A collection of San Joaquin Valley water technology companies is attempting to make Fresno the center of the "flow technology" world. Representatives of dozens of companies have been meeting regularly for nearly two years as part of the Water Technology Industry Cluster in hopes of boosting business and improving the San Joaquin Valley's economic status. The cluster and California State University, Fresno, are trying to attract dollars to build a center at the university for research and development, testing, certification, education and marketing. The cluster has also joined with Fresno City College and Reedley College on a work force training program. The effort has grown from a three-year-old study by Collaborative Economics for the Great Valley Center. The Palo Alto-based consultant found a number of indicators of poor economic health in the region. During the 1990s, construction and retail activity driven by rapid population growth was a major component of the regional economy. Yet the study reported that the labor force grew faster than jobs, and per capita income declined by about 5% in constant dollars from 1990 to 1997. The study recommended the region move away from being a low-cost center and join the technology-driven global marketplace. To do this, the study urged the cluster approach, in which businesses in the same field collaborate on many fronts. Consultants identified six "opportunity areas" for potential clusters, all of which they said were "nascent and require significant scale-up to create critical mass." The study's findings and recommendations gave San Joaquin Valley leaders something with which they could work. "The prognosis was the regional economy was only going to get worse," said Ashley Swearengen, executive director of the Central California Futures Institute at CSU Fresno. "We missed the last wave (of prosperity) and every indicator was that we would miss the next wave." With financial assistance from the Irvine Foundation, the cluster that has taken shape is in the field of water technology, which the study called "precision irrigation technology." Fresno State is already home to the Center for Irrigation Technology, and some of the world's leading companies in the area of moving, restricting, filtering and treating water are based in a region that stretches from Kern County to Modesto. Plus, many people see the provision, cleaning, recycling and conservation of water as a growing issue worldwide. The first cluster meeting was in April 2001. "I really thought it was kind of a dumb idea," said Claude Laval, whose company, Claude Laval Corp., makes filtration equipment. "Most of these people had not collaborated with each other. Most of them hated each other." Laval helped get people to attend the first meeting anyway. Since then, Laval has become a cluster co-chair. "It's better than waiting for some automobile manufacturer to build a factory in Fresno," he said. The semi-monthly meetings now draw 60 to 70 people from around the country. Meetings are not all hugs and kisses, but people are talking and finding more common ground than they knew they had. Members now speak of "cross-fertilization." Swearengen, who has helped get the cluster going, saw many "false barriers" because people in similar businesses had not communicated with each other. "The group felt very under-the-radar and very fragmented," she said. Once they started seeing what they had in common, cluster members established three priority areas: Work force preparation, export development and promotion (including joint marketing at trade shows), and one-voice advocacy. Much of the cluster's effort is tied to the proposed water tech center, and not only for improved research and development. Already, trade delegations from around the world visit the San Joaquin Valley because of its reputation for agricultural production, Swearengen said. However, to learn about the latest in water technology, those visitors have to go from farm to farm to see individual components. The water tech center would showcase the region's technical and manufacturing capabilities in one place. Fresno State has agreed to donate land for the center, and cluster leaders believe a requested $2 million federal grant will receive approval. If the federal money comes through, it will leverage private sector donations, Swearengen said. In the meantime, the work force program is moving forward. Cluster members agreed they had trouble finding certified welders, CNC machinists and maintenance mechanics. Manufacturing, noted Swearengen, is the heart and sole of the cluster. "This is an area of huge unemployment," said Laval, "but you can't find anybody that you need." The cluster is working with the two community colleges, which already have vocational programs but experience high drop-out rates, said Russ Densmore, a cluster member and vice president of operations for American AVK, which makes valves and fire hydrants. The cluster is setting up internships and work experience programs to encourage students to finish two-year vocational programs and to provide workplace skills. The cluster is focused on growing existing businesses, a strategy recommended in the original Great Valley Center study. Everyone involved agrees that growth will require greater export of products and technology. Some companies already have an international presence – American AVK is owned by a Danish holding company, for example — while others need help making connections overseas. And there is hope that new water tech companies will open in the region, and existing businesses located elsewhere will move to the valley. "We're already beginning to see people moving into this area because they see all of the testing and research facilities in the area," said Laval, who noted two small companies from Montana and Oklahoma have relocated. In the end, what cluster members want to see is more decent-paying jobs available in the region. Past economic development efforts have focused on call centers and logistics, which often pay little above minimum wage, noted Laval, a member of the Fresno Business Council. Certified welders typically command $20 to $25 per hour, he noted. Contacts: Ashley Swearengen, Central California Futures Institute, (559) 278-8433. Claude Laval, Water Technology Industry Cluster, (559) 255-1601. Russ Densmore, American AVK, (559) 452-4300. International Center for Water Technology website: www.icwt.net Economic Future of the San Joaquin Valley study: www.greatvalley.org/nvc/nvc_publications.aspx

The San Diego Redevelopment Agency can use a state law to require the owner of property the agency took by eminent domain to pay for cleanup of soil contamination, a state court has ruled. A unanimous three-judge panel of the Fourth District Court of Appeal, Division One, ruled that the city could recover remediation costs under the Polanco Act (Health & Safety Code § 33459 et seq.). The property owner, the Salvation Army, argued that the city could not recover costs because it did not follow requirements of the federal Superfund law (the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA). But the court ruled that the federal law did not prevent the city from recovering costs and that, in any event, the city did comply with the federal law."Contrary to Army's suggestion, the Polanco Act does not limit a redevelopment agency's rights to those available under CERCLA," Presiding Justice Daniel Kremer wrote for the court. The city's attorney, Richard Opper of Foley & Lardner, called the decision a "shot in the arm" for the Polanco Act. "California law has been unclear in its guidance on the market value of condemned, contaminated land," Opper said. "Now, there is approval for using the Polanco Act in coordination with eminent domain." The property in question is in San Diego's East Village Redevelopment District, where the city is constructing a downtown baseball stadium (see CP&DR Places, January 2002). In 1998, the city identified the Salvation Army's parcel as one the city needed to acquire, so the city included it in a phase I environmental site assessment of the area. A consultant identified a possible underground storage tank on the Salvation Army parcel, so the city requested the Salvation Army submit a remediation plan within the Polanco Act's 60-day time limit. The Salvation Army did not respond to the request or to a 30-day extension. In 1999, the county Department of Environmental Health approved the city's master work plan for cleaning up the redevelopment project area. In February 2000, the city filed a lawsuit against the Salvation Army to acquire the property through eminent domain. The following month, the Salvation Army submitted an assessment and remediation work plan to the county. But the city took possession of the parcel, which the Salvation Army did not dispute, in May. After demolishing the structures, the city found evidence of lead-contaminated burn ash. The city prepared a property mitigation plan for review by the county and the Salvation Army, and then did the cleanup work, including excavation and disposal of the contaminated soil. In 2001, the city and the Salvation Army settled on $550,000 – less any amount recoverable under the Polanco Act — as the price for the property and any damages the property owner suffered. San Diego County Superior Court Judge Judith McConnell (since appointed to the Fourth District bench) later concluded that the Salvation Army did not respond to the city's request for submission of a remedial action plan before the statutory deadline. Judge McConnell awarded the city $172,000 in remediation costs, plus attorney's fees and mediation expenses. The Salvation Army appealed. It argued that the Polanco Act's inclusion of CERCLA's "scope and standard of liability for cost recovery" limited the city's recoverable costs to those allowed under CERCLA. The Army further argued that the city did not follow the federal Environmental Protection Agency's implementing regulations for CERCLA (known as the "national contingency plan") because the city did not assess the threat to human health or the