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The state Supreme Court has sided with a landowner in a dispute over Santa Cruz County’s regulation of second dwelling units. But the state high court only cleared the way for the landowner to pursue his claims in court and did not rule on the merits of those claims. The court ruled that a landowner has 90 days to challenge permit conditions, even if the challenge calls into the question the ordinance underlying the conditions. The Sixth District Court of Appeal had ruled that this amounted to a “facial” challenge of the ordinance, and that the landowner should have sued at the time the county adopted the ordinance (see , September 2002). But the state Supreme Court ruled unanimously that a landowner has 90 days to sue over permit conditions, and such a suit is not “untimely merely because the theory of challenge is the facial invalidity of the ordinance upon which the permit or condition is based.” Property rights advocates said the state Supreme Court decision returned the ability of landowners to bring “as applied” challenges of regulations. This principle was not in question until the Sixth District’s ruling, said Pacific Legal Foundation attorney Harold Johnson, who represented Santa Cruz County property owners at the state high court. The Sixth District said that, because the statute of limitations for contesting the county’s adoption of the ordinance had expired, a landowner had to show that the county was treating his property differently than others that are regulated by the same ordinance. The state Supreme Court’s ruling, said Johnson, “rescued us from an appellate decision that would have been disastrous.” California Building Industry Association attorney Paul Campos, who filed an amicus brief in the case, agreed. The state Supreme Court decision “prevents a really radical change in the balance between finality for local governments and the ability of landowners to bring an as-applied challenge,” Campos said. If the Sixth District’s ruling had been allowed to stand, “it would have immunized a whole universe of land use regulation from judicial review after 90 days.” Attorneys on the other side said the state Supreme Court ruling creates new opportunities for landowners to contest regulations. But Santa Cruz Assistant County Counsel Dwight Herr said the court took a middle position that gave landowners less than they requested. The court even knocked one landowner out of the case. Plus, Herr noted, the only ruling that has ever been made on the merits of the litigation was at the trial court, which sided with the county. Land use law expert Daniel Curtin, of Bingham McCutchen, called the state Supreme Court’s ruling a “reasonable” one that cities and counties can live with — even if they would rather not. The League of California Cities and the state attorney general’s office had asked the state Supreme Court to uphold the lower court’s decision. At issue is a Santa Cruz County ordinance regulating second units, or “granny units.” The county first adopted an ordinance in 1981 and has amended the law several times since then, most recently in November 1997. The law restricts occupancy to low-income households, seniors or family members, and controls rent based on a sliding scale. In 1999, Steven Travis received a permit for a second unit on his property in the unincorporated community of Boulder Creek. He appealed the occupancy and rent conditions, but his appeal was denied on June 21, 1999. He and Stanley and Sonya Sokolow (who had received a second unit permit in 1998) then sued the county on September 7, 1999. Travis and the Sokolows argued that the second-unit ordinance was preempted by the Costa-Hawkins Rental Housing Act, was discriminatory, violated state planning and zoning law, was an unconstitutional taking and was invalid because the county lacked a certified housing element. Santa Cruz County Superior Court Judge Robert Yonts ruled that the landowners’ challenge of the ordinance itself was too late, as was the Sokolows’ challenge to their permit conditions. The judge determined that Travis’s constitutional challenge was timely, but that there had been no taking. After the landowners appealed, the Sixth District Court of Appeal in a 2-1 decision upheld the lower court on slightly different grounds. The Sixth District ruled that the statute of limitations in Government Code § 65009, subdivision (c), barred all of the challenges. That statute gives people 90 days to commence legal action over the adoption or amendment of zoning ordinances. The landowners had 90 days to file suit from the time the county last amended the second-unit law in 1997, the court held. The state Supreme Court saw things somewhat differently. The challenges to the individual permit conditions are governed by Government Code § 65009, subdivision (c)(1)(E), the court held. Paragraph (E) gives the landowner 90 days from the final administrative action to commence litigation. Travis met the 90-day statute, but the Sokolows did not, the court held. The court rejected the county’s contention — and the appellate court’s conclusion — that Travis was challenging permit conditions generally and that he should have sued within 90 days of the ordinance’s adoption. The county and the Sixth District relied heavily on , 8 Cal.4th 1 (see , September 1994), which holds landowners to strict statutes of limitations for challenging land use regulations. “But in ,” Justice Kathryn Werdergar wrote for the court, “we were not concerned with delineating the issues that could be raised in a challenge to a permit condition. … Indeed, elsewhere in the decision we explained that a claim of regulatory taking, arising from imposition of a ‘development restriction’ requires a showing that ‘the ordinance, regulation or administrative action is not lawful or constitutionally valid if no compensation is paid.’” “Having brought his action in a timely way after application of the ordinance to him, Travis may raise in that action a facial attack on the ordinance’s validity,” Werdegar wrote. “The Legislature intended § 65009 to provide certainty to local governments, but not, we think, at the expense of a fair and reasonable opportunity to challenge an invalid ordinance when it is enforced against one’s property,” Werdegar continued. The court then considered the landowners’ contention that the Costa-Hawkins Act preempts the county’s ordinance. In general, Costa-Hawkins prohibits rent control on housing units built since 1995. The court ruled that Code of Civil Procedure § 338 gave the landowners three years to challenge the county ordinance for being in violation of Costa-Hawkins. But that three-year period began with the effective date of Costa-Hawkins (January 1, 1996) and not the date of the county’s last ordinance amendment (November 1997). Thus, the landowners were too late here, the court ruled. The court also rejected the theory of “continuous accrual,” in which a new statute of limitations begins every time the county applies the ordinance. In a concurring and dissenting opinion, Justice Janice Rogers Brown said that there should be no statute of limitations for the type of challenges brought by Travis and the Sokolows, who have not sought monetary damages. The state Supreme Court returned the case to the Sixth District for further proceedings on the merits of Travis’s constitutional claims. The Case: , No. S109597, 04 C.D.O.S. 6822, 2004 DJDAR 9280. Filed July 29, 2004. The Lawyers: For Travis: Harold Johnson, Pacific Legal Foundation, (916) 419-7111. For the county: Dwight Herr, county counsel’s office, (831) 454-2040.

