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In the San Diego suburb of Santee, it's the old houses versus open space controversy — but with a twist. In November, Santee voters will decide the fate of a 2,988-lot subdivision already approved by the City Council. The twist comes in the form of an advisory measure on the same special election ballot that asks if the City Council should try to buy the property as permanent open space. The City Council approved the subdivision, golf course and hotel for the Fanita Ranch in May, but opponents of the development then qualified a referendum for the ballot. The referendum on the City Council's action is standard-issue, which could allow the advisory measure placed on the ballot by the City Council to steal voters' attention. The measure asks whether the City Council should pursue purchasing the Fanita Ranch as permanent open space if voters reject the proposed development. The advisory measure says the land purchase could result in a tax increase of up to $150 per residential parcel. The exact amount and style of assessment would have to be decided later. Neither the developer nor project opponents supported the advisory measure because both fear the measure will cloud the referendum. "This is certainly the largest project in the city's history, and the largest that we ever will experience," said City Development Services Director Doug Williford. The Fanita Ranch covers about one-quarter of the city and contains the majority of the remaining undeveloped property in the city of 57,000. The fate of the 2,589-acre Fanita Ranch has been a topic of discussion for decades, with development proposals coming and going. All the while, residents of this community about 15 miles east of downtown San Diego used the site's rugged hills for hiking, mountain biking and even camping trips. Now, the 19-year-old city is deeply divided. Robin Rierdan, of Preserve Wild Santee, the group behind the referendum, called the project "a betrayal of the general plan and a betrayal of the community." But developer Bill Meyer of Terrabrook contended the project will provide needed homes, fund park upgrades and provide money for Highway 52 widening. "It provides a mix of housing products, from single-family attached to estate lots, so it will provide housing for a wide variety of income levels," Meyer said. Williford characterized the homes as mostly upper-end models. But he pointed to the large number of concessions Terrabrook has made that benefit the city. The specific plan, general plan amendment and tentative map approved by the City Council calls for 2,604 single family homes on lots ranging from 2,500 square feet to one acre, plus 384 multi-family units. The project also calls for a golf course and 100-room inn, and a 15-acre neighborhood commercial center. Development would occur over an eight- to 12-year period, with much of the 1,400-unit central village coming on line in the early stages, Meyer said. Terrabrook would leave 1,259 acres — nearly half the site — as a habitat preserve with a public trail system, Williford explained. Also, the developer must: purchase 210 acres in the city of San Diego for additional habitat; pay a $22 million fee to Santee and provide $6 million worth of off-site park improvements before receiving building permits; and construct three parks, two elementary schools and a fire station. The city will use the $22 million for major projects, which potentially include additional lanes on Highway 52, park improvements, street upgrades and a new library, Williford said. Although growth has its opponents in Santee, voters in November 1998 rejected a proposition that would have limited Fanita Ranch development to 1,277 homes. Rierdan, a project opponent and initiative supporter blamed the defeat of the Santee Traffic Relief Act on being outspent 40-to-1 by development interests. Rierdan said many people had earlier assumed the Fanita Ranch would remain in its natural state because it was part of a Multi-Species Conservation Plan adopted about five years ago by the U.S. Fish & Wildlife Department. However, USF&W officials later approved a plan that allowed partial development of Fanita Ranch in exchange for preserving property elsewhere. An additional 3,000 homes would compound Santee's existing circulation problem, Rierdan said. "Traffic is a huge issue in our community. It takes people hours to get to work. It's a huge issue on our surface streets in town, and it's a huge issue on our freeways," she said. Meyer conceded that traffic is the biggest issue, but he contended that the project will ease highway congestion. A portion of the $22 million fee will leverage state funds and ensure a third lane is built on Highway 52 in each direction between Santee and Interstate 15, even though the Fanita Ranch will add only about 4 % more vehicles, he said. "The bulk of the existing streets in Santee were built assuming a Fanita Ranch of 3,500 to 5,000 units, despite what the opponents might say," Meyer added. Meyer said he appreciated the sentiment behind the advisory measure — a community must pay for its open space — but said he feared the measure could harm Fanita Ranch development at the polls. "The concern I have with it is that voters get confused or get mad when they see something like that and they just vote ‘no' on everything," Meyer said. Meyer said he is happy to have a special election in November for the referendum because he wants an answer as soon as possible. Contacts: Doug Williford, Santee Development Services Department, (619) 258-4100, ext. 170. Robin Rierdan, Save Wild Santee, (619) 448-1779. Bill Meyer, Terrabrook, (619) 455-1234.