environment before proceeding with cleanup. The Salvation Army also argued that the city's disposal of soil was compelled by state waste laws, not because the soil threatened human health and the environment. The appellate court rejected these arguments. Foremost, the court ruled that cost recovery under the Polanco Act is different than under CERCLA. "The Polanco Act involves cleanup of the release of hazardous substances in the context of a redevelopment project," Justice Kremer wrote for the court. "The Polanco Act was enacted to provide a redevelopment agency with the means to require responsible parties to bear the costs of mitigating contamination on property within that agency's redevelopment project area." The Polanco Act's reference to the national contingency plan is intended to provide the city's redevelopment agency "with a basis for evaluating a proposed remedial action plan submitted by a responsible party in response to the agency's 60-day notice," the court ruled. The state law "does not make compliance with any portion of the national contingency plan a precondition for the agency's recovery of costs under Health & Safety Code § 33459.4. Instead, a redevelopment agency's entitlement to cost recovery under the Polanco Act depends upon the redevelopment agency's implementation of a plan approved by the designated regulatory agency overseeing the redevelopment plan." In this case, the county Department of Environmental Health was the designated regulatory agency, and it approved the city's plan. Besides, the court continued, the city did comply with the federal regulations by conducting a remedial investigation and preparing a feasibility study. Meanwhile, the Salvation Army "remained silent" through the whole process, Kremer noted. The city satisfied the conditions necessary for cost recovery under the Polanco Act by submitting a notice to the Salvation Army asking for a remedial action plan. The Salvation Army, meanwhile, submitted a remedial action plan and removed the underground storage tank more than a year after the statutory deadline for responding to the city's notice, Kremer wrote. The court also rejected the Salvation Army's contention that the city was only complying with state waste disposal laws. "Agency's master work plan and its amended property mitigation plan were both designed to protect the health and safety of construction workers and to prepare the property for future use," the court held. Additionally, the court held that the Salvation Army was a "responsible party" subject to liability, even though the city's cleanup occurred after the city took possession of the property. The Salvation Army qualified as the "present owner" because it owned the property when the city filed the eminent domain lawsuit. And, as the present owner, the Salvation Army was liable even if it did not cause the contamination, the court ruled. The Case: Redevelopment Agency of San Diego v. Salvation Army, No. D038835, 02 C.D.O.S. 11137. Filed October 21, 2002. Ordered published November 14, 2002. The Lawyers: For the city: Richard G. Opper, Foley & Lardner, (619) 234-6655. For Salvation Army: H. Douglas Galt, Woolls & Peer, (213) 629-8792.

WASHINGTON _ A deadlocked U.S. Supreme Court has upheld a $500,000 fine against a California developer for "deep ripping" about two acres of wetlands on a Central Valley ranch while converting pasture to vineyards and orchards. The justices divided 4-4 in an appeal by Angelo Tsakopoulos seeking to set aside penalties levied by the U.S. Army Corps of Engineers for violating provisions of the Clean Water Act that require a permit before filling or dredging waterways. Tsakopoulos, a prominent Sacramento-area housing and commercial developer, drew the fines for deep plowing wetlands that lay on parts of the 8,400-acre Borden Ranch about 30 south of Sacramento that he bought in 1993. The Corps of Engineers said the deep ripping — a process also called deep ripping, which involves heavy bulldozers dragging five-foot-long plow shanks through the soil — filled the wetlands with dirt, rock, and sand churned up from the densely packed "claypan" below the layer of arable soil. The high court's tie vote, announced in a one-sentence, unsigned opinion, resulted from the decision by Justice Anthony M. Kennedy to recuse himself from the case because of his acquaintanceship with Tsakopoulos and his family. The court does not announce individual votes in tie cases, but lawyers and observers surmised from questioning and past cases that the justices divided along conservative-liberal lines. The split has the effect of affirming a decision by the Ninth U.S. Circuit Court of Appeals upholding the fines (see , October 2001). Tsakopoulos and an array of industry groups had warned that the ruling went beyond the Corps of Engineers' statutory authority and could hurt farmers, ranchers, developers, mining companies, and road builders. Environmental groups said they were pleased with the high court's action even though the government's power to regulate deep ripping remains unresolved. "So far, so good," said John Echeverria, a professor and director of Georgetown University Law Center's Environmental Law Institute. "The Ninth Circuit ruling is upheld, the precedent remains in effect, and the battle is deferred to another case in which Justice Kennedy doesn't know one of the parties." "We're delighted," said Howard Fox, managing attorney with the environmental law firm Earthjustice. "There were a lot of industries in the Supreme Court asking for major loopholes in the Clean Water Act. We're already losing tens of thousands of acres of wetlands, and to have weakened the law further would have made that situation even worse." For their part, industry groups said they remain hopeful that the court will back their position in a future case. "We're disappointed that they didn't see things our way, but we were encouraged that they took the case," said Rick Krause, regulatory counsel with the American Farm Bureau Federation, which filed a brief supporting Tsakopoulos. "We think that that might mean they had a little bit of difficulty with the Ninth Circuit reasoning, and we're hopeful that after an appropriate case arises in the future that they'll take it and that all nine justices will be able to vote on it so that they will have a clear direction." In a prepared statement, National Association of Home Builders President Gary Garczynski attempted to find a positive outcome. "The speed and brevity of the high court's decision — a 4-4 split ruling delivered less than one week after oral arguments were heard, without Justice Kennedy's participation, with little precedential value and with no legal analysis — raises more questions than it answers," Garczynski said. "We are by no means discouraged by this split ruling." The deadlock was announced December 16, only six days after oral arguments at the high court. The justices' questions from the bench had indicated a possible division along ideological lines — leading lawyers on either side of the case to forecast a tie vote. In addition, the court had split 5-4 along ideological lines in its most recent wetlands regulation case just last year. In that case, , 121 S. Ct. 675 (see , February 2001), the court ruled that the federal government has no authority to regulate isolated ponds or wetlands. Kennedy joined the court's other four conservatives in the majority, while the four members of the court's liberal wing were in dissent. The legal question in Tsakopoulos's case turned on provisions of the Clean Water Act that require a permit from the Corps of Engineers for "any addition of any pollutant to any navigable waters from any point source." In urging the justices to strike down the fines against Tsakopoulos, Chicago attorney Timothy Bishop contended that deep plowing did not meet that statutory definition. "Deep plowing of that sort doesn't add fill or dredge material, and it doesn't involve a point source," Bishop argued. "We don't think it's permissible to protect wetlands by disregarding the words of the statute," he added. In turn, Assistant U.S. Solicitor General Jeffrey Minear argued that Congress used broad language to apply to "any unauthorized addition of a pollutant" to protected waters. "The most common form of dredging is moving material from one point of a body of water to another," Minear said. "Turning over material in place," he added, "does environmental harm." Krause, the farm bureau lawyer, said the group was most concerned with the possibility that the Corps of Engineers would claim authority to regulate any form of plowing despite an exemption in the law for "normal farming activities." In its brief, the government said the exemption did not apply because the deep plowing was intended to change the use of the land and had the effect of transforming the wetland areas to dry land. The home builders' association had been hoping for a ruling in Tsakopoulos's favor for use in a pending challenge to a general regulation issued by the Corps affecting builders. In that case, , NAHB is carrying on a 12-year-fight against the Corps' authority to regulate land clearing if it involves "incidental fallback" of soil into wetlands or other waterways. NAHB asked that the case — pending in federal district court in Washington — be put on hold pending the high court's decision in the Borden Ranch case. Bishop — who represented the Cook County solid waste agency before the Supreme Court — said he thought Kennedy's absence in the Tsakopoulos case had cost the landowner a victory. "Had Justice Kennedy been able to participate in this case, we quite likely would have won it," Bishop told the Associated Press. Echeverria called Bishop's assessment "a plausible guess," but "premature." "Kennedy is a swing vote in a variety of environmental cases," Echeverria said. "He just hasn't been heard from." The case: , No. 01-1243. Filed December 16, 2002. The attorneys: For Borden Ranch: Timothy S. Bishop, Mayer, Brown, Rowe & Maw, (312) 782-0600. For Corps of Engineers: Jeffrey P. Minear, Assistant U.S. solicitor general, (202) 514-2203.