A ballot initiative that was adopted by a city council was not subject to review under the California Environmental Quality Act, even though the city deviated from state election law regarding ballot measures, the Fourth District Court of Appeal has ruled. The court held that the city’s process did not deviate from the Elections Code requirements enough to make the city’s action more than ministerial. Ministerial projects are exempt from CEQA. The ballot initiative in question was drafted in 2002 by Pueblo Serra LLC, which sought to develop a private, Catholic high school at Junipero Serra Road and Camino Capistrano in the City of San Juan Capistrano. Pueblo Serra has a high school in a converted office complex on one 9-acre parcel at the site. Operators of the for-profit school wanted to expand onto an adjacent 29-acre parcel, so they prepared a ballot initiative to change the general plan designation and zoning of the two parcels. The general plan designated the parcels for office research and planned community, respectively. The Pueblo Serra initiative proposed a public and institutional general plan designation, and correlated zoning. In September 2002, the Orange County Registrar of Voters certified that the initiative petition had enough signatures to qualify for the ballot. The initiative was then presented to the City Council, which negotiated an implementation agreement to mitigate certain impacts. The council adopted the initiative and implementation agreement on October 15, 2002. Members of the Juaneño Band of Mission Indians formed the Native American Sacred Site and Environmental Protection Association (NASSEPA) and sued the city, arguing that the City Council could not adopt the initiative without CEQA review. The tribe said that the 29-acre parcel was the site of the tribe’s ancient mother village and a burial ground. The tribe had sought to regain control of the land. Superior Court Judge Ronald Bauer ruled that the city did not have authority to adopt the initiative in conjunction with the implementation agreement because Elections Code § 9214 gives a city only two options: Adopt an initiative “without alteration” or schedule the measure for an election. In May 2003, the City Council rescinded its earlier action and adopted the initiative exactly as presented. NASSEPA returned to court, but this time Judge Bauer ruled for the city. The Indians appealed, and a unanimous three-judge panel of the Fourth District upheld the lower court. The Indians argued that the only way the city could adopt the initiative as a ministerial act — and, therefore, exempt from CEQA — was if the city did so within the 10-day period set out in the Election Code. Because the city acted months after being presented with the initiative, the City Council’s action was no longer ministerial, NASSEPA contended. But the appellate court rejected the argument. “A city’s duty to adopt a qualified voter-sponsored initiative, or place it on the ballot, is ministerial and mandatory,” Justice William Rylaarsdam wrote for the court. “This duty remains even when performance is beyond the statutory time frame.” “Other than passage of more than 10 days, nothing had changed since the time the initiative petition was first certified and presented to defendants,” Rylaarsdam continued. “Under plaintiff’s analysis, however, this lapse of time acted to invalidate defendants’ power to adopt the voter-sponsored initiative. Considering the intent of the section and the broader statutory and constitutional scheme of which it is a part, that is an absurd result we cannot countenance.” The Indians argued that the city could conduct a CEQA review of the project or Pueblo Serra could gather signatures on a new initiative. But the court ruled that neither of those alternatives was necessary. The city materially followed the procedures of the Election Code, “ nd it is plain that voter-sponsored initiatives are not subject to the procedural requirements that might be imposed on statutes or ordinances proposed and adopted by a legislative body, regardless of the substantive law that might be involved,” the court ruled. The Case: , No. G033198, 04 C.D.O.S. 6642, 2004 DJDAR 8947. Filed June 30, 2004. Ordered published July 22, 2004. The Lawyers: For NASSEPA: Susan Brandt-Hawley, Brandt-Hawley Law Group, (707) 938-3908. For the city: John R. Shaw, Woodruff, Spradlin & Smart, (714) 564-2603. For Pueblo Serra: Robert Bower, Rutan & Tucker, (714) 641-5100.

Every month when the news media reports the latest “record trade deficit,” what often goes unsaid is that this deficit means cargo handlers in Southern California are busier than ever. With the country’s ever-increasing reliance on imported materials and goods, the logistics industry appears to be thriving. But developing the warehouses and distribution centers has become an issue in many Southern California communities. Several factors are affecting Southern California’s warehouse development scene: An almost complete absence of vacant land near the largest ports, some local governments’ unease with the low jobs-per-square-foot ratio inherent in warehousing, and rising questions about air pollution from trucks that come and go from warehouses. Thus warehouse and distribution center development continues to move farther inland, where land is available and inexpensive, and where local governments are happy to approve almost any project that brings jobs. This move inland comes despite the total dominance of the coastal ports of entry. The Los Angeles-Long Beach port complex is the largest in the country and third largest in the world, and experts say the amount of cargo headed through the port complex will quadruple over a 25-year period. Los Angeles International Airport (LAX) handles more cargo than any other West Coast airport and, despite attempts by transportation planners to spread the wealth among other airports in the region, LAX continues to get most of the growth. By way of comparison, LAX handles about as much cargo in one week as the region’s second-busiest cargo airport, Ontario International, handles all year. But most warehouse and distribution center development is occurring 50 or more very congested miles from the seaport and LAX. Grubb & Ellis recently reported that about 10 million square feet of industrial space was under construction in Riverside and San Bernardino counties during the second quarter of 2004. Nearly all of this space was in the form of 500,000-square-foot or larger warehouses and distribution centers. “The place where the warehouse growth has been is the Inland Empire,” said Gary Painter, director of research at the University of Southern California’s Lusk Center for Real Estate. “It all has to do with the cost for the land.” Currently, the cheaper land offsets the cost of transporting things — usually by truck — to the outlying warehouses, Painter said. At some point, the balance will change, he said. But determining where that balance point lies is difficult. Unless there are some “radically different trends” in ground transportation costs, the inland movement of warehouses and distribution centers will continue, he said. However, officials in cities that have already become shipping hubs are ambivalent about further growth. “Warehouse and distribution centers just sort of happen by themselves,” said Ray Bragg, the City of Fontana’s redevelopment and special projects director. “We’ve got three interstate freeways traversing through the city, and we’ve got Union Pacific railroad going through the south end of the city.” Fontana provides incentives for distribution centers only if there is an additional component, such as sales or marketing. For example, an American Hotel Supply facility in Fontana serves as both a warehouse and as a sales outlet, providing the city with sales tax revenue. “Warehouses and distribution centers, unfortunately, are not high jobs