In renewing federal hydropower licenses, The Federal Energy Regulatory Commission does not have to consider the hypothetical question of what the environmental conditions would be if the dams in question were never built, the Ninth U.S. Circuit Court of Appeals has ruled. The Ninth Circuit also ruled that while FERC must consider environmental concerns raised by the Interior and Commerce Departments, the commission has final discretion to address those concerns. But in writing the unanimous opinion, Ninth Circuit Judge Kim McLane Wardlaw, went out of her way to make it clear that while FERC's environmental decisions were legal, they were not necessarily good. "We express no opinion on the merits of the Commission's environmental findings," she wrote. "Moreover, we stress that nothing we have said should be construed as eviscerating the pro-environmental object beneath the ECPA amendments." ECPA is the Electric Consumers Protection Act of 1986, which established the relicensing procedures. The ruling came in a case in which several environmental groups and the Interior Department challenged FERC's decision to renew the federal hydropower permits for two dams located on the McKenzie River in Lane County, Oregon. The environmental groups argued that FERC had not conducted adequate environmental analysis under the National Environmental Policy Act, and also had violated sections of the Federal Power Act that require construction of fishways when the Interior and Commerce Secretaries claim those fishways are appropriate. In 1997, FERC renewed the hydropower licenses of the 14.5-megawatt Leaburg Hydroelectric Project, originally built in 1930, and the 8-megawatt Walterville Hydroelectric Project, originally built in 1911, for a period of 40 years. The Leaburg project, which creates a 57-acre backwater, has two fish ladders, only one of which is operational. The Walterville project has no fish screens. Together the projects divert water out of the McKenzie River for a total of 13 miles. The proposal to renew the license called for a slight increase in the project's generation capacity, as well as increases in the water level at Leaburg Lake and minimum flows in the bypasses. The Interior Department and the Commerce Department proposed a total of 56 environmental mitigation measures. FERC adopted some of them, including the construction of fish ladders and fish screens. But the commission rejected many others as being outside the scope of the FPA provisions that give Interior and Commerce the power to require "fishway prescriptions." In considering the license renewals, FERC prepared an environmental impact statement under NEPA. The EIS included five alternatives, including a "no-action" alternative that contemplated a continuation of the existing operation. Other alternatives included issuing the permit with more environmental mitigations, issuing a non-power permit that would have retained the dams without generating power, or retiring the project. After issuing the final EIS, FERC initiated an "alternative dispute resolution" effort in an attempt to reach a negotiated solution. These meetings narrowed the points of controversy to three areas: (1) whether to raise the water level of Leaburg Lake, (2) whether to install diversion dams at the Walterville facility, and (3) what the appropriate minimum flows at the bypasses should be. FERC resolved these issues to its satisfaction, but Interior Secretary Bruce Babbitt subsequently filed modifications requiring more fish screens. Claiming that it was not required to abide by this modification, FERC rejected these additional requirements. Subsequently, the Interior Department, the National Marine Fisheries Service, Oregon Department of Fish & Wildlife, and a group of environmental organizations filed suit. In court, the resource agencies and the environmental groups argued that FERC had chosen the wrong "baseline" scenario for the EIS analysis. They claimed that rather than using existing conditions, FERC should have chosen a theoretical reconstruction of what the McKenzie River would be like at present if the two dams had not been built. The court rejected this argument. Among other things, Judge Wardlaw noted that the congressional conference report on the ECPA in 1986 stated that " n exercising its responsibilities in relicensing, the conferees expect FERC to take into account existing structures and facilities in providing for these nonpower and nondevelopmental values." Even if the dams had not been erected, the valley would not be the same place today as it was before 1911, the court said. Judge Wardlaw wrote: "It defies common sense and notions of pragmatism to require the Commission of license applications to ‘gather information to recreate a 50-year-old environmental base upon which to make present day development decisions.' The past fifty years of development in the McKenzie River Valley has reconfigured its environmental makeup, introducing changes that include differences in land use, water flows, water quality, river geomorphology, fish species composition, and fishery management practices. To the extent a hypothetical pre-project or no-project environment can be recreated, evaluation of such an environment against current conditions at best serves to describe the current cumulative effect on natural resources of these historical changes." The Ninth Circuit panel also rejected the argument of the resource agencies and environmental groups that FERC did not adequately consider the alternative of removing the dams. The resource agencies and environmental groups also argued that FERC, under § 10(j) of the Federal Power Act, must accede to the Interior and Commerce secretaries on "fishway prescriptions." The court disagreed. "The Commission must afford ‘significant deference to recommendations made by state (and federal) fish and wildlife agencies for the "protection, mitigation, and enhancement" of fish and wildlife,'" wrote Wardlaw, quoting from Kelly v. Federal Energy Regulatory Commission, 96F.3d 1482 (D.C. Cir. 1996). "Nevertheless, Congress clearly has ordained that this deference must yield to the Commission's reasoned judgment in those instances where the parties cannot agree." The Case: American Rivers v. FERC, No. 98-70079, and Oregon Department of Fish & Wildlife v. FERC, No. 98-70084, 99 C.D.O.S. 6411. The Lawyers: For American Rivers: Todd D. True and Kristen L. Boyles, Earthjustice Legal Defense Fund, Seattle. For Oregon Department of Fish & Wildlife: Jas Jeffrey Adams, Oregon Department of Justice, Salem, Oregon. For U.S. Department of the Interior: Sean H. Donahue, U.S. Department of Justice, Environmental & Natural Resources Division, Washington, D.C. For FERC: John H. Conway and John S.L. Katz, FERC, Washington, D.C.