Cliff Graves is special advisor to the chancellor at University of California, Merced. Graves has overseen many aspects of planning the Merced campus, which is the University of California's first new campus since the mid-1960s. The UC Board of Regents approved the Long Range Development Plan for the campus and an adjacent new community about two miles east of Merced in January 2002 (see , February 2002, , April 2001). Construction commenced in November, and the school is scheduled to open to its first 1,000 students in fall of 2004. Despite the state budget shortfall, the university has the funding to complete the first phase of construction. A planner for more than 30 years, Graves previously was the executive director of the San Francisco Redevelopment Agency. He spoke with Managing Editor Paul Shigley in mid-December. : Where are you in the process right now? GRAVES: The Long Range Development Plan was approved by the regents this past January. The EIR was subject to challenge and was challenged by a small group of environmentalists. The appellate court recently denied their request for an injunction, so we went ahead with construction. They are moving dirt like crazy out there right now. The other point, from a regulatory standpoint, is that the Fish and Wildlife Service gave us a ruling of "no jeopardy" for the entire project, not just for the part of the project we are working on now. Shortly, we will be going out to bid for the buildings themselves and the housing project. The first contract will be let in January. : How much is UC involved in planning the off-campus community? GRAVES: The regents are a 50% owner in the site where the planned community will be. The other partner is the Virginia Smith Trust, which provided the land for the campus itself. There is a joint venture between the two that's called the University Land Company LLC. The university is the managing partner for the project. : It has been a long time since UC built a new campus. Do you have a model for what you are doing? GRAVES: There really isn't a template for what we've done. When we built Irvine and Santa Cruz and San Diego, we didn't have any of the regulations we have today. It was a different time in terms of the fiscal relationships as well; whereas, those campuses had offsite infrastructure requirements, the state was willing to provide support for that. In this case, it's up to the university itself to make those arrangements. So the university has been negotiating, primarily with the city, to work those details out. : So where does money come from for off-site improvements? GRAVES: Eventually, it is going to come out of the campus budget, which is going to further stress the budget of the campus. An agreement has been reached with the city of Merced regarding sewer and water. And we're working with the State Infrastructure Bank. : Is this like planning a new town? GRAVES: In a purely physical sense, it is. But it's planning a town that has to meet the tests of the market. This is not an academic exercise. One of the challenges the LLC will face is coming up with a product that can work in the market that is part of the Central Valley. One the questions it has had to address is of the absorption rate. This new town is on bare land, so all the infrastructure has to be built. Typically, it requires a fairly rapid development rate to offset the costs of that. But the absorption rate is going to be slower than usual. So how they spread those costs out over a period of time is really a challenge. The campus's rate of development will, to some degree, govern the community's rate of development. And there are other areas in the Merced area that are planned for development. : Merced is a town of modest means. How does that influence your approach? GRAVES: It certainly has affected our negotiations with the city, especially regarding the infrastructure and how the city provides services to the campus. I tell people, this is not like BMW coming into Alabama. : The school will have to attract students and faculty. How big a consideration is that in the land use planning? GRAVES: That was a guiding principle of the Long Range Development Plan and something that even the regents insisted upon as they looked at the design of the original buildings. And the same kind of attention has to be given to the community. We want it to be attractive to a really broad, diverse group of people. One of the goals of the Long Range Development Plan was to provide a campus setting that feels comfortable to students who come from families in which no one has gone to college before. : When planning this campus, how far ahead do you look – 20 years? 40 years? GRAVES: The Long Range Development Plan has a window of 25 years. When you start a campus, you don't set everything in concrete for 25 years. You understand technology may change, research may change. So you want something that is usable now but sustainable over time. We're relying on a strong grid system, some fundamental design that is timeless, and we're relying very heavily on landscaping as a unifying factor. We are building the campus two or three buildings at a time, and we definitely expect the buildings 15 years from now to be based on assumptions that we don't have today. Even such things as water treatment we are building in modules to accommodate new technology. : That must be difficult. GRAVES: Yes, it is, because you have to trade off between economies of scale and the realities of changing technology. We are assuming the next wave of buildings will be using fuel cell technology. We considered that for the first phase, but it just wasn't ready. For all we know, by year 15 or 20, another technology for energy production will be available, and we want to be able to adapt to that as well. : Is planning the campus and community enjoyable? GRAVES: Oh, it's enjoyable. How many planners get to do something like this? We're not correcting somebody else's mistakes. We're making the mistakes. I did my thesis eons ago on planning new towns in California. I went back and read it and found out how naïve I was.

A city's erroneous denial of a lot line adjustment application did not qualify as a temporary taking, the First District Court of Appeal has ruled. The court ruled that the City of Lafayette had legitimate reasons for handling the application the way it did and that the delay in approval of the application — which eventually was ordered by a trial court — was not unreasonable. The appellate court relied heavily on Landgate, Inc. v. California Coastal Com., (1998) 17 Cal.4th 1006 (see CP&DR Legal Digest, June 1998), in which the state Supreme Court held that the erroneous handling of a development application was not a temporary taking unless the government acted unreasonably. "This case fits like a hand in a glove with the rule established by Landgate," Presiding Justice James Marchiano wrote for the unanimous three-judge panel of the First District, Division One. "Resolution of the threshold issue of the legality of the lot line adjustment was a normal delay in the process of obtaining a permit pertaining to land use." The property owners in this case, Peter and Helen Loewenstein, built a house on a 3-acre parcel in Lafayette during the mid-1980s. A few years later, they investigated ways to build a second unit. The conditions of approval that went with the original four-lot subdivision that created their lot prohibited establishment of another parcel. So in early 1996, the Loewensteins purchased a 4,500-square-foot parcel where the East Bay Municipal Utility District had maintained a water tank. A corner of that parcel touched a corner of the Loewensteins' parcel. Then they reached an agreement to acquire a small portion of a neighbor's parcel so that that tank parcel would share a common boundary with their original lot. In September 1997, the Loewensteins applied for a three-way lot line adjustment to create a 1.07-acre parcel for their home, and a 2.12-acre parcel that included portions of three existing lots. The city's planning manager denied the application, a decision the Planning Commission upheld. The City Council conducted three hearings before adopting a resolution denying the application. The council determined that, by adjusting the lot line to make a fifth developable lot, the Loewensteins triggerred the city's subdivision regulations and the Subdivision Map Act. (The Map Act does not apply ordinarily unless one parcel is being divided into at least five new parcels.) The council reasoned that the fifth lot would be serviced by infrastructure constructed for the original four-lot subdivision. In September 1998, the Loewensteins sued, seeking to overturn the denial and to get damages for inverse condemnation. The case went through lengthy court proceedings overseen by no fewer than three Contra Costa County Superior Court judges. Ultimately, the court ordered the city to rescind its denial of the application, found that the city used the wrong standard to evaluate the proposed lot line adjustment, ruled that the city denied the Loewensteins "substantially all economically viable use of their property," and awarded the applicants $611,000, plus attorneys' fees. In November 2000, the city rescinded its denial. The city also appealed the judgment for damages and attorneys' fees, which the appellate panel reversed in part. The Loewensteins cited two cases: San Dieguito Partnership v. City of San Diego (1992) 7 Cal.App.4th 748 (see CP&DR Court Cases, August 1992), and Ali v. City of Los Angeles, (1999) 77 Cal.App.4th 246 (see CP&DR Legal Digest, February 2000). In San Dieguito, the court ruled that the city had used the wrong basis for rejecting a