producers, and they are not what you might call ‘living-wage’ jobs producers that allow people to live in the community,” Bragg said. Furthermore, truck-dependent warehouses generate enormous road maintenance costs for local government, he said. Neighboring Ontario has 84 million square feet of industrial space, about half of which is devoted to the logistics industry, said Mary Jane Olhasso, the city’s economic development director. The city encouraged this development by zoning large tracks of freeway-accessible farmland near the airport for industrial uses. The city also worked hard to process applications quickly. But, even with its airport, freeways and the UP rail line, Ontario’s days of warehouse growth are about over because, Olhasso said, the city is “virtually out of space for a big box. … If I’m a real estate developer, I’m not going to look at Ontario.” A 2002 study by airport consultants Leigh Fisher Associates found plenty of room for air cargo growth at Ontario airport. That is fine with the city, but Olhasso pointed to the fact that the number of passengers using Ontario is expected to quadruple by 2020. That passenger growth is going to boost the demand for office space, so Olhasso expects some existing distribution centers along Interstate 10 to become office buildings. “Over the next 10 years, you’re going to see a major change in Ontario jobs and in the skyline,” Olhasso predicted. Still, some inland localities remain enthusiastic about warehouse development, including cities along I-215 in western Riverside County and in San Bernardino County’s Victor Valley. Former military bases are also starting to get some significant projects. Community resistance, however, is rising in places. In Moreno Valley, for example, hundreds of people have protested the Planning Commission’s approval of a three-building, 1.5-million-square-foot warehouse center next to March Air Reserve Base — even though the site has been zoned for industrial development since 1989. The City Council is tentatively scheduled to decide the controversy this month, said Moreno Valley planner Edward Robertson. Residents’ concerns usually are focused on the noise, congestion and air pollution that comes with truck traffic. During the last two years, the Center for Community Action and Environmental Justice (CCAEJ) has successfully fought warehouses proposed for the unincorporated Riverside County town of Mira Loma, which has become a distribution center hub. Air pollution is the biggest concern. The South Coast Air Quality Management District has reported that diesel pollution — which causes cancer — is more intense in Mira Loma than anywhere else in Southern California. And researchers at USC found that children in Mira Loma have unusually low lung capacities. “Here we had local officials developing their economic strategies around this hugely polluting industry,” said CCAEJ Executive Director Penny Newman. “It makes absolutely no sense to bring in industry that is not labor-intensive, that is more automated all the time.” Meanwhile, the air district has begun circulating a draft of a recommended air quality element that cities and counties could incorporate into their general plans. The district suggests that cities and counties keep air polluting industries away from children, and elderly and sick people, and more seriously consider cumulative impacts. Contacts: Mary Jane Olhasso, City of Ontario, (909) 395-2010. Ray Bragg, City of Fontana, (909) 350-7697. Gary Painter, USC Lusk Center forReal Estate, (213) 740-8754. Penny Newman, Center for Community Action and Environmental Justice, (909) 360-8451.

A county airport land use commission may not exempt a specific plan adopted by a city or county from compatibility standards for development in the vicinity of an airport, according to a state attorney general’s opinion. The opinion written by Deputy Attorney General Daniel Stone was prepared at the request of Riverside County Counsel William Katzenstein. During the 1980s and early 1990s, Riverside County and some cities adopted a host of specific plans for territory around airports in French Valley, Hemet and Corona, explained Deputy County Counsel B.T. Miller, who advises the airport commission. When state legislation required county commissions to adopt compatibility standards for land use and development intensity in the vicinity of airports, the Riverside County commission approved compatibility plans that exempted the existing specific plans. As development proposals were submitted in compliance with those specific plans, the proposals were not held to the compatibility standards, Miller said. In time, conflicts began to arise, especially around the airport in French Valley, an unincorporated community east of Murrieta that is the location of large-scale residential development plans. Also, membership of the commission turned over, and the county began providing more professional staff assistance. The new people did not want to continue the practice of exempting development from the compatibility standards, and the new folks wanted to prepare new standards that eliminated the exemptions. Miller said that the county counsel’s office had begun advising the commission that the exemptions were not legal. To firm up its position, the county sought the attorney general’s advice. “In some ways, it’s an obvious opinion,” Miller said of the attorney general’s opinion. “But sometimes it’s important to state the obvious.” The state law at issue is the State Aeronautics Act (Public Utilities Code §§ 21001-21707). The act requires a county airport commission to formulate an airport land use compatibility plan that addresses land use issues and minimizes the public’s exposure to noise and safety hazards. According to the attorney general’s opinion, § 21676 “provides a detailed procedure for resolving conflicts between a specific plan … and an airport land use compatibility plan.” If the commission finds an inconsistency, it must notify the city or county that adopted the specific plan. The city or county may then overrule the airport commission, but only with a two-thirds vote and only if the city or county can make findings that the specific plan is consistent with the state law’s goal of minimizing the public’s exposure to noise and safety hazards. If the city or county does not either follow this procedure or amend its land use policies in question, an airport commission may require the city or county to submit “all subsequent actions, regulations, and permits to the commission for review,” according to the attorney general’s opinion, which cites § 21676.5, subdivision (a). “In light of the elaborate procedures set forth in § 21676 and § 21676.5 for identifying and resolving inconsistencies between a specific plan and an airport land use compatibility plan, it is apparent that the Legislature did not intend or authorize a commission to grant ‘exemptions’ for a specific plan with less stringent standards than a compatibility plan,” Deputy Attorney General Stone wrote. “Instead, the act contemplates that, in the event of such a conflict, certain steps will be taken to achieve the act’s overall objectives, including possible review by the commission of ‘all subsequent actions’ taken by the city or county.” As for Riverside County specifically, Stone wrote, “Not only would the exemption in question be inconsistent with the act’s provisions and without authorization, it would be in conflict with the act’s purposes.” Since the attorney general issued the opinion, the Los Angeles County Airport Land Use Commission has risen from obscurity to question Mayor James Hahn’s plan for Los Angeles International Airport, suggesting that Hahn’s plan would expose the public to excessive noise and safety risks. The attorney general’s opinion is No. 03-805 and was filed July 22, 2004. It may be found at 04 C.D.O.S. 6645 or 2004 DJDAR 9081.