The row crops and cattle ranches of San Benito County are remarkably similar to those of Santa Clara County during the pre-Silicon Valley era. But, just as the computer chip has transformed Santa Clara County into one of the world's great industrial centers, it is now exerting influence on rural San Benito County, where land remains available and relatively inexpensive. San Benito's predicament is the result of Santa Clara County's well-known jobs-housing imbalance. And the disparity only gets worse, according to the Silicon Valley Manufacturing Group, which has established a Housing Trust Fund Initiative. Since 1992, Silicon Valley has created 250,000 jobs, but only 50,000 housing units, according to the organization. In a market that is already off-kilter, the result is astronomical real estate prices. The median single family home price in Silicon Valley reached $392,000 this spring. Rental vacancies are rare, and double-digit rent increases are common. San Benito is only the latest county to feel the effects of the Silicon Valley economic machine. Portions of Alameda, Contra Costa, San Joaquin and Stanislaus counties have already been converted into bedroom communities. Silicon Valley workers often must commute an hour, 90 minutes or even longer each way to reach work. "We surrounding counties are Santa Clara County's affordable housing, which means there is no housing for our people," said Rob Mendiola, San Benito County planning director. Public and private agencies are taking a more active role the situation, which some people fear threatens continued economic growth. "Companies are starting to realize one of their biggest problems is attracting qualified employees," said Christina Perry, spokeswoman for the Silicon Valley Manufacturing Group. "They (recruits) get off the plane and look around at housing, and then they get back on the plane as fast as they can." Thus, the organization started the Housing Trust Fund, with the goal of raising $20 million during the next two years. Already, five companies — Adobe Systems, Applied Materials, Inc., Cisco Systems, Kaufman and Broad, and Solectron Corporation — have given $200,000 each. Also, Santa Clara County has provided $2 million and the City of San Jose has pledged $1 million to the trust fund. "When it comes to the housing issue, it's recognized across the board as critical," said Giesela Bushey, the Housing Trust Fund project director. "There's a lot of momentum behind this effort." The official fund-raising campaign is scheduled to begin in October, said Bushey, who was unsure when the first grants would become available. Community Foundation Silicon Valley will actually administer the funds. As designed, the Housing Trust Fund would provide about one-third of its money to each of three areas: housing for homeless and very low-income families, new and rehabilitated affordable rental units, and first-time homebuyer assistance with down payments and closing costs. San Jose increases efforts The City of San Jose, home to slightly more than half of Santa Clara County's 1.6 million residents, also stepped up its housing program this year. The city has financed construction or rehabilitation of about 8,500 units during the last 10 years. Under a program adopted by the City Council in April, the city would finance that many units during the next five years, said Alex Sanchez, the city's housing director. The plan calls for the city to take a larger role in development, rather than acting primarily as a lender. To meet the goal, the city has earmarked an additional $30 million for housing, Sanchez explained. Still, creativity is essential. For every dollar the city has spent in the past 10 years, the city has leveraged four dollars from banks, other government lenders and equity partners. Because of the high cost of development and the large subsidy necessary to make units affordable for low- and moderate-income families, up to six funding sources may be necessary for a single project, according to Sanchez. Redevelopment is a mixed blessing for the city. Cisco Systems, for example, plans 5 million square feet of industrial development during the next 18 months, all in a redevelopment area, Sanchez said. That sort of development will provide a great deal of tax increment to finance housing programs, but it also will demand thousands more workers. Less than two months after San Jose boosted its housing program for the next five years, mortgage lender Fannie Mae announced a multi-billion program for the same time frame. Fannie Mae's House Bay Area program will provide assistance throughout the Bay Area, but it pinpoints San Jose, San Francisco and Oakland. Officials said the program will help 13,000 San Jose residents find affordable homes. Fannie Mae will offer down payment assistance for low- to middle-income families, ease mortgage eligibility requirements for immigrants, loosen underwriting standards for people willing to live near public transportation, and provide other assistance. Too little too late? Even by conservative estimates, Silicon Valley needed 100,000 additional housing units yesterday to satisfy demand. And indicators point to an uglier housing situation. A 1997 study by the Hausrath Economics Group predicted job growth would be more than double the number of new housing units over the next 20 years. Since Hausrath completed the study, Cisco Systems announced plans for a 400-acre, 20,000-employee campus in south San Jose's Coyote Valley. In the City of Mountain View, in northern Silicon Valley, the 1992 general plan identified 1.5 jobs per employed resident, and the plan predicted 1.63 jobs per employed resident in the future. "It's essentially impossible to redress a jobs-housing balance at this late date," said Mike Percy, Mountain View's principal planner in charge of long-range planning. Because the city is 98 percent built-out, options are extremely limited, he noted. The city of 75,000 residents has added 7,000 to 10,000 jobs during the last five years, depending upon how one accounts for the recession. But only about 2,000 new housing units have been approved or are in the planning process, he said. About half of those units are on land previously zoned commercial. Bushey, whose Housing Trust Fund would initially assist about 5,000 families, said it is not too late to tackle the issue in Santa Clara County. But, she agreed, time is critical. Back in San Benito County Silicon Valley's latest relief valve lies to the south. San Benito County and its county seat of Hollister, about an hour's drive from San Jose, have felt growth pressure from their northern neighbor for about two decades, but that pressure has risen in recent years, said Mendiola San Benito's planning director. And 1999 could be a pivotal year, as the City of Hollister has reached its wastewater treatment capacity, and county officials are considering a measure that would limit growth. San Benito County — with a total population of 48,000 and an unincorporated population of 17,000 — already has applications for the 1,100-unit Northeast Fairview development just east of Hollister, and for Paicines Ranch, a 1,500-unit subdivision and golf resort 12 miles south of Hollister. There are rumblings about