lot line adjustment application that reconfigured five parcels in a nine-lot subdivision. In Ali, the court ruled that a temporary taking had occurred because the city's refusal to grant a demolition permit was arbitrary and unreasonable. Loewensteins further argued the they qualified for the Landgate exception for unreasonable delays, pointing to the fact that the city had approved more than 200 lot line adjustments over 16 years. But the appellate court ruled that San Dieguito and Ali did not apply, that Landgate was the controlling precedent and that the Loewensteins' case did not qualify for the Landgate exception. "The city's reasons for rejecting the lot line revision application, as expressed in the official resolution, were based on concerns that the reduced area of the new parcels would not conform to the minimum lot size requirements for hillside lots, and that the application created a fifth lot in a duly restricted subdivision with improvements and utilities designed for four lots," Justice Marchiano wrote. "Even if the city incorrectly maintained that lot size and subdivision restrictions applied, the monitoring of the density and hillside slope requirements are legitimate government interests." The court also expressed skepticism at the Loewensteins' approach. "To avoid the city's concerns about building a fifth home, the Loewensteins argued they were not merging the tank parcel into the subdivision lot, but were pulling a section of the original lot out of the subdivision and placing it into the tank parcel," Marchiano wrote. "These fine distinctions, although accepted by the trial court's ruling that the city's view was wrong, do not make the city's valid concerns either legally unreasonable nor logically deficient." The Loewensteins argued that under the Penn Central takings criteria (Penn Central Transp. Co. v. New York City, (1978) 438 U.S. 104), the city's action qualified as a compensable taking because the delay interfered with their reasonable investment-backed expectations. But the court ruled that if Landgate applied, Penn Central could not. "A landowner can have no reasonable expectation that there will be no delays or bona fide differences of opinion in the application process for development permits," the court ruled. The court overturned the $611,000 takings judgment but allowed the Loewensteins to keep the attorneys fees awarded by the lower court. The First District did not consider the lower court's order to approve the lot line adjustment. The Case: Loewenstein v. City of Lafayette, No. A093590, 02 C.D.O.S. 11130. Filed November 13, 2002. The Lawyers: For Loewenstein: David Bowie, Bowie & Bruegmann, (925) 939-5300. For the city: E. Clement Shute Jr., Shute, Mihaly & Weinberger, (415) 552-7272.

California does not build many freeways. So as Caltrans has opened segments of the Interstate 210 freeway in Los Angeles and San Bernardino counties, the road has received an unusual amount of attention — especially regarding how the state actually built the freeway and what impact it will have on traffic congestion. The new segments of Interstate 210 runs parallel to Foothill Boulevard at the base of the San Bernardino from San Dimas, in Eastern Los Angeles County, about 20 miles to Rialto. Completion of the final eight miles to I-215 in San Bernardino is a few years away. But the most interesting, and easiest to overlook, aspect of the 210 Freeway's construction is the fact that it has altered the role of a major arterial street through a series of suburbs. For decades, Foothill Boulevard carried tens of thousands of commuters every day because the 210 dead ended on Foothill in the City of La Verne, and the nearest east-west freeway, I-10, was notoriously slow. When Caltrans completed the 210 freeway from Highway 57 in San Dimas to I-15 and into Fontana in November, much of the commute traffic disappeared from Foothill Boulevard. Most of the cities along the route — from west to east: La Verne, Pomona, Claremont, Upland and Rancho Cucamonga — see the traffic change as an opportunity to remake Foothill Boulevard in a fashion more friendly to businesses, shoppers and residents. Several officials have already noticed trade increasing at Foothill Boulevard establishments because locals can drive to the businesses during commute times without getting stuck in traffic jams. The cities have not coordinated their strategies and each city is approaching the issue a bit differently. La Verne, Upland and Rancho Cucamonga have been the most aggressive so far. La Verne has continued to implement a specific plan, Upland is following up on recommendations in a 2001 economic study, and Rancho Cucamonga is seeing the largest project in town get developed along Foothill. Some officials are also hoping that new freeway interchanges will spur economic growth in their cities. The market needs study and revitalization plan commissioned by Upland made clear the hurdles for overhauling Foothill Boulevard are high. The street is marked by numerous struggling commercial centers, vacant storefronts and, in places, a run-down feel. At the same time, most of the cities have other areas available for retail and office growth; moreover, the cities compete with each other for businesses that generate sales tax. The report by Economic Research Associates and Barrio Planners states, " here is an evident, visually obvious clear need for the transition of Foothill Boulevard property uses based on the presence of more than 200,000 square feet of vacancies, mostly caused by departed supermarkets, and more recently added to by the abrupt decline of tenancies at the east end of the city … where another 100,000 square feet is in the process of becoming vacant." The study predicted a turnaround would take five to seven years. While the study focused on the 4.1 miles of Foothill Boulevard in Upland, the findings apply to stretches of the thoroughfare in other cities, too. Upland undertook the study because the city sees the boulevard as an important asset, said Steven Dukett, Upland redevelopment director. The street's strength, especially now that the commute traffic is gone, is as a center of neighborhood commerce, he said. Since the study was completed in August 2001, Upland has adopted an incentive program, and has taken steps to annex an island of unincorporated territory along Foothill, which Dukett said has not been developed to city standards. The city intends to follow up annexation with creation of a new redevelopment project area. City officials also are working on a general plan amendment that will allow residential uses along Foothill. The general plan amendment should be in place this spring. "We have engaged in some open dialogue with property owners who have shopping centers with major numbers of vacancies," Dukett added. "We certainly didn't have that dialogue before." The city has also had some successes, as both Lowe's Home Improvement Center and Vons have opened new stores on Foothill during the last year. The Lowe's is in the western part of Upland, near Claremont, from which Upland officials hope to draw shoppers. Claremont has not yet developed a strategy for the newly unclogged Foothill Boulevard. "We're going to be doing some pretty extensive testing of traffic flows in January and February," said Scott Miller, Claremont economic development and redevelopment manager. Foothill through Claremont has been in a redevelopment project area since the 1970s. However, the street still sports a large number of underutilized parcels and buildings, and tax increment from the project area is flat, Miller said. Much of the development feels worn, especially on the west end, he said. Like Claremont, neighboring Pomona has done little planning for the new conditions on Foothill Boulevard, instead focusing attention on its downtown several miles to the south. In contrast, La Verne adopted a specific plan for Foothill Boulevard in 1989 and updated the plan 10 years later. For La Verne, Foothill Boulevard is the primary commercial corridor; Claremont and Pomona have shopping malls and commercial centers elsewhere. La Verne's detailed plan addresses everything from land uses and circulation to architecture, landscaping and public art. The latest version permits greater flexibility in commercial and office development, expands the permissible architectural styles, and encourages development closer to the street itself and less on-site parking. Farther east lies Rancho Cucamonga, which has undertaken significant infrastructure improvements along Foothill Boulevard as part of a 20-year-old redevelopment project. Rancho Cucamonga also has approved a huge retail, office and residential development on the north side of Foothill Boulevard at I-15. The 150-acre Victoria Gardens project will feature a "Main Street" shopping and entertainment district, major retailers and extensive multi-family housing. The city is also working with the developer, Forest City Development, on building a library, performing arts theater and events center. For now, the new freeway dumps motorists on the streets of Rialto, a city that lies between the I-15 and I-215 freeways. The city is "just coping" until Caltrans completes frontage roads to handle the through traffic, said Development Services Director Michael Story. Much of Rialto's vacant land lies along the freeway route, and encouraging development in that part of town has been difficult because of poor access, Story said. Four new freeway interchanges will change that. "It's really going to be a benefit," he said. Contacts: Steven Dukett, City of Upland, (909) 931-4103. Scott Miller, City of Claremont, (909) 399-5341. Michael Story, City of Rialto, (909) 820-2535.