The 2003-04 legislative session has closed with the passage of dozens of mostly minor land use bills, and the failure of dozens of others. Still, lawmakers did pass a bipartisan measure creating a new Sierra Nevada Conservancy, and they continued to hammer on local governments about affordable housing development. The Legislature approved a number of brownfields, infill and housing bills that could fall under the definition of “smart growth.” Lawmakers also moved to protect natural resources, ranging from oak woodlands to Sacramento-San Joaquin Delta farmland to the ocean. Money measures went nowhere during the two-year session. Proposed state bonds for items such as transportation and other infrastructure barely received a hearing. Bills that sought to lower the voter threshold for approval of local tax increases found no favor. And, with a few exceptions, bills and constitutional amendments that sought to reform the state-local fiscal relationship also died with no fanfare during a legislative session marked by huge state budget deficits. Broad policy initiatives in any area of land use were absent again during this two-year session, in part because the Schwarzenegger administration never asserted itself on the subject. Many people expect that to change next year. Creation of the Sierra Nevada Conservancy might be — literally — the most far-reaching bill passed this year, as the jurisdiction of the proposed Conservancy would stretch from the foothills outside Bakersfield to the Oregon border. Under AB 2600, the Conservancy would be something of a conduit for state and federal funding to the region. In fact, the state budget for 2004-05 already contains $4 million for the Conservancy. The bill was the culmination of at least five years of background work by the Sierra Business Council and other advocates (see , May 2004). The bill is remarkable in part because it was co-authored by Democratic Assembly John Laird of Santa Cruz and Republican Assemblyman Tim Leslie, who represents a largely rural and conservative district in the mountains. Resources Agency Secretary Mike Chrisman has endorsed AB 2600, and the governor’s signature is expected. The Conservancy itself will not be able to acquire land, but it may acquire easements and it may provide money to nonprofit entities or local governments for the purpose of buying land. Republican Leslie demanded the provision prohibiting land acquisition, which would make this Conservancy different from its eight counterparts statewide. Environmentalists were willing to concede that in exchange for including more territory in the Conservancy’s jurisdiction. The agency’s territory would encompass everything related to the Sierra, from blue oak woodlands on the edge of the Central Valley to the dusty valleys on the east side of the mountain range, as well as all of the major watersheds. “Watersheds are the most basic ecological unit around which to organize services,” said Elizabeth Martin, a lobbyist for a foundation called the Sierra Fund, who noted that county lines often run down the middle of rivers. “The larger unit of management reflects how the Sierra is plumbed and how wildlife moves around.” Property rights advocates and counties themselves are mixed on the idea. They complain that a Conservancy would be another layer of government and would tie up more land in a region that is already mostly in the hands of the government. But Martin and other backers contend that design of the proposed Conservancy places great emphasis on local needs and desires. Six county supervisors will sit on the conservancy’s 13-member board, and the fact that the agency will not be able to buy land means that it must work with local governments and local land trusts, Martin said. There is no regulatory scheme, she pointed out. A different proposal to encourage natural resources conservation — this one for the Sacramento-San Joaquin Delta — was not approved this year, partly because of its proposed regulatory scheme. Instead, lawmakers approved a bill to modestly beef up the role of the existing Delta Protection Commission (AB 2476-Wolk). They also approved a new program (SB 86-Machado) that provides financial incentives to Delta landowners who manage their land to protect natural and agricultural resources. Senate Bill 86 was a reaction to an earlier version of AB 2476, which could have given the Delta Protection Commission a much greater role in fringe urbanization issues and farmland conversion (see , June 2004). If Schwarzenegger signs SB 86, the Coastal Conservancy would run the new program. “It allows the Delta to access the Conservancy’s expertise without having to invent a new agency,” said William Geyer, a lobbyist for Delta landowners. They backed the concept because it could provide annual payments to them based on their management practices, rather than a one-time payment for an agricultural or open space easement. In the area of housing, the two highest-profile bills were SB 1818 (Hollingsworth) and AB 2702 (Steinberg). Affordable housing advocates, the California Association of Realtors and some development interests backed both bills, while the League of California Cities, the California State Association of Counties (CSAC) and the California Chapter of the American Planning Association opposed both measures. Under the existing law, a city or county must provide a 25% density bonus to a developer who provides a certain percentage of units for low- or moderate-income residents or seniors. Senate Bill 1818 has three major provisions: It gives builders a greater density bonus for donating land to a nonprofit entity or local government for the construction of affordable housing; it sets a range of bonuses from 20% to 35% depending on the amount and type of affordable or senior units provided; and it lets a developer select three incentives, such as relaxed parking standards or smaller setbacks. Assembly Bill 2702 builds on a law approved two years ago that requires local governments to handle applications for second dwelling units ministerially. The new bill would prohibit cities and counties from establishing perpetual occupancy rules, mandating units smaller than 550 square feet, requiring covered parking or establishing minimum lot sizes greater than double the size of the primary residence. Affordable housing lobbyist Marc Brown said the negative reaction of some cities to the 2002 legislation was behind the latest bill. “If these cities had not gone off the deep end and tried to undercut all of this stuff, we would not have been back with new legislation this year,” Brown said. He said that, under AB 2702, cities and counties still have the authority ban second units outright, limit them to certain areas and restrict their numbers geographically. But local government representatives fought both bills as intrusions into local rule. “They weren’t able to substantiate the problems that they were using as a basis for AB 2702,” said CSAC Lobbyist DeAnn Baker, who complained that the bill invites rental duplexes into single-family neighborhoods. “There are unintended consequences when you get that prescriptive in state law. There could be a lot of backlash to second units.” In a letter to the Sacramento Bee, California Association of Realtors President Ann Pettijohn charged local governments with “engaging in scare tactics.” That prompted League of California Cities Lobbyist Daniel Carrigg to respond: “Rather than seeking changes to local ordinances in city halls and chambers of county supervisors — where the affected residents can engage in the debate — the Realtors are attempting to use the Legislature to mandate their views statewide.” Interestingly, Republicans played a major role in both affordable housing bills. Senate Bill 1818 was carried by Republican Sen. Dennis Hollingsworth of Murrieta, and Republicans provided the necessary votes for approval of AB 2702. The interest among legislative Republicans in housing, combined with the Republican Schwarzenegger administration’s known support for housing development, could provide affordable housing advocates with some important allies during the next legislative session, which begins in December.