another 1,000-unit subdivision, and a handful of smaller projects are working through the system, said Mendiola, the county planning director. Plus, Cisco's Coyote Valley plan would put high-tech jobs even closer to San Benito County. The momentum is difficult to fight, as evidenced by the uproar over a proposed 1% annual growth cap in unincorporated areas. The Planning Commission sent the proposal to the Board of Supervisors without a recommendation. Well-paid Silicon Valley workers have already skewed the San Benito housing market. Now, it is not unusual for people working at lower-paying jobs in the Hollister area to live in Los Banos — a mountainous 50-mile drive away — because they cannot afford the local housing market, Mendiola said. Mendiola would like to see Silicon Valley share some of the commercial and industrial riches with San Benito County, which cannot afford to provide services to existing houses, let alone new ones. "We need to decentralize the jobs," Mendiola said. "From a planning perspective, I think we need to build balanced communities. But there is nothing that encourages that. In fact, our taxation policies discourage residential uses." Contacts: Rob Mendiola, San Benito County Planning Department, (831) 637-5313. Mike Percy, Mountain View Community Development Department (650) 903-6306. Alex Sanchez, San Jose Department of Housing, (408) 277-5817. Giesela Bushey, Silicon Valley Manufacturing Group Housing Trust Fund, (408) 501-7864. Housing Trust Fund Web page: www.svmg.org

The operator of a golf course on leased property was not entitled to compensation when a public agency condemned part of the property to accommodate a trolley line, the Fourth District Court of Appeals has ruled. The unanimous three-judge panel said the San Diego Metropolitan Transit Development Board (MTDB) was correct when it compensated the owner of the real estate, not the lessee. The court also said the lessee was not entitled to payments for loss of goodwill because of the trolley project. The Handlery Hotel owns a 217-unit hotel, swim and tennis club, and cinema on 15 acres in Mission Valley. For more than 40 years, Handlery leased a 200-acre parcel next door, on which it built and operated a 27-hole golf course. Handlery built a clubhouse and parking on its own land. Handlery paid $500 a month to lease the 200 acres from the owners, Chevron Corporation and the Levi/Cushman families. When Chevron, the general partner, took a more active interest in developing the property, Chevron advised Handlery it expected to net $1.2 million to $2 million annually from the golf course. In late-1993 and early-1994, Handlery and Chevron failed to agree on a new 15-year lease. At the same time, the transit board revealed its plans for the 6.2-mile Mission Valley West Light Rail Transit Extension from Old Town to Jack Murphy Stadium (now Qualcomm Stadium). Recognizing that Handlery's lease was about to expire, the transit board negotiated only with Chevron. (The transit board did use eminent domain to take five acres of Handlery's property, for which the transit board paid Handlery.) After its long-term lease expired, Handlery continued to operate the golf course under a short-term lease and a series of extensions. The final extension terminated when the transit board assumed ownership of a portion of the golf course property in September of 1996. Handlery sued for payment for pre-condemnation damages because the transit board had negotiated with Chevron. Handlery also requested compensation for loss of business goodwill. But the trial court concluded the transit board's actions "constituted neither unreasonable pre-condemnation conduct nor inverse taking." Additionally, the trial court ruled that transit board did not cause Handlery to lose goodwill. On appeal, Handlery argued that by entering into discussions with Chevron about redesigning the golf course away from the hotel to accommodate the trolley line, the transit board undertook unreasonable pre-condemnation conduct that amounted to inverse condemnation of personal property. Handlery further noted the transit board promised to compensate Chevron for a period when the course was closed. Handlery argued that the transit board's agreement to provide Chevron with an "in-kind" golf course lead to Chevron's termination of lease negotiations with Handlery, which deprived the hotel of conducting the golf course business on a long-term basis. But the Fourth District, Division One, of the Court of Appeals said Handlery was not entitled to compensation because it neither owned the property nor had a long-term lease to use the real estate. "Handlery's hypothetical lease resting on speculative expectation of renewal is not compensable," Presiding Judge Daniel Kremer wrote. Handlery's lost lease was the result of a business decision between two private parties, Kremer continued. "MTDB did not restrain Handlery," Kremer wrote. "MTDB was not included in the lease negotiations between Handlery and Chevron. … Handlery simply did not convince Chevron/PDR that it was in their best interests to continue their business relationship with Handlery as operator of their golf course." The Code of Civil Procedure, §1263.510, permits compensation for loss of goodwill, which is typically read as payment for instances when a business is forced to give up benefits of its location, the court said. But, citing Redevelopment Agency v. International House of Pancakes (1992) 9 Cal.App.4th 1343, the court ruled that only owners of real property may claim compensation for loss of goodwill. "None of the tees, fairways or greens for the golf course were located on Handlery's property," Kremer noted. The Case: San Diego Metropolitan Transit Development Board v. Handlery Hotel , No. D029645, 99 C.D.O.S. 5577, 1999 Daily Journal D.A.R. 7081, filed June 17, 1999, certified for publication July 12, 1999. The Lawyers: For SDMTDB: Bruce W. Beach, Best Best & Krieger, (619) 525-1300. For Handlery: Susan Hinz, (530) 247-8030.

In an unpublished opinion, the Fourth District Court of Appeals rejected a lawsuit over the November 1998 ballot measure approving financing for San Diego's new baseball stadium. Ballpark opponents, led by former City Councilman Bruce Henderson, argued that the city should have prepared an EIR ahead of time, that the measure required a two-thirds vote, and that Proposition C should have specified that the city would incur $225 million of new debt. The unanimous three-judge panel rejected all of the arguments. Regarding the EIR issue, the court said the election, which approved a memorandum of understanding between the city and the Padres, did not vest the Padres with any land-use rights, so it did not qualify as a project under the California Environmental Quality Act. " he city remains free to consider alternatives to the ballpark plan, including the ‘no project' choice, upon receipt of the EIR," Justice Gilbert Nares wrote for the three-judge panel. The two-thirds vote provision did not apply because the MOU did not commit the city to any form of financing, the court ruled. " inancing options are available which may be effected without a vote of the electorate," the court said. The case is Mailhot v. Abdelnour, No. D032123.