A POTENTIAL Southern California water crisis reached new heights in December when the Imperial Irrigation District (IID) Board of Directors rejected a plan to sell roughly 6% of its Colorado River water allotment to the San Diego County Water Agency. "Without water, Imperial Valley is nothing," IID Board President Stella Mendoza said during a heated meeting at which the board voted 3-2 to reject a deal that had been months in the making. The deal was seen as key to the state reducing its reliance on Colorado River water that will not be available in the future because other states want to take their full shares of the water (see , December 2002). Interior Department officials said they would reduce California's use of the river starting this month unless last-minute negotiations made substantial progress. "Interior is not bluffing," agency Secretary Gail Norton told a Colorado River Water Users Association meeting in mid-December. "There will be an actual reduction." A reduction could have the biggest immediate impact on the Metropolitan Water District of Southern California, which has come to rely on 662,000 acre-feet of Colorado River water that has been "surplus." However, federal, state and some water agency officials said it is IID — which gets about three-fourths of the state's share of Colorado River water — that could feel the pain in the end. To which IID officials said, "See you in court." AFTER three days of testimony, the Ventura County Board of Supervisors voted 4-1 on December 18 to certify a supplemental environmental impact report and record a master tract map for the Ahmanson Ranch project. In winning tract map approval, developer Washington Mutual agreed to destroy one water well on the site that is contaminated and to cap or destroy other wells. The vote ended the latest chapter in one of the longest and most controversial development sagas in recent Southern California history (see , December 2002). A general plan amendment and development agreement for the 3,000-home project were approved by the board, also on a 4-1 vote, in December of 1992. Since that time, new rare species have been found on the site and opponents have raised concerns about the discovery of perchlorate in at least one well that might serve the project. High-profile Los Angeles environmentalists, such as movie director Rob Reiner and actor Martin Sheen, have continued to oppose the project, rallying high-level opposition nationally. In the most recent round of hearings, former President Bill Clinton placed a call of opposition to Ventura County Board of Supervisors Chairman John Flynn, and Carole Browner, Clinton's environmental protection administrator, testified against the tract map approval. After the vote, project opponents indicated they would probably sue to challenge the approval but also expressed renewed hope that Washington Mutual would sell the property to a state agency for open space. CENTRAL Valley farmers will hang onto their exemption from state water quality regulations for runoff for at least three more years. The Central Valley Regional Water Quality Control Board in December dropped a regulatory plan that would have ended the agricultural industry's 20-year exemption. Instead, the board backed a plan that calls for voluntary monitoring and reduction of pesticides. The board also said it would revisit the topic this year. The decision angered environmentalists, who threatened litigation. Industry representatives sounded moderately pleased but said they wanted to see the details of the board's plan. FORMER Carson Mayor Pete Fajardo has pleaded not guilty to a charge that he extorted $50,000 from an apartment complex owner who sought the city's assistance in converting the units into low-income senior housing. Fajardo was indicted by federal authorities in late November, as were current Carson Mayor Daryl Sweeney, two Browning-Ferris employees and a bankruptcy trustee. Most of the scandal involves alleged corruption related to waste-hauling contracts. Prosecutors also alleged Fajardo tried to extort $70,000 from a contractor on a city bridge-building project. THE Orange County Planning and Development Services Department decided to lay off 39 employees starting this month because financial troubles have swamped the agency. At least six senior-level planners and one-third of the county's building inspectors will lose their jobs. The job cuts came after county officials revealed the agency spent an $18 million "reserve" during the last three years and had a deficit of at least $2.5 million this fiscal year. Department Director Thomas Mathews, who blamed the deficit on a construction slow-down, proposed raising building permit fees by about 50%. But Orange County supervisors declined to hike fees until they received more answers about the agency's fiscal situation. A STUDY by the National Center for Public Policy Research's Center for Environmental Justice contends that Portland-style "smart growth" restrictions raise the cost of housing, encourage "suburbanization" and do not reduce automobile travel. The study says that more than one million "young and disadvantaged" families would not have been able to buy homes during the last 10 years if Portland's growth policies applied to major metropolitan areas nationwide because prices would have risen an average of $10,000 in 2002 dollars. The study, by Portland-based economist Randall Pozdena, reads like an indictment of the Portland approach, which places an urban growth boundary around the metropolitan area. "Insidiously, the burden of site-supply restrictions will fall disproportionately on poor and minority families," he writes. The study, called "Smart Growth and Its Effects on Housing Markets: The New Segregation," is available at www.nationalcenter.org. The National Center study came on the heels of a report by the Latino Issues Forum that recommends California and its local governments adopt a number of "smart growth" measures that the organization believes would boost Latino homeownership. The report by Massachusetts Institute of Technology urban studies and planning professor Michael Mendez urges establishment of jobs-housing linkage programs, increased redevelopment funding set-aside for affordable housing, laws that require 20% of all developments to be for low- and moderate-income people, a stronger housing element law and state-local fiscal reform. "Smart growth allows for the development of communities where individuals and future generations can achieve economic security, social well-being, and a higher quality of life, while preserving the ecological integrity of the region," the report states. The study, called "Achieving Equity: Reality and Prospects of Latino Homeowners in California," is available at www.lif.org/publications/reports.html. A NEW zoning ordinance that permits developments to have with retail businesses, neighborhood services and child-care facilities on the ground floor, and housing on upper floors, has received approval from the Los Angeles City Council. The mixed-use ordinance, which stemmed from recommendations by a housing task force, eliminates the need for developers to get variances for such projects. The city now must decide where to apply the new zoning. THE Fresno City Council has adopted a general plan that focuses growth in and near the existing city. Although not as aggressive as earlier proposed, the blueprint directs 80% of growth through 2025 inside the city's existing sphere of influence (see , September 2000). A PLAN that would athorize construction of six new gates and allow more passengers and flights at John Wayne Airport in Orange County was approved by the county and the City of Newport Beach in December. The plan essentially would extend a 1985 court settlement regarding airport operations. The plan would allow passenger growth of 25% to 10.8 million annual passengers by 2011. It also would permit an increase in gates from 14 to 20, and allow 16% more flights per day. The plan still needs Federal Aviation Administration approval. A SEAL Beach housing development was shut down by the California Coastal Commission until developer John Laing Homes and American Indians can reach an agreement on how to deal with 22 graves discovered during construction last year. Work on the 70-home project halted in September, when Indians and archaeologists confronted construction workers. Commission Executive Director Peter Douglas quickly issued a cease-and-desist order. Now the project is on hold until the commission approves a mitigation plan.