Is a proposed high-density project in Redwood City an example of smart growth, or a gridlock-inducing suburban nightmare? That is the question voters will answer in November, when they vote on whether to allow 17 high-rise towers to be built along the city’s San Francisco Bay waterfront. The upward thrust of the Marina Shores Village — the towers would range between 15 and 21 stories high, with 2.8 million square feet of residential space, along with offices and retail — is unprecedented in the suburban Bay Area. In the region, only San Francisco has more high-rise buildings. But without San Francisco’s transit infrastructure, the $1 billion project has opponents who predict it will lead to traffic gridlock on Highway 101, which is already jammed with commute traffic. “Smart growth” often means high density development built around mass transit, but in this case the mass transit — in the form of the Caltrain commuter train — is across the freeway and its crowded intersections from the development site. Marina Shores Village sits next to the Bayshore Freeway and along Redwood Creek, which turns into San Francisco Bay. The project would be carved out of two boat marinas.. Developer Glenborough-Pauls LLC plans to run six daily shuttle buses from the village to the Redwood City Caltrain station. But Redwood City environmentalist Ralph Nobles thinks the shuttles are not enough to reduce the congestion. “What this means is you’ll have someone to talk to while you’re stuck in traffic,” Nobles said. Paul Powers, president of Pauls Corporation, which is a partner with the Denver-based Glenborough REIT in building Marina Shores Village, said the project will provide housing to local workers who want to live close to their jobs. He estimated the approximately 3,900 residents of Marina Shores will live within three miles of 30,000 to 50,000 jobs. The largest employer in the city is Oracle, which has between 6,000 and 7,000 workers at its headquarters near the Marina Shores Village project site. Powers also expects local residents to move to the new development as they downsize from houses. “We will take cars off of 101,” Powers said. A group called People for Housing Not High-Rises was able to gather more than 3,600 signatures to force a referendum on the project one month after the Redwood City council approved the project and raised the allowable height limits from 75 feet to 240 feet. The project is unusually large for suburban San Mateo County, which has little easily developable land remaining. A total of 1,930 condominiums and townhomes are proposed to be built in phases over a 20-year period at Marina Shores Village. Powers said the project has “tremendous support from people who want to do away with urban sprawl.” Among those endorsing the project is the Silicon Valley Manufacturing Group (SVMG), an influential business group that, among other things, lobbies for housing development in the area. “Traffic is always an issue in any kind of infill proposal,” said Shiloh Ballard, SVMG’s director of housing and community development. “If you don’t put the homes here, folks are going to commute from somewhere else.” Water, however, could be a problem. Currently, Redwood City uses more water than it is allocated by the Hetch Hetchy project, and there is no guarantee of water for Marina Shores Village. With each phase of the project, a consultant funded by the developer but working for the city would study the water situation and determine if supplies are adequate for construction to go forward, according to Tom Passinisi, the city’s acting planning director. The city has no new water sources, although the developer could purchase someone else’s water supply, Passinisi said. Developer Powers noted that the city plans to begin recycling wastewater to make up for the shortfall. City planner Mike Church said earlier plans for the project called for more towers at a lower height. But Powers said lowering the towers further would not leave enough land for all the improvements planned for the area. The development is expected to receive approval from the Bay Conservation and Development Commission, which has jurisdiction over development on the bay and 100 feet around it, according to Will Travis, the commission’s executive director. “Generally, high rise development along the waterfront is not something we’re opposed to if it has adequate public access,” he said. Marina Shores is proposed to have 6.8 acres of new parks, as well as marinas and access to open space. The project also would have public walkways on all areas along the water, and the developers plan to build trails and a pedestrian/bicyclist undercrossing beneath Highway 101. Altogether, the developers have promised 97 units of affordable housing for very low-income families making between $33,000 and $42,000, and 193 units for those making $80,000 to $102,000 a year, a moderate income in San Mateo County. The rest of the units would be sold at market prices. Two-bedroom condominiums in the nearby Redwood Shores neighborhood of Redwood City sell for approximately $450,000. But the developers may not place the 97 units of very low-income housing on the site, noted Nobles, who is a former city planning commissioner. A city report acknowledges that the very low-income units may be built offsite. More than 20 unmitigated impacts were identified in the project’s environmental impact report, mostly related to traffic. Loss of views from Redwood City and from the neighboring cities of San Carlos and Belmont is also identified as an unmitigated environmental impact. Nobles said additional unmitigated impacts of the project include effects on a nearby wildlife refuge and conflicts with planes at the nearby San Carlos Airport, which lies one mile away. But Powers said the Federal Aviation Administration has approved the project. Nobles, 84, was a leader in a 1982 referendum in Redwood City to prevent development of Bair Island, an open space area adjacent to Marina Village. That land was bought by the federal government and is now protected open space. The 1982 ballot measure won by less than 50 votes out of approximately 20,000. “This election will not be that close,” Nobles predicted. Powers refused to speculate about the project’s future should it be rejected. “We’ll cross that bridge when we come to it,” he said. Contacts: Paul Powers, Pauls Corporation, (650) 369-8651. Mike Church, Redwood City Planning and Redevelopment Agency, (650) 780-7237. Will Travis, Bay Conservation and Development Commission, (415) 352-3653. People for Housing Not High-Rises: www.housingnothighrises.org

Fighting over water is a popular sport in the West, where generations of lawyers have refined the practice until it approaches an art. Often, the quantities at stake are prodigious, the output of entire watersheds. In other instances, however, the volume is so minuscule as to leave outsiders puzzled by all the fuss. A dispute of the latter sort is threatening to break out in Ventura County, where an unusually broad coalition of interests has united behind one of the largest dam-removal projects in American history. As federal, state and local agencies press forward with environmental review and demolition planning, a handful of opposing voices have strained to make themselves heard. Having failed so far to secure the guarantees they desire, they have begun offering thinly veiled threats of legal action to stop the project or at least delay it — a move that could prove fatal to critical funding. The dispute is an illustration that, in California, there is no such thing as a trivial amount of water, and that even the most marginal dams have their defenders. Matilija Dam, completed in 1948 in a rugged canyon 16 miles north of Ventura, was envisioned as a means of providing flood control to a handful of small downstream communities and recharging groundwater supplies used by farmers in the sparsely populated Ojai Valley. With so few potential beneficiaries, the dam had such a dismal cost-benefit ratio that no state or federal agency could be persuaded to build it. Undaunted, the dam’s backers persuaded local voters to pass a bond measure to provide funding, and the county flood control district tackled the task. Problems were apparent nearly from the start. Cracks