Although it shares a name with the ritzy wine-making region, the City of Napa has long been a mostly blue collar city with only weak links to the big-dollar wine and tourism industries. But downtown Napa, home to professional offices and mom-and-pop stores that close before dark, is about to become a player in the business of wine tourism, which brings 5 million visitors a year to Napa Valley. Legendary winemaker Robert Mondavi chose a 12-acre site on the eastern edge of downtown Napa for the American Center for Wine, Food and the Arts, a $50 million facility that organizers believe will attract at least 300,000 visitors a year. Other commercial activity in and near downtown includes: the opening this fall of a visual arts school for high-school age students, development of a convention center and hotel on the former Town & Country Fairgrounds, conversion of a 100-year-old industrial building into a waterfront retail market and spa, and the restoration of an 1879-era opera house. Clearly, the American Center is the cornerstone project. Mondavi, the man most responsible for Napa Valley's elite ranking in the wine world, is the chief financial backer. Other private investors are also contributing money to the center, which is a nonprofit entity, said Kurt Nystrom, deputy director for finance and operations. "We really think this is going to revitalize downtown," Nystrom said. "Here are these 5 million people driving by on Highway 29. Now we're going to get hundreds of thousands of them to turn off the highway and drive through town to get to the center," Cassandra Walker, the city's redevelopment and economic development director, agreed. "It's a significant impact for the city, which is trying to create a cultural and arts center downtown. It shows a commitment to downtown," Walker said. Downtown revitalization is not a new topic in Napa. The city created a 33-block downtown redevelopment area in 1969, demolished older buildings to make way for box-like retail stores and built an awkward parking garage, Walker said. Downtown hardly boomed, even though the small, "upvalley" cities of Yountville, St. Helena and Calistoga, 10 to 25 miles north of Napa, cashed in on the growing wine industry and tourist trade. Yountville, for example, gets half of its general fund revenues from transient occupancy tax. The American Center "is saying that downtown is part of the tourist economy," Walker said. The opera house renovation, which is near commencement after years of fund raising, is another asset. "That provides an ongoing entertainment center for traveling theatrical productions that we haven't had before. That really benefits locals as well as tourists who want something to do at night," she said. Walker and others hope tourists will tie a day of cultural events in downtown Napa with a visit to upvalley wineries. One catalyst for downtown Napa's renaissance is a massive flood control project that will remake the Napa River. The river flooded portions of downtown in 1995, 1996 and, to a lesser degree, 1998. In response, voters approved a half-cent sales tax that partially funds a $180 million Army Corps of Engineers' river project. (See CP&DR, May 1998.) Much of the river through downtown Napa is now obscured, but the project will open up the waterfront. And a six-mile bike trail along the river will provide public access all through town, said Heather Stanton, the city's project manager. "I think there will be more opportunities for restaurants and retail as a result," Stanton said. The City of Napa does not have the money to provide substantial commercial development subsidies, Walker said, but the American Center required few for a project of its size. Under the development agreement with the American Center, the city will provide about $1 million worth of improvements, such as underground utilities, landscaping and signs, she said. The center received an extended period to complete the project, for which ground broke in June. A grand opening is scheduled for Thanksgiving of 2001. The American Center will be built on a 12-acre oxbow that offers river frontage on three sides. Plans call for an 80,000-square-foot building and extensive outdoor displays. The center will explain the cultural and societal influence of wine and food in America, Nystrom said. The center will host seminars and touring art exhibitions. Proponents also plan a 150-room hotel nearby. While the American Center has actually begun construction, development likely will be more extensive at the old Town & Country Fairgrounds, now called Napa Valley Expo. The state Legislature last year authorized the fairgrounds to lease the 34-acre site to a nonprofit organization for private development. That organization, Friends of the Napa Valley Exposition, expects to hire a development partner this month, said expo consultant John Salmon. The eventual project, which must be self-supporting, will include a 350-room hotel and conference center, retail spaces and a demonstration farm. Development of a tourist reception center, performing arts spaces and an education center are also possible. Community events and the annual fair will continue on the site. Part of the impetus for the project is a desire to keep tourists from trampling the valley, where bumper-to-bumper traffic is the weekend norm. The expo could serve as a base for taking groups to into the valley. "It becomes the beginnings of managing visitation to the valley," Salmon said. The huge number of visitors, which grows almost every year, is attracting hotel developers. By one count, 15 projects containing approximately 2,500 rooms are in some phase of the planning process. Nearly all of those hotels are in or near the city of Napa, which has seen little hostelry development in recent years. Smaller merchants also are renewing interest in downtown Napa. For example, an upscale, 140-seat restaurant called Tuscany is scheduled to open this month at First and Main streets, within walking distance of the American Center and of the proposed factory-turned-spa. Not too many years ago, that restaurant would have located in Yountville or St. Helena. "The next 10 years in Napa are going to have the most extensive development the city has ever seen," said Nystrom, of the American Center. "I think it's going to be a city in California to watch." Contacts: Cassandra Walker, Napa Redevelopment/Economic Development Agency, (707) 257-9502. John Salmon, Napa Valley Expo consultant, (707) 333-6010. Kurt Nystrom, American Center for Wine, Food and the Arts, (707) 257-3606.

Members of a redevelopment agency's project area committee who own property within the project area do not have a conflict of interest that prevents their participation, according to an attorney general's opinion. The opinion, written at the request of Los Angeles City Attorney James Hahn, says that statutes and case law regarding project area committees makes clear that an exception is warranted to the normal conflict of interest rules. Government Code § 1090 says government representatives and employees "shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members." That law requires not only an abstention by the conflicted member, but precludes the governing body from entering into the contract, according to the opinion by Deputy Attorney General Clayton Roche. At issue in the Los Angeles case is whether a redevelopment agency may sign a development agreement after receiving advice from a project area committee (PAC) with members who own property within the project area. The redevelopment agency board appointed a 25-member project area committee, as allowed under the Community Redevelopment Law (Health and Safety Code §§ 33000-33855), to make recommendations on developing a 42-acre site within a project area. Some of these PAC members eventually could sell their real estate to a developer or to the redevelopment agency, or they could even enter into a development contract with the agency. "Undeniably, they have their own personal, financial interests to protect and enhance when the PAC advises the agency … ," the attorney general's opinion said. But the Community Redevelopment Law actually encourages the participation of people with a financial stake in the redevelopment project, the opinion notes. The law calls for representation on the PAC of homeowners, residential tenants, business owners and existing organizations. "To apply the general provisions of (Government Code) § 1090 in such circumstances or to require the financially interested PAC members to abstain would undermine the Legislature's express determination that property owners in the project area are to render advice as members of the PAC," Roche wrote. "The redevelopment agency and the legislative body will receive the PAC's advice, knowing that some PAC members will have personal, financial interests to protect and promote. That is the process envisioned and sanctioned by the Legislature." Roche continues, " he potential ‘conflict' is not only considered allowable by the Legislature, it is required by the Legislature to give the PAC's advice a broad perspective. … To conclude that a PAC could not give advice because some of its members must own property in the project area would render meaningless the statutory scheme under which PACs are formed." Attorney General's Opinion No. 99-304, 99 C.D.O.S. 5710, filed July 15, 1999.