As 2002 was drawing to a close, forecasters with the National Oceanic and Atmospheric Administration announced that warming of the western Pacific heralded the arrival of an El Niño weather pattern. The influence of this periodically recurring phenomenon usually means heavier-than-usual winter rains for California. But even if California gets more than its average precipitation this winter, water scarcity — or at least the possibility of it — will dominate the state's environmental agenda during the next 12 months. Also high on California's agenda this year will be renewed conflict in the state's forests, and a debate over protections for wilderness and rivers. California's policymakers always obsess about water. It is the inevitable consequence of the state's mismatch between demography and geography. Still, several events coincide this year to give water policy even more prominence than usual. In the immediate future, water planners have to confront fallout from the December debacle in El Centro, where three members of the Imperial Irrigation District (IID) board left 17 million Southern Californians in limbo by rejecting a tortuously negotiated deal — endorsed by many of the valley's farmers — to sell water to the San Diego County Water Authority (SDCWA) and thereby enable the Metropolitan Water District (MWD) to continue receiving temporarily surplus Colorado River flows (see Page 1, , December 2002). Whether or not the IID-SDCWA deal goes through, and regardless of whether the federal government makes good on its threat to turn off the surplus tap, the high-stakes game of chicken between the IID board and the urban water agencies that covet IID's water foreshadows a troubled future. Similar conflicts will likely spread statewide in coming months as growing cities and suburbs try to slake their thirst by purchasing agricultural water in the problem-plagued transfer market. Even as MWD and SDCWA were getting stung by the IID, for example, the Met was hedging its bets by negotiating a contract to buy 205,000 acre-feet of water from Sacramento Valley irrigation districts. Several districts appear interested, and one — the Western Canal District of Richvale, which serves mainly rice growers in Butte County — has tentatively agreed to sell 26,060 acre-feet. That deal could be finalized this month, but there are rumblings of discontent similar to those that proved decisive in Imperial County and which will inevitably accompany any effort to move water from farms to cities. Agriculture-dependent communities fear that selling water means fallowing land, and reduced farm activity means less money flowing into the local economy in the form of wages and expenditures on equipment, fertilizer, pesticides and other products. The focus on water during the coming year is likely to intensify for two other reasons. One is the demise in the waning days of the 2002 congressional session of a Cal-Fed re-authorization and funding bill (the Senate approved the bill, but the House did not). The Cal-Fed failure leaves uncertain the federal commitment to the mammoth multi-agency effort, which is intended to revitalize the ailing San Francisco Bay-Delta complex — source of two-thirds of California's water supply. That issue will be back on the table this year. The other event likely to focus attention on water is the scheduled 2003 release of the latest update to the California Water Plan, the state's comprehensive forecast of supply and demand. Revised every five years and intended to serve as a framework for decisions by the state's water managers, the plan this time will include a major component focusing on the effect of global climate change on California's water supply. That evaluation is expected to offer little comfort to planners already unnerved by population projections, urban-rural squabbling and the infirmities of the state's aging plumbing system. A preview of sorts was provided in late November by a team of researchers from the Scripps Institute of Oceanography, the University of Washington, the U.S. Department of Energy and the U.S. Geological Survey. Their modeling, which used temperature data to predict likely changes in precipitation and runoff patterns for three major river systems in the West — the Columbia, Colorado and Sacramento — suggests a dramatic reduction in winter snowpack and an increase in winter rainfall. That will mean less water flowing into reservoirs from snowmelt during dry months, but more pouring in during flood-prone winter months when there is no room to store it. Rivers are the centerpiece of another issue affecting California during the next 12 months, as U.S. Sen. Barbara Boxer seeks support for a major wilderness bill. Her California Wild Heritage Act, S. 2535, would designate 43 new federal wilderness areas in the state totaling 1.2 million acres, add 1.2 million acres to existing wilderness areas, bring another 473 miles of streams under protection as "wild and scenic" rivers, and establish several other conservation and study areas. Companion measures were introduced in the House by Reps. Hilda Solis (D-El Monte) and Mike Thompson (D-Napa). Only one piece of legislation in state history has encompassed more wilderness acreage: Sen. Dianne Feinstein's California Desert Protection Act of 1994. When the wild and scenic rivers component is added, Boxer's bill ranks as the most far-reaching California wilderness bill ever introduced. Although the state Legislature and numerous environmental organizations have endorsed the bill, many rural counties oppose it. More importantly, Boxer's proposal will face scrutiny from a Congress in which key committees are dominated by Republican lawmakers unsympathetic to environmental legislation; even if the bill should leap that substantial hurdle it would land on the desk of a president who is unlikely to sign it. California also is likely to be among the first states to feel the effects of the Bush administration's move to speed "thinning" operations in national forests to reduce wildfire danger. Announced in early December — just two weeks after the administration proposed new regulations allowing individual forest managers to adopt long-term management plans without subjecting them to lengthy public environmental reviews — the proposed thinning regulation would exempt brush and tree removal from environmental review and challenge if undertaken to reduce fire danger. Both proposed sets of forest regulations could be in place by summer. The National Forest Service has identified 10 sites nationwide for pilot thinning projects, two of which are in California's Mendocino and El Dorado national forests. The proposals have been denounced by environmental groups, which say the Bush Administration is using an exaggerated threat of fire as an excuse to circumvent the National Environmental Policy Act and open national forests to commercial logging without proper evaluation or public input.

I have a cranky thesis about housing: Working-class people should not be forced to live in projects that advertise the poverty of the residents. "Welcome to Casa Pobreza! We Have Pride in Ourselves — Even if Nobody Else Does!" Instead, low-income housing should be indistinguishable from the full-price product, including the same level of design and construction. And that means that developers should probably spend as much to build affordable housing as the market-rate stuff — possibly more, because low-income housing tends to receive less maintenance over the long-term than fancier units, whose owners can afford to repaint and re-roof them periodically. That thesis is one reason why North Beach Place provides a powerful dose of reality. This development near San Francisco's Fisherman's Wharf delivers pretty much everything I could wish for in affordable housing: An attractive project in a desirable part of town, good architecture and urban design, and even high-quality retail. The price of this project, on the other hand, knocks the wind out of me: $106 million of which $93 million is the construction cost of 341 housing units. According to my arithmetic, that means each unit costs an average of $272,000. The price of affordable housing units varies widely by city and neighborhood, but many nonprofit organizations try to budget individual units at slightly more than $100,000. The high price of the North Beach units seems especially pertinent because the project has received tax credits worth $55 million, reportedly the largest amount ever awarded to a single project in California. Given the scarcity of tax credits, is this the best possible use of this money? Designed in the storefront style that puts retail at the street level and apartments on upper stories, the new complex is built on a two-block site formerly occupied by an aging, bunker-style type of public housing that had become a neighborhood eyesore. North Beach Place replaces the 229 units of public housing contained in the former complex, while adding another 112 units of low- and moderate-income housing, including units for seniors, others that are accessible to people in wheelchairs, and still others for people with sight and hearing problems. The new units charge rents on a sliding scale, depending on the income of the renters, who will pay one-third of their monthly income in rent. (That will range from $250 a month up to $1,500.) The developers are The BRIDGE Housing Corporation, the Stewart Company and E.M. Johnson Interests, all of San Francisco. From the point of view of architecture and urban design, North Beach Place is a model of how to integrate low-income housing seamlessly into an affluent community. This project is a mixed-use complex that combines public housing units with low-and moderate-rate units, including several dozen units designed for seniors. At the center of the two-block project is a turnaround for trolley cars, qualifying North Beach Place as transit-oriented. And the building provides 34,000 square feet of retail space, including an outlet of Trader Joe's, the discount/gourmet grocery store. The presence of a popular retail anchor like Trader Joe's means residents of the entire neighborhood will use the building, which helps weave the project into the fabric of the neighborhood. The project also contains 3,000 square feet of "incubator" space in which residents can start their own businesses. All of these urban planning and social aspects are commendable. But, again, what about the money? Ironically, the financing scheme for North Beach Place is actually less complicated than those of many smaller low-income housing projects, which often require eight or nine different funding sources. North Beach Place has "only" five: HUD has contributed $23.2 million, which includes a $3.2 million demolition loan and a $1.45 million loan for counseling and other services to displaced residents (which represent about two-thirds of the renters in the prior project). The Mayor's Housing Office contributed $10 million to the project. Citibank provided a construction loan of $81 million for the housing, and a separate $4 million loan for the commercial space. The affordable housing program of Federal Home Loan Bank provided a $1 million grant. Those loans will be paid off, in part, by the proceeds of selling the low-income housing tax credits to investors, for an expected $48.5 million. The federal tax credits, worth $38.5 million, will be paid out in equal installments during a 10-year period, while the state credits, worth about $17 million, will paid over four years. On average, the developers expect to receive about 86 cents on the dollar for the tax credits — a surprisingly slim discount that attests to the growing appeal of the credits to investors: In 1993, the sale of tax credits yielded 54 cents on the dollar. Why is so much money being spent on a single project? Barbara Smith, a project manager with the San Francisco Housing Authority, has heard the question before. "That is the cost of doing business in San Francisco," she told me. Fortunately, the San Francisco Housing Authority already owned the 4.9-acre site, which would have been unthinkably expensive in the high-rent North Beach district. The site, however, was costly in different ways. The site is located on fill—a type of soil notorious for liquefying during earthquakes. To keep the building safe, construction workers must drive piles about 60 feet deep. Other costs include remediation of lead traces in the soil, and the removal of underground fuel-storage tanks. Smith sounded ambivalent about the project costs. "We wanted to maximize the density of the site, and there are not a lot of opportunities to build affordable housing in San Francisco," she said. It is not news to anybody in the affordable-housing industry that building housing in dense urban areas — especially housing that a crank like me can love — is expensive. But in a state that needs thousands of affordable housing units, the budget of North Beach Place is a reminder that our housing dollars only go so far. You remember the old joke in which the bartender observes that he does not see many kangaroos in his tavern. "At these prices," the kangaroo replies, "you may not see many more."