began appearing on the downstream face of the dam almost immediately after completion, and they worsened over time. A 1959 survey revealed that the dam’s crest was tilting upstream, probably because a chemical reaction between alkali in the cement and silica in the aggregate used in the concrete was causing it to expand and deteriorate. Concerned about the dam’s safety, the county twice had the dam’s crest notched to lower it and reduce stress on the foundation. The dam originally was 198 feet tall; subsequent modifications lowered it 30 feet. Bad concrete was not Matilija Dam’s only flaw. The mountains surrounding it are rising rapidly and eroding nearly as rapidly, producing huge amounts of debris. Matilija’s 7,000-acre-foot reservoir first filled with water in 1952. But it also had begun filling with sediment — about 79 acre-feet a year, according to a 1954 report by the U.S. Bureau of Reclamation (BOR). By 1969, the reservoir’s storage capacity had been cut in half. According to the BOR, the dam now traps 6 million cubic yards of sediment, the equivalent of 14 Rose Bowl stadiums full of sand, silt, gravel and cobbles. The reservoir has a storage capacity of about 500 acre-feet and provides no flood control, although it does provide a trickle of water to supplement the supply of the Ojai area’s main water provider, the Casitas Municipal Water District (CMWD). The dam contributes to beach erosion by trapping sand that would otherwise reach the coast, and blocks access to critical spawning grounds for endangered southern steelhead in the Ventura River watershed. Efforts to demolish the dam and restore the ecosystem have been under way since 1998, when local advocates secured federal support for a feasibility study. Strategies for taking out the dam and dealing with the sediment behind it are detailed in a technical analysis released in June and are examined further in a draft EIR/EIS released in July, opening a pubic-comment period that closed August 30. Almost simultaneously, local lawmakers announced that $79 million in federal funding for the $110 million project had survived committee scrutiny in Congress and made it into this year’s federal Water Resources Development Act. The Army Corps of Engineers is the lead agency under the National Environmental Policy Act (NEPA). The Ventura County Watershed Protection Agency (former the county flood control district) is the lead agency under the California Environmental Quality Act (CEQA). A final record of decision on the project is expected by the end of the year. Dealing with the trapped sediment is the most costly aspect of the project. There is too much to haul away, and allowing it to be eroded naturally by storm flows after the dam is gone would cause the lower river to be buried beneath debris, smothering habitat and increasing the flood risk. Under the preferred alternative, the fine silt would be dredged out, transported downstream in a slurry line and piled up outside the main river channel. The remaining coarse sediments would be stabilized temporarily in the old reservoir site in such a way that extremely high flows would erode them gradually and carry them downstream. Legislative support reflects the extremely broad coalition of interests united in support of the removal project, including virtually every federal, state and local agency with an interest in the dam or in steelhead, as well as a lengthy roster of environmental groups. At a July 28 public hearing on the draft EIR/EIS, however, representatives of CMWD and some small rural water agencies complained that the document fails to address the effect of the dam removal on their water supply. And at least one of those representatives argued that this failure left the document open to challenge under CEQA and NEPA — a hint of litigation to come. He may have a point: The EIR/EIS acknowledges a potential temporary reduction in supply as a consequence of the project., but vaguely waves off the impact by noting that replacement water could be purchased from the State Water Project or “obtained from other sources” — the kind of “paper water” assurances California judges increasingly seem disinclined to tolerate. In a state where individual farms consume thousands of acre-feet a year, the amount of water at stake seems trivial. The Casitas district has a lease with the dam’s owner, the Ventura County Watershed Protection District, to store water behind the dam. That water is dribbled through the dam’s outlet works into the river channel after winter’s peak flows have subsided, allowing it to be diverted downstream by CMWD. According to the BOR, Matilija Dam adds an average of 590 acre-feet a year to the local water supply. Casitas provides conflicting estimates. In a July 20 letter to the editor of the local newspaper, the agency’s board president asserted that Matilija reservoir provides “about 600 acre-feet of water.” A July 21 press release from the district asserts that removal of the dam could cause the district’s customers to lose 2,400 acre-feet. In a more recent press release, the district claims Matilija yields 790 acre-feet of water a year, a figure repeated in a recent interview with Casitas General Manager John Johnson. Regardless of which figure is correct, Mother nature has ideas of her own. Continuing sediment deposition, the EIR/EIS warns, will reduce Matilija Reservoir’s capacity to 150 acre-feet by 2010 and less than 50 acre-feet by 2020. Even before sedimentation eliminates the reservoir, the water district will lose access to it. The district’s lease with the dam’s owner expires on Jan. 1, 2009 — about the same time the dam would start to come down, if the project moves forward. And it is unlikely the county will be interested in renewing that lease, as it is spearheading the removal process. Contacts: John Johnson, Casitas Municipal Water District, (805) 649-2251. Jeff Pratt, Ventura County Watershed Protection District, (805) 654-2001. Draft dam removal EIR/EIS: www.matilijadam.org/public-report.htm

Two recent appellate court rulings appear to have clarified aspects of the California Environmental Quality Act and may have even broken new legal ground. One case involved the project description in an environmental impact report and in public notices. The court held that the identity of the proposed project’s end user did not have to be disclosed. The other case contained a lengthy discussion about how to address a proposed project’s impact on a community’s jobs-housing ratio. In that case, the court offered deference the city’s handling of the issue and provided guidance to other jurisdictions that address jobs-housing ratios in environmental studies. The first case was from the Town of Apple Valley, in San Bernardino County’s high desert. In October 2001, Pluto Development submitted an application for a 1.2-million-square-foot distribution center on 300 acres at the corner of Dale Evans Parkway and Johnson Road. Eight months later, the City Council certified an EIR for the project, adopted a statement of overriding considerations because seven environmental impacts could not be fully mitigated, and approved the project. In July 2002, a group called Maintain Our Desert Environment (MODE) sued the city for failing to comply with CEQA. San Bernardino Superior Court Judge John Wade halted construction of the project briefly, but ultimately he ruled for the city. MODE appealed, but a unanimous three-judge panel of the Fourth District Court of Appeal, Division Two, upheld the lower court. Two key issues in the case were tied together: Whether the project opponents had exhausted their administrative remedies, and the adequacy of the project description. The environmental documents did not identify who would use the distribution center. In fact, Pluto Development is simply an arm of Wal-Mart. MODE and the state attorney general argued that public notices and the EIR’s project description were incomplete and misleading because they did not identify Wal-Mart as the user of the proposed facility. “Not a lot of people knew what was going on until after the fact,” explained Raymond Johnson, MODE’s attorney. He contended that the city hid Wal-Mart’s identity to minimize public comment. And, because fewer issues had been raised during the administrative