Burbank city leaders and the Burbank-Glendale-Pasadena Airport Authority have announced a new agreement that would lead to expansion of the crowded Burbank Airport and end a four-year legal battle. The deal allows the airport to build a terminal nearly twice the size of the current terminal but retain the same number of gates — 14. The airport would close concessions and services from 11 p.m. to 6 a.m. daily and phase out noisier Stage 2 jets. If the airport convinces federal regulators to approve a 10 p.m. to 7 a.m. flight curfew, the airport could add two more gates. Should the airport and city agree on a passenger limit, the airport could grow to 19 gates. The Airport Authority in early August voted 5-2, with two members absent, to approve the plan. The Burbank City Council has scheduled a public hearing on the airport proposal for Oct. 19. Almost immediately, airport expansion foes spoke of a referendum or a Burbank City Council recall because the plan does not mandate a night-time flight curfew.

Ever since the Delhi Sands flower-loving fly was listed as an endangered species in 1993, it has been a poster child for opponents of the federal Endangered Species Act. Now, the fly is the latest endangered species to take center stage in the continually urbanizing Inland Empire. Other controversial endangered species, such as the Quino Checkerspot Butterfly and the gnatcatcher, can at least win support for aesthetic reasons. But a fly? Few people are easily convinced of the redeeming value or beauty of flies. Environmentalists and the U.S. Fish & Wildlife Service argue, however, that there is more than meets the eye in this argument. For one thing, it's an unusual insect, a 1.25-inch creature with green eyes that hovers like a hummingbird during its brief life span. Saving the fly also saves the Delhi Sands, a habitat with unique plant life. "It's not just the fly, it's the ecosystems on which it depends," said Fish & Wildlife Biologist Mary Beth Woulfe. Preserve land for the fly, and other animals of the ecosystem, such as the Jerusalem cricket, the meadowmark butterfly, and the legless lizard, are also preserved. In recent months, the fly has become an issue in development projects in the cities of Rialto, Colton, Ontario and Fontana, and in unincorporated San Bernardino County. In adjacent Riverside County, the Endangered Habitats League is litigating over development in possible fly habitat. Local government officials contend they do not clearly know what they are supposed to do and are upset the fly is stalling development projects. The flap over the Delhi Sands flower-loving fly might have been avoided if either Riverside or San Bernardino County had adopted a regional multi-species habitat conservation plan. These plans are designed to set aside land for endangered species while providing developers certainty as to where they can build. The Clinton administration has supported such planning as a way to avoid fights over a single species. Both counties have such plans underway but are years from completing the documents. Riverside County's plan could take two to five years to finish. San Bernardino County's multi-species plan received funding authorization in January, and is could be done in three years, according to Randy Scott, the county's planning manager for the species plan. In the interim, there have been court battles and heated rhetoric. Some cities in the San Bernardino area hired a lobbyist in Washington D.C. to exert influence on the matter there, Scott said. The planning official said the fly has a "chilling effect" on development in the county. "In a lot of instances, people are looking elsewhere," he said. But some government officials are saying, "Here it is, we've got to deal with it. So get on with it." That is happening in meetings between local governments and Fish & Wildlife Service officials, where an interim habitat conservation plan for the fly is being crafted. San Bernardino Congressman George Brown, who died recently, brought the parties together for a first meeting in April. Since then, the local governments in San Bernardino County have offered various sites totaling about 400 acres throughout the county for fly habitat. The Fish & Wildlife Service is expected to announce whether it will agree to the plan by the end of August. "We're not really optimistic that they'll agree," Scott said. But some kind of agreement is eventually expected. "I'm hopeful we can come to terms with the cities," said Woulfe, of the Fish & Wildlife Service. The fly's habitat once covered 40 square miles, but the fly is now located in only a few areas. Woulfe said there is not a good population estimate, although few scientists think there are more than a few hundred of the flies. The largest population is thought to be in the city of Colton. Listing the fly as an endangered species led to additional costs of building San Bernardino County's medical center, when fly habitat was discovered on the site. But in a suit brought by the county, Fontana, Colton and building groups, a federal court upheld the Fish & Wildlife Service restrictions on building the hospital in fly habitat, and the U.S. Supreme Court refused to consider the matter on appeal. The fly is now again affecting the hospital, Scott said, because projects for both traffic and flood control mitigation there could disturb fly habitat. In recent months, the city of Fontana has been a focal point of fly-related activity as it tries to expand its manufacturing base. (See CP&DR, July 1999.) Two property owners have stopped paying taxes on about 400 acres at the Empire Center while a study determines whether the land is home to the fly. Because of the delinquent tax payments, about $46 million in municipal bonds could go into default, affecting about 9,000 bondholders. Also in Fontana, the Fish & Wildlife Service sued Angeles Block Co. in May over construction on part of a 90-acre parcel. The lawsuit was settled with an agreement to set aside about 15 acres for fly habitat. A related lawsuit over the site by the Endangered Habitats League is also expected to be settled. "It certainly has caused delays," said Rialto City Attorney Robert A. Owens. "I'm hopeful the federal government can do something which will enable local jurisdictions to apply rational rules to provide for orderly development, while also protecting endangered species such as the fly. It's frustrating from a public agency perspective not having a clear set of rules." Dan Silver, EHL executive director, said the group has also sued Riverside County, which approved a negative declaration for a 50-acre warehouse project. Consultants hired by the developer determined the land was not occupied by the fly, he said. Silver said that while it could not be proven that the land is Delhi Sands habitat, the area is a recovery area for the fly. The fly is also an issue in ongoing EHL litigation against the city of Ontario over its plans to annex an agricultural preserve, he said. Noting that several thousand acres are slated for development in just one of the county's enterprise zones, Silver said saving the fly will not "make much of a dent in development. … It's a problem that's imminently solvable." Contacts: Robert A. Owens, city attorney for Rialto, (909) 874-2390. Andrew Hartzell, Hewitt & McGuire, attorney for Angeles Block Co. (949) 798-0500. Dan Silver, Endangered Habitats League, (323) 654-1456. Randy Scott, County of San Bernardino (909) 387-4147. Mary Beth Woulfe, U.S. Fish & Wildlife Service (760) 431-9440.