The California Coastal Commission has the authority to review an extension of offshore oil drilling leases that the federal government granted to oil companies, the Ninth U.S. Circuit Court of Appeals has ruled. The unanimous three-judge panel upheld a district court decision that said the extension of oil drilling leases was subject to review by the state under the federal Coastal Zone Management Act (16 U.S.C. Sections 1451-1465) and that the federal government did not adequately document that the extensions were exempt from environmental review under the National Environmental Policy Act (NEPA). The case was seen as an important one in determining the state's ability to regulate drilling in coastal waters outside the three-mile-wide coastal zone that is directly under state control. At issue were 36 leases for oil and gas drilling several miles off the coast of San Luis Obispo, Santa Barbara and Ventura counties. Federal regulators granted the leases between 1968 and 1984. All the leases have been extended ("suspended" in federal parlance) in the past or the leases would have expired years ago because the four companies that own the leases have not produced paying quantities of gas and oil. The latest round of suspension was approved in 1999 and was the subject of the litigation. When the lessees requested suspension of all 36 leases in May 1999, the state Coastal Commission said it intended to review the suspensions for consistency with the California Coastal Management Plan. Federal agencies said the state had no authority to intervene and approved the suspensions. California then filed suit against the Interior Department and the four energy companies, arguing that the United States had violated the federal Coastal Zone Management Act and NEPA. U.S. District Judge Claudia Wilken ruled for the state. The Interior Department and the lessees appealed, but the Ninth Circuit upheld the lower court. The Interior Department argued that allowing the state to review lease suspensions would be duplicative because the state would get to review exploration or production activities that take place under the leases. Congress explicitly barred repeated review of activities described in exploration, development or production plans, the federal agency argued. But the Ninth Circuit ruled that Congress itself had rejected the Interior Department's line of reasoning. In 1990, Congress passed a bill overturning the decision in Sec'y of the Interior v. California, 464 U.S. 312 (1984), in which the U.S. Supreme Court held that a lease sale was not subject to consistency review by the state. "Congress has made it clear that the statute does not prohibit consistency review of federal agency activities that are not subsidiary to exploration, and development and production plans," Chief Judge Dorothy Nelson wrote for the court. "The exploration plan and development and production plan are not the only opportunities for review afforded to states under the statutory scheme." Nelson noted that the state and its counties have never had the chance to review the leases, all but one of which predate adoption of the state Coastal Management Plan. The court also rejected the Interior Department's contention that no environmental documentation was required because the lease suspensions were categorically exempt, and none of the exceptions to the exemption applied. Instead, the court sided with the state and environmental groups. They argued that the lease suspensions were not exempt from review because of changed conditions, including the expansion of territory toward the lease areas by the threatened sea otter, and the designation of the Monterey Bay and Channel Islands national marine sanctuaries. "In many instances," Nelson wrote, "a brief statement that a categorical exclusion is being invoked will suffice. Here, concern for adequate justification of the categorical exclusion is heightened because there is substantial evidence in the record that exceptions to the categorical exemption are applicable. … he agency must at the very lease explain why the action does not fall within one of the exceptions." The court pointed to regulatory provisions for endangered or threatened species and for ecologically significant or critical areas. The court also noted that Gov. Gray Davis and U.S. Sen. Dianne Feinstein have expressed reservations about the lease suspensions because of the infamous 1969 offshore oil spill near Santa Barbara. The court did not order preparation of an environmental impact statement. The court only required the Interior Department to provide a "reasoned explanation for its reliance on the categorical exclusion." The Case: State of California v. Norton, No. 01-16637, 02 C.D.O.S. 11546. Filed December 2, 2002. The Lawyers: For California: Jamee Jordan Patterson, supervising deputy attorney general, (619) 645-2001. For Norton: Thomas Sansonetti, assistant attorney general, (202) 514-2000.

Following a meager five-point victory against a bumbling opponent and facing an 18-month budget deficit estimated at $35 billion, Gray Davis will be sworn in this month for his second term as governor. He will govern a state whose voters are perfectly happy with a suburban lifestyle, at least according to the polls. So it would not seem likely that Davis is in a position to do anything innovative or trailblazing in the area of land use planning and growth policy during his second term. Yet there is probably more second-tier scuttlebutt about growth going on in Sacramento these days than at any time in recent history. Sacramento is overwhelmingly Democratic, which increases the chances that growth policy will be substantially altered. And as a lame-duck politician — he's termed-out as governor and has already announced that he will not run for president in 2004 — Davis may well be tempted by that dangerous political phenomenon known as "legacy time." In other words, something might happen on growth policy during the second Davis Administration in spite of the circumstances. Success in other states Davis is neither a visionary nor a policy wonk, and he is one of the most risk-averse politicians in recent American history. These characteristics are almost exactly the opposite of most governors during the last 30 years who have taken on growth as an issue. Maryland's Parris Glendening, for example, was a true policy wonk. A former government professor at the University of Maryland who had won narrowly the first time out, Glendening fully expected his "smart growth" effort the further weaken his chances for re-election. In the end, it did not and he won re-election easily. Furthermore, Davis's administration has never made growth per se a major issue — at least, the governor has never framed the growth issue in a comprehensive and coherent way. His predecessor, Pete Wilson, who was regarded as a growth management guru during his mayoral days in San Diego, tried hard to frame the growth issues coherently and comprehensively, though he proved unable (or unwilling) to do much about it before he left office four years ago. And even Davis's opponent Bill Simon, who ran probably the worst gubernatorial campaign in recent California history, put out a coherent position paper that took on the issues in a sweeping fashion. As the first Democratic governor in 16 years, Davis was able to bring a collection of interesting growth policy thinkers into his administration. Caltrans chief Jeff Morales has reoriented the transportation agency around urban planning. Julie Bornstein, the director of the Department of Housing and Community Development, is a strong advocate who has been innovative. Resources Secretary Mary Nichols is an experienced urban environmentalist who understands growth issues well. Even the Health and Human Services Secretary, Grantland Johnson, is an experienced and knowledgeable growth policymaker because of his long experience as a Sacramento city council member and county supervisor. How many welfare czars know what a lot split is? The fact that all these Davis appointees are interested in growth is one of the reasons that the issue won't go away. Another is the fact that the Democratic legislature won't let go of it either. The Smart Growth Caucus is not overpowering politically, but it has gained enough strength to get some bills to Davis's desk. And a final factor is that the voters — even though they are happy with suburban living, according to the latest Public Policy Institute of California poll — keep approving big bond issues that are sure to shape the state's future growth patterns. The net result of all these forces is that Gray Davis has been handed two potentially strong and powerful tools to shape growth policy in the state no matter how big the state budget deficit is. The first is AB 857, the bill that requires state agencies to integrate their capital spending consistently around a set of "smart growth" principles (see , October 2002). The second is the tens of billions of dollars in state bond funds that voters have approved for schools, open space, housing, and other facilities important to future growth. Conceptually, the new law and all the bond money form the outlines of a California version of the Maryland smart growth strategy — a coherent policy of state investments to direct future growth that does not step on local land-use decision-making powers. More practically, they are ultimately about the use of power and money at the state level. For whatever he may lack in vision, wonkiness, and guts, Gray Davis understands how to use power and money in Sacramento to accomplish goals that are important to him. So far, the Davis administration has talked an impressive line about implementing AB 857, which calls for the state to make infrastructure investments based on promoting infill, encouraging compact development, and protecting environmental and agricultural resources. The Governor's Office of Planning and Research (OPR) has been on the conference circuit since fall telling local planners and electeds that the administration is serious about the bill. (AB 857 also dovetails with an ongoing General Plan guidelines revision that OPR is preparing.) At this point, Davis has put OPR in the hands of Tal Finney, a high-energy, high-level political operative who is close to Davis and his inner circle. A home run for bonds? Using the bond funds to effect change in state growth policy will be trickier. The vast majority of the money is earmarked for schools, and as Glendening discovered in Maryland, the school bureaucracy is more resistant to attaching smart growth strings than even the pavement crowd. Some of the other bond money — open space, for example — is already earmarked for specific projects or will go to local governments on a formula basis. Further, the bonds came out of the Legislature with certain rules and expectations that were shaped largely by Senate leader John Burton, who is the most powerful legislator in Sacramento, but not one particularly interested in growth policy. But to an extent, bond funds can be used to leverage a certain growth pattern. Bond money could even reinforce the policy choices created by AB 857. Davis appears perfectly capable of using these levers if he wants to. The question is whether he wants to. During his second term, Davis will almost certainly be obsessed by two things that would seem to be in contradiction to one another: The budget deficit and his legacy. It is difficult to imagine how a strong growth policy fits into either one of these obsessions. There is always the argument that smarter growth policy will reduce infrastructure expense and, therefore, cost the state less money. But recent experience suggests that during bad budget times, California fiscal conservatives would rather not spend infrastructure money at all. Given the fact that he will be out of office by 2007, Davis will almost certainly choose not to build things, rather than decide to build them smarter or most cost-effectively. Put another way, Davis likely will implement short-term solutions rather than address the long-term problem. He would not be the first governor to follow this path. As far as the legacy goes, the recent open space bonds provide the governor with an opportunity. It will be very tempting to build the legacy with a few high-profile open space purchases, such as Ahmanson Ranch adjacent to Los Angeles (see , December 2002). It's more difficult for a lame-duck governor whose general fund is evaporating to make strategic open space decisions that protect habitat or farmland and guide growth in a reasoned manner — especially when those decisions fail to generate headlines, and might even anger people. So, can we expect to see a comprehensive growth strategy emerge during the next four years? Maybe. But it is more likely that we will see a lot of muddling through. A few bills here and there will inch things forward, and smart growth moles in the administration will embed smart growth values in a bunch of small programs or bond criteria. Given a governor who received less than half the vote and a $30 billion-plus deficit, maybe that is the best we can expect.

Urban transportation panacea or mobility-oriented snake oil? The Segway Human Transporter is either, depending upon whom you ask. The device either will change the way we get around in cities, or it will be the pedestrian-version of the Edsel. No matter, we should gird ourselves for statewide debates during coming months regarding regulation of the Segway HT (or simply "the Segway"). For those who missed the heavily orchestrated publicity events — most recently a video press release including the device's inventor Dean Kamen and Amazon.com founder Jeff Bezos — the Segway is a personal transportation device that looks like a pogo stick with Frisbee-sized wheels. With the aid of gyroscopes and other technology, the device can purportedly stop and turn on a dime. The invention travels up to 12 miles per hour. That speed is faster than many people ride a bicycle and four times faster than the average pedestrian's pace. Segway retails on Amazon.com (the exclusive distributor) for $5,000. Segway entrepreneurs have claimed that it will revolutionize urban mobility by extending the range of "walking trips," thus getting more people out of cars. The specific selling point seems to be the device's usefulness in highly urban settings, which should draw interest from urban planners dealing with transportation, recreation, or the land-use and transportation connection. New Hampshire-based Segway has captured the imagination of many a high-tech devotee, and the company has cleverly worked 32 state legislatures into rewriting vehicle codes to accommodate the Segway. In addition to gee-whiz lobbying in which lawmakers got to ride on the provocative device, Segway has been busy with loaner and limited sales programs to government and industry to gain broader acceptance — notably with law enforcement agencies. Though the blitzkrieg lobbying has met with resounding success before the public has had a chance to understand what the Segway is, concerns are already surfacing. Within weeks of an April launch of a loan and limited-sale program in Atlanta, a downtown safety officer was injured using the device on a driveway. The lobbying activity reached California earlier this year, and Gov. Davis signed SB 1918 in September. Carried by East Bay Democratic Sen. Tom Torlakson, the law actually classifies a user of the 84-pound mechanized transporter as a pedestrian. This means that use on sidewalks is granted statewide unless otherwise prohibited by a local agency. According to the law, Segway riders are not allowed in places where pedestrians are not permitted, such as streets and bike lanes. It is up to local government to disagree formally through prohibition ordinances. The law takes effect in March 2003. Not so fast, say the state's most organized pedestrian advocacy groups. Despite the Legislature and governor's stamp of approval, cities and counties own and maintain most of the state's sidewalks. Walk San Francisco, and the Senior Action Network stand firmly opposed to Segway use on sidewalks. With the help of San Francisco Supervisor Chris Daly, they successfully lobbied for passage of the first Segway ban in the country in San Francisco in late November. "We are not against the Segway," said Michael Smith, President of Walk San Francisco. "But since 1940, San Francisco has prohibited vehicles on public walkways. The Segway is a vehicle. We see it as a pedestrian SUV. Its riders will be able to muscle over walkers. Segways belong in the street with other wheeled vehicles, like bicycles. To allow Segway's promoters to elbow onto pedestrian walkways is to invite major safety problems." Smith said a host of other Northern California cities, including Berkeley, San Jose, and Santa Cruz, are currently looking at San Francisco's ordinance banning the Segway. Other alternative transportation groups are equally skeptical. "The Segway invention is an exciting thing," said Christy Kimball, Northern California campaign manager for the Surface Transportation Policy Project. "It holds an incredible potential to replace short car trips. However, we need to be realistic about where it belongs on our streets. The widespread use of Segway will require a new type of street design that better accommodates slow vehicles. Rather than restricting Segways to sidewalks, as the state law does, it would make a lot more sense to allow Segways to use bikeways or slow streets or shoulders of all streets. The transportation opportunities and constraints have not been properly thought through." Torlakson's bill essentially shifted the debate to the local level. The grass-roots protest and subsequent ordinance in San Francisco are likely precursors to discussions in council chambers and supervisor hearing rooms across the state. And the dearth of data on market acceptance, pedestrian safety, sidewalk capacity, and potential Segway/automobile/pedestrian conflicts, promises to make for a debate that will be short on information and long on speculation. If Kamen's invention does not end up really changing the way we move through cities, it will certainly raise the level of discussion about how we ought to move through them. And it provides a startling lesson in how a quirky invention coupled with a slick lobbying campaign can sway politicians desperate to be a part of the next trend – whether well thought out or not.