process, MODE had fewer issues to pursue in court because the group could not litigate over issues that were not part of the administrative review. But the court ruled that the project description passed muster under CEQA. The statute requires public notices to contain a “brief description of the proposed project.” “The key word here is ‘brief,’” Presiding Justice Manuel Ramirez wrote for the court. “ n choosing to use that word, the Legislature suggested that the project description contained in the public notice need not be as extensive as the description in the EIR itself, but need only be a brief, compact summary without elaboration or detail.” The attorney general argued that the project description in the EIR itself was inaccurate because it identified Pluto, and not Wal-Mart, as the project proponent. “That argument fails to note the difference between a project proponent/developer and a project user/tenant,” Ramirez wrote. “If CEQA was to be interpreted as the attorney general suggests, no such projects could ever proceed until all potential users/tenants were identified and subsequently investigated by the lead agency. In addition to being completely impractical, this interpretation finds no support in the sphere of law and regulation encompassed by CEQA.” Ramirez cited , (2000) 83 Cal.App.4th 1004 (see , October 2000), in which the court ruled that the identification of Borders bookstore as the tenant of a proposed project was not enough to trigger additional environmental review. “So long as the project is approved, CEQA has no concern about who uses it,” Ramirez wrote. The attorney general and MODE argued that withholding Wal-Mart’s name resulted in less than the “full disclosure” required by CEQA. But the court held that the full disclosure requirement applies only to environmental impacts. “Therefore, in order to demonstrate that CEQA requires disclosure of the identification of the end user of a project, it is incumbent upon MODE and the attorney general to demonstrate that the identity implicates potential physical environmental impacts,” the court ruled. But MODE attorney Johnson said the court’s argument is circular: To demonstrate that a specific user will have an environmental impact, the public must know who the user is. If the public does not know, it cannot make a case. Johnson contended that Wal-Mart’s policies for delivery are different from other companies’ and results in large numbers of trucks parking around distribution centers. Johnson also complained because the court upheld the EIR’s traffic analysis, which was based on traffic at an unnamed “similar facility” and not on the Institute of Transportation Engineers’ figures that are typically used. “Effectively what the court is saying … is that even though you know who the proponent is, you don’t have to disclose that proponent,” Johnson complained. “And you don’t have to use industry standards for evaluating impacts. You can use another facility owned by the same proponent … with no way of being able to check it.” But Neal Singer, the city’s attorney, said the project opponents were trying to build too much into the project description requirement. “The administrative record was bad for them,” Singer said. So opponents argued that the project description should excuse them from the normal requirements for getting everything in the administrative record, he said. “There are all kinds of reasons for submitting projects,” Singer added. “If you had to know the end user every time, it would be pretty cumbersome,” MODE has asked the state Supreme Court to review the case. The second case came from the City of Irvine and involved the city’s general plan amendment and zoning change for the 7,743-acre “northern sphere,” near the former El Toro Marine Corps base. The city approved the northern sphere plan and an EIR in June 2002. The environmental group Defend the Bay sued, alleging, among other things, that the project would exacerbate employment-rich Irvine’s jobs-housing imbalance. A trial court ruled for the city. Defend the Bay appealed but the Fourth District, Division Three, upheld the lower court. The city’s plan called for development that would eventually create 17,667 jobs and 12,350 housing units, for a ratio of about 1.44 to 1. Defend the Bay argued that there was insufficient evidence for the EIR’s conclusion that the project would not worsen Irvine’s housing shortage. The EIR said that the project would actually improve the city’s jobs-housing balance because other projects have jobs-housing ratios of up to 8.2 to 1. Plus, the EIR stated, there is “considerable future housing growth” planned in South Orange County and the area is “expected to remain housing rich through 2025” with overall jobs-housing ratios in different areas of 1.05 to 1 and 1.28 to 1. “The evidence supports the no-adverse-impact conclusion for the current project,” Justice William Bedsworth wrote for the Fourth District. “Needed housing will be added, the city-wide imbalance of more jobs than housing will be ameliorated, and the shortfall in housing within the city will be made up by plentiful housing in adjacent communities. Whether we would agree that more jobs than housing is an adverse impact is not the question, and it is not our function to second-guess the city’s decision. Rather, our role is to determine if the conclusion reached by the city has support in the record. It does.” Defend the Bay argued that the project was inconsistent with the city’s general plan, which calls for “balanced residential and nonresidential development throughout the city.” The group also contended the EIR’s alternatives analysis and statement of overriding consideration were inadequate because they did not recognize the project’s housing imbalance. The court rejected these contentions. “Defend the Bay sees an inconsistency here because the project creates more jobs than housing and adds to the city’s housing shortage,” Bedsworth wrote. “Thus, it says, there is no balance between jobs and housing. This is semantic manipulation. We are not dealing with the assaying of minerals here. Balance does not require equivalence, but rather a weighing of pros and cons to achieve an acceptable mix. The general plan requires the city to ‘strive to improve’ the jobs-housing relationship. This project clearly does so. That Defend the Bay would strike a different balance than the city does not mean the project is inconsistent with the policies at issue.” Jeffrey Melching, the city’s lawyer, said the decision is useful because it says that blind adherence to a certain jobs-housing ratio is unnecessary. The court also said it was acceptable for the city to consider regional housing conditions. “I think it’s the first case in California that has a discussion in great detail of the jobs-housing ratio,” Melching said. “It really set out a guideline for how you’re going to look at jobs-housing balance questions.” Interestingly, Defend the Bay and the Irvine Company (the real party in interest) asked the court to dismiss the case after oral arguments were conducted because they had reached a settlement. The court declined to dismiss the matter, though. “Whether a public entity can approve a development project that creates more jobs than housing is a matter of public interest and likely to recur,” Bedsworth wrote in a footnote. The city was not a party to the settlement, Melching said. The fact that the city rezoned 227 acres in the northern sphere from a medical and science designation to residential “had nothing to do with the settlement. In fact, it predated the settlement,” he said. First Case: , No. E033904, 04 C.D.O.S. 6060, 2004 DJDAR 8195. Filed June 10, 2004. Ordered partially published July 2, 2004. The Lawyers: For MODE: Raymond M. Johnson, Johnson & Sedlack, (909) 506-9925. For Apple Valley: M. Neal Singer, Singer & Coffin, (949) 863-1224. For Pluto Development: Jennifer Guenther, Gresham, Savage, Nolan & Tilden, (909) 684-2171. Second Case: , No. G032062, 04 C.D.O.S. 5877, 2004 DJDAR 7965. Filed June 29, 2004. The Lawyers: For Defend the Bay: Kevin K. Johnson, Johnson & Hanson, (619) 696-6211. For the city: Jeffrey Melching, Rutan & Tucker, (714) 641-5100. For the Irvine Company: Christopher Garrett, Latham & Watkins, (619) 236-1234.