The Fourth District Court of Appeals has denied the City of Anaheim's petition for rehearing in a case in which the court ordered Anaheim to approve permits for an adult cabaret. The court did modify its opinion in Badi Abraham Gammoh v. City of Anaheim, 1999 Daily Journal D.A.R. 6685, (CP&DR Legal Digest August 1999), but the modifications did not alter the judgement against the city. The court had ruled that Anaheim's actions in denying permits for Gammoh's Funtease theater did not pass constitutional muster. Besides ordering Anaheim to grant the necessary permits, the court remanded for trial Gammoh's lawsuit seeking damages for a civil rights violation. In a new footnote, the court wrote, "We also express no opinion on any civil rights liability which might, or might not, pertain to a city's decision to grant a variance. Suffice to say that city councils grant variances to zoning ordinances on a relatively regular basis." The denial and modified opinion is at 1999 Daily Journal D.A.R. 7805.

Stimulated by the success of Ventura County's SOAR initiatives, citizens � and some City Councils � throughout the state are placing growth restrictions on the local ballot in increasing numbers. Four growth-control initiatives are scheduled for the November ballot, including three sponsored by the Citizens' Alliance for Public Planning, or CAPP, a Pleasanton-based citizen organization active in the Tri-Valley area of eastern Alameda and Contra Costa counties. Up to eight measures may appear next year, including at least two on the March ballot. Like the Ventura County initiatives sponsored by Save Open-space and Agricultural Resources (SOAR), the CAPP initiatives require voter approval to change local land-use policies. And like the SOAR organizers, CAPP proponents are attempting to influence land-use issues regionally by passing initiatives in adjacent jurisdictions. But unlike the SOAR initiatives, which establish urban growth boundaries and protect agricultural land, the CAPP initiatives would require voter approval for plan amendments required to construct as few as 10 or 20 houses. The CAPP initiatives were placed on the ballot by a new citizen planning group that has entered the roiling Tri-Valley growth wars, which have raged along the I-580 and I-680 corridors in the East Bay during recent years. The increase in initiative activity appears to be partly the result of publicity about SOAR's success, and networking among SOAR's proponents and citizen activists elsewhere. SOAR leader Steve Bennett of Ventura, whose photograph recently appeared in Time magazine, said he fields several phone calls a week from around the state and has advised activists in San Luis Obispo and elsewhere. The increased ballot activity also appears related to the biggest real estate boom since the late 1980s. Past research has shown that land-use ballot measures increase in response to increased development activity. CAPP measures will appear on ballots this fall in Pleasanton, Livermore, and San Ramon. A council-sponsored measure will appear as an alternative on San Ramon's ballot. In addition, the CAPP organization is working to place measures before Danville and Alameda County voters next year. The only non-CAPP measure on the fall ballot is a SOAR-style measure in Agoura Hills, a small city in Los Angeles County adjacent to Ventura County. CAPP chairman Stan Erickson of Pleasanton did not return telephone calls from CP&DR, but the organization's web site claims that CAPP is a coalition of citizens "brought together by a common vision -- a vision of residential and commercial development done in a manner so as to inspire praise instead of derision. Our vision is to encourage development which is harmonious with the surroundings and with nature. We are against what has become widely known as �sprawl' development." Somewhat surprisingly, the Greenbelt Alliance has decided to remain neutral on the CAPP initiatives. "Local land-use initiatives need to not only limit irresponsible development, they must also encourage smart growth: attractive, affordable, transit-accessible, infill opportunities," the Alliance said in a written statement. "Unfortunately, the proposed CAPP initiatives do not strike this critical balance." Greenbelt Alliance has been a backer of urban growth boundaries, including the 1996 growth boundary implemented in Pleasanton. The CAPP measures have generated controversy in each of the three jurisdictions where they are scheduled to appear this fall. The biggest brawl is in Livermore, which has the most land available for growth. In particular, the CAPP measure would stymie the city's current plans to work jointly with Alameda County to allow a 12,500-unit development � and development of open space � in North Livermore. "The issue is whether there's going to be 30,000 people in North Livermore," says Eric Parfrey, an environmental consultant in the East Bay. Parfrey has been assisting citizen activists in Tracy � just over the Altamont Pass from Livermore � who are seeking to restrict growth there. The North Livermore area has been a major source of contention between Livermore and Alameda County for many years. However, the two jurisdictions recently agreed on the 12,500-unit plan, which dedicates 80% of the property for open-space uses. The CAPP measure would create an urban growth boundary � changeable only by a vote � that would exclude most of the North Livermore property. The initiative would also require a vote for residential projects of 20 units or more and cut the city's population growth rate to a little more than 1% per year. Part of the reason CAPP proponents are trying to place a measure on the Alameda County ballot is to prevent landowners from moving forward with a large project in North Livermore through the county government, rather than the city government. The CAPP measure was placed on the November ballot by the Livermore City Council after a Superior Court judge ruled initiative petitions invalid because of two minor technical problems. However, the council also appointed a citizen committee to examine alternatives to the 30,000-resident North Livermore plan. In early August, the citizen committee presented a positive evaluation of a proposal to accommodate only 10,000 new residents. The City of Livermore currently has about 75,000 residents. In Pleasanton, CAPP supporters were buoyed by voters' rejection in June of a proposed 89-unit subdivision. The Pleasanton initiative is similar to the Livermore initiative, requiring a public vote on residential projects of 10 or more units, as well as rezoning of some agricultural properties and approval of commercial and industrial projects more than 55 feet tall. Meanwhile, the landowners and developers who lost the June election have gone to court, claiming that June's referendum results were inconsistent with the city's general plan. In San Ramon, a battle is shaping up between the CAPP initiative and an alternative City Council proposal. The CAPP initiative would require a public vote on