing entities. o Streamlined environmental review within the zone under the California Environmental Quality Act. o Priority for low-income housing tax credits, funds from the state infrastructure bank, and similar discretionary state funding sources, much like proposals made by State Treasurer Phil Angelides in his "Smart Investments" strategy. (See CP&DR October 1999.) o Brownfield-style loans for up-front planning and environmental evaluation of the sites. All these ideas have been kicking around Sacramento — mostly in other contexts, such as reform of the state-local fiscal system and the Angelides proposal. It is unlikely that all would pass. However, Torlakson, who is also chair of the Assembly Select Committee on Jobs-Housing Balance, said he is confident because of what he heard when the select committee took testimony around the state last year. "I think this will resonate across the state," says Torlakson. "I see similar problems all across the state." The state's IRP program would be considered a pilot program that would last for three years, with the IRP submitting a final report on the experiment to the Governor's Office of Planning and Research no later than 2004. Participants acknowledge that the Central Valley communities will be receptive to job creation in their communities, while the notion of adding more housing may meet resistance in the Bay Area. At the same time, however, it is not clear how quickly employers will consider moving from the Bay Area over the Altamont Pass into the San Joaquin Valley — especially the Silicon Valley computer companies. These companies have expanded rapidly in the Sacramento area, where an educated workforce and perceived high-quality lifestyle are draws. But they have been slow to move into the counties further south, even though many of their employees currently commute from those counties. For example, Carl Guardino, president of the Silicon Valley Manufacturers Group, said his organization is not focused on job creation in the Central Valley at present and has not been monitoring the IRP process closely. The organization, composed of Silicon Valley's biggest computer companies, is an aggressive lobbyist for more housing and better transportation within Santa Clara County and between Silicon Valley and the Central Valley. To the employers, he said, the most important element in location decisions is "access to a talented work force." Nevertheless, IRP leaders remain confident simple economics will drive Silicon Valley employers "over the hill" sooner or later. "The job generators understand how successfully they have been at developing jobs," Bilbrey said. "There is a demonstrated cost savings to these companies of up to 30%." Bilbrey's city, located at the base of Altamont Pass, is often depicted as a prime example of rampant residential growth in the Valley. After a lull in the early and mid 1990s, Tracy is now seeing construction of about 1,500 homes per year, he said. A citizen initiative, scheduled for the March ballot, would cut that number in half. Bilbrey and his City Council colleagues oppose the initiative. Contacts: Mark DeSaulnier, Contra Costa County supervisor, (925) 646-5763. Don Bilbrey, mayor, City of Tracy, (209) 831-4103. Carl Guardino, Silicon Valley Manufacturing Group, (408) 501-7864. Tom Torlakson, assemblyman, (916) 319-2011. Gary Binger, deputy executive director, ABAG, (510) 464-7902.