The court of appeal has cleared the way for the Modesto Redevelopment Agency to sue manufacturers and suppliers of dry cleaning solvents and equipment. While the First District Court of Appeal did not rule on the Redevelopment Agency’s claims, the unanimous appellate panel did overturn a lower court decision to dismiss the lawsuit against the manufacturers and suppliers. By potentially making more parties liable for the cleanup of contamination, the decision could bolster redevelopment agencies’ efforts to clean up tainted land and water. At issue is liability for contamination from two dry cleaning solvents, perchloroethylene (PERC) and trichloroethylene. The city argued that dry cleaners dumped the solvents into the city’s sewer system and let the solvents leak into the environment. The city sued a collection of manufacturers, distributors and dry cleaners. Under the Polanco Act (Health & Safety Code § 33459), a redevelopment agency may remediate contaminated properties within a project area and may recover the costs from the responsible parties. The definition of a “responsible party” is contained in the Porter Cologne Water Quality Control Act (Water Code § 13000 et seq.). San Francisco Superior Court Judge Richard Kramer granted summary judgment for the manufacturers and distributors, but he also asked for guidance from the appellate court. Writing for the First District, Justice Maria Rivera first dealt with the common law definition of nuisance, concluding, “ iability for nuisance does not hinge on whether the defendant owns, possesses or controls the property, nor on whether he is in a position to abate the nuisance; the critical question is whether the defendant created or assisted in the creation of the nuisance.” The court then moved to the question of whether the city’s claims under the Polanco Act fell within the realm of nuisance or of product liability law. The court turned to , (1990) 221 Cal.App.3d 1601, a case that also involved manufacturers, distributors and end users of hazardous materials. “We agree with the first stated conclusion in — that those who create or assist in creating a system that causes hazardous wastes to be disposed of improperly, or who instruct users to dispose of wastes improperly, can be held liable under the law of nuisance,” Rivera wrote. “Here, for example, the city claims that, with knowledge of the hazards involved, some of the defendants instructed the dry cleaners to set up their equipment to discharge solvent-containing wastewater into the drains and sewers, and that others gave dry cleaners instructions to dispose of spilled PERC on or in the ground. We conclude that these kinds of affirmative actions or instructions could support a finding that those defendants assisted in creating a nuisance.” But the court distinguished those parties that provided instruction to dry cleaners from manufacturers that made products but offered no guidance to end users. “ e conclude that those who took affirmative steps directed toward the improper discharge of solvent wastes — for instance, by manufacturing a system designed to dispose of wastes improperly or by instructing users of its products to dispose of wastes improperly — may be liable under that statute , but those who merely placed solvents into the stream of commerce without warning of the dangers of improper disposal are not liable under that section of the Porter-Cologne Act,” the court ruled. The First District returned the case to the trial court with instructions to “apply the standards articulated in this decision” to the facts in Modesto. The Case: , No. A104367, 04 C.D.O.S. 4692, 2004 DJDAR 6452. Filed May 28, 2004. Modified June 28, 2004 at 2004 DJDAR 7928. The Lawyers: For Modesto: Duane C. Miller, Miller, Axline & Sawyer, (916) 924-8600. For Dow Chemical (real party in interest): Gennaro Filice, Filice, Brown, Essa & McLeod, (510) 444-3131.

Habitat conservation plans have become popular tools for balancing development with protection of imperiled plant and animal species. Since Congress authorized them in 1982, nearly 500 habitat conservation plans (HCPs) have been adopted nationwide. The plans were not always so popular. Only 20 HCPs won approval during the program’s first 12 years. Their use accelerated in 1995, when the Clinton administration began promoting them in the hope of blunting congressional efforts to rewrite the Endangered Species Act (ESA). And they really took off in 1998 with adoption of the controversial “no surprises” policy, which made HCPs more attractive to landowners by promising them relief from future regulatory meddling. The no surprises policy was immediately attacked by environmental organizations, which recently won a court ruling overturning it. Although not quite the decisive victory the plaintiffs sought, the ruling nevertheless resulted in the suspension of the federal government’s HCP program and has cast doubt on its long-term future. As originally adopted in 1973, the ESA made it a crime to “take” a species listed as threatened or endangered, “take” being defined as any activity that kills or harms listed species or destroys their habitat. In 1982, Congress amended the ESA to allow federal agencies to issue permits for the “incidental take” of listed species during the course of otherwise lawful activity. Any application for an incidental take permit must be accompanied by an HCP that spells out how the effect of the permitted activity on a listed species will be minimized, monitored and mitigated. Landowners initially were unenthusiastic, mainly because of a requirement that HCPs include a clause allowing their terms to be changed whenever federal agencies deemed it necessary. Why go to the trouble and expense of developing a habitat plan, landowners reasoned, if the government could rewrite the permit at any time? The “no surprises” policy, originally announced in August 1994, was adopted to cure that perceived shortcoming. The policy required that federal agencies approving HCPs provide “assurances” to landowners that once an incidental take permit was approved, the government would not later change the permit’s terms in a way that increases the landowner’s costs or further restricts the use of natural resources. Under “no surprises,” no additional conservation or mitigation measures could be imposed even if changed circumstances rendered the HCP inadequate to protect a listed species. Biologists and environmentalists decried the policy, charging that it opened a gigantic loophole in the ESA and ignored the uncertainty inherent in the science of conservation biology and ecosystem management. In 1996, several groups filed a lawsuit alleging that the policy had been adopted in violation of the Administrative Procedures Act, which requires public notice and an opportunity for public comment before such regulations are adopted. The federal government settled that suit by agreeing to delay final adoption until the government had solicited public comment. About 800 comments subsequently were received, 755 of them opposing the policy. Many comments came from conservation biologists who warned that without a mechanism to respond to such “surprises” as drought, disease, fire, storms and floods, the HCP program would guarantee the loss of species and habitats. But the federal agencies adopted the original policy virtually unchanged. In 1998, six environmental groups sued again, arguing that the government still had failed to comply with administrative law and that the policy violated the ESA. While that suit was pending, the federal government adopted yet another policy making it more difficult to revoke incidental take permits. The plaintiffs, including the Spirit of the Sage Council and the Humane Society of the United States, amended their suit to allege that the revocation policy also violated the ESA and the Administrative Procedures Act. Intervening as defendants in the litigation were the city and county of San Diego — where large-scale HCPs are a particularly popular conservation tool (see , February 2003) — Orange County, Irvine Ranch Water District and a coalition that includes the National Association of Home Builders, the Building Industry Legal Defense Foundation, the Kern Water Bank Authority, and the American Forest and Paper Association. In December 2003, Judge Emmet Sullivan of the federal district court in Washington, D.C., ruled that the federal government had, indeed, violated the Administrative Procedures Act by adopting both the “