projects of 10 units or more and on increased densities in commercial and residential areas. The San Ramon measure also contains General Plan language that encourages infill development. In response, the City Council placed on the ballot an alternative measure that would impose a two-year growth moratorium, initiate a general plan update that the voters would approve, and require voter approval to change the general plan in the future. Meanwhile, in Agoura Hills, voters will decide the SOAR-style initiative on the November ballot. The measure, which was placed on the ballot by the City Council, would require two-thirds voter approval to change the general plan land-use designation of any property from open space to urban development. Sitting adjacent to the Santa Monica Mountains National Recreational Area, Agoura Hills has approximately one-third of its city designated in open space, most of it mountainous. The Agoura Hills measure resulted from the passage of the 1998 SOAR initiatives in Ventura County. Many slow-growth political alliances straddle the Ventura-Los Angeles county line in the area around Agoura Hills. In addition to the CAPP initiatives planned for Danville and Alameda County, the following ballot measures are also in the works for next year: o The Dublin City Council has placed an urban growth boundary measure on the November 2000 ballot. The proposal would remove thousands of acres between Dublin and Castro Valley from the city's planning area. Although Dublin is located between San Ramon and Pleasanton on the I-680 corridor, CAPP chose not to pursue an initiative there. o The City of Davis is aiming to place a SOAR-style initiative on the March 2000 ballot. The measure would require a vote on any project involving a rezoning of land designated for open space or agriculture. "If any project came forward, it would get referended anyway," said Mayor Julie Partansky. Unlike Ventura County SOAR, however, the Davis measure would place projects before the voters only after city council approval. o Citizens in Tracy � a commuter town in San Joaquin County heavily affected by growth patterns in the Tri-Valley area � are preparing a measure for the March ballot that would halve the number of houses permitted each year from 1,500 to 750. According to Parfrey, a consultant to the Tracy Area Residents for Quality Growth, the city has never hit the cap of 1,500 previously but appears likely to do so this year. o Environmental and citizen groups in San Luis Obispo are aiming for a SOAR-style set of initiatives on city and county ballots in November of 2000. "What a SOAR initiative would do is lock in current land-use designations," said Pat Veesart of Go SLO, an environmental group. "The political will on the part of elected officials is not there." o Citizen activists have discussed possible SOAR initiatives in Santa Barbara County and in the L.A. County community of Westlake Village � both adjacent to Ventura County � but no firm ballot plans have emerged yet. Contacts: Stan Erickson, CAPP, (925) 462-4995. Barry Hand, Community Development Director, City of Livermore, (925) 373-5200. Eric Parfrey, Baseline Consulting, (510) 420-8686. Julie Partansky, mayor of Davis, (530) 753-3936. Pat Veesart, Go SLO, (805) 544-1777. CAPP web site: home.att.net/~alliance

An elementary school proposed for agricultural land is not subject to a Ventura County initiative intended to preserve farmland and open space, according to an attorney general's opinion. A school district board of trustees, by a two-thirds vote, may exempt itself from local land use regulations, according to the opinion prepared by Deputy Attorney General Gregory Gonot. He quoted extensively from City of Santa Clara v. Santa Clara Unified School District (1971) 22 CalApp.3d 152, in which the court interpreted Government Code §§ 53091 and 53094. "The only reasonable interpretation of these sections is that a school district must abide by local zoning ordinances unless it chooses to exercise its right of exemption," the court said in Santa Clara. The school district may declare the exemption at any time, provided the decision is not arbitrary and capricious, the court ruled. The Santa Clara court said state law sets school districts apart from other local agencies. "The Legislature accordingly provided in § 53094 that school districts, as opposed to other local agencies, should retain the right to exempt themselves from local zoning ordinances," the court ruled. In the case at hand, the Ventura Unified School District proposed building an elementary school on a 15-acre orchard in unincorporated Ventura County, just outside the City of Ventura boundary. The district picked the site one year ago, before voters approved Save Open-space and Agricultural Resources (SOAR) initiatives in the county and several cities. The SOAR initiatives prevent urban development of agriculturally zoned land, such as the 15-acre orchard, unless voters approve a rezoning. State Sen. Jack O'Connell (D-Santa Barbara), who represents the region, requested the attorney general's opinion. Richard Francis, the Ventura attorney who authored the SOAR initiatives, said the opinion was unsurprising and called it "a whole lot of nothing. The law is real clear on this." Gonot opined that the initiative is no different than any other zoning regulation and cannot be extended to schools. "The fact that this particular general plan ordinance was adopted as an initiative measure by the electorate does not change our analysis," Gonot wrote. "Adoption of a general plan, like adoption of a zoning ordinance, is a legislative act. (66 Ops. Cal.Atty.Gen. 258, 260 (1983); see § 65301.5) While county voters may amend the county's general plan to the same extent as the board of supervisors, they cannot adopt an amendment that makes it conflict with state law." "Accordingly," Gonot continued, "the ordinance in question must yield to the authorization contained in § 53094, permitting a school district under specified conditions to construct a school on property even though such use would not be in conformity with the general plan." Francis said that while local agencies cannot keep schools out of greenbelts and agricultural districts, practical constraints may discourage school construction in these areas. Developers cannot use schools to break apart greenbelts easily because, under SOAR, the accompanying urban development must go before voters, he said. Also, some school officials shy away from building on farmland because of past pesticide use. Minimum lot sizes, from which schools are not exempt, also complicate school siting decisions, Francis added. For example, Oxnard High School, just south of Ventura, is located on an excessively large parcel because the county refused to grant a minimal parcel size variance. The school must farm part of its property. Francis suggested he could live with the statutes. "I'm not running any statewide initiative to change the law," he said. Attorney General's opinion No. 99-401, filed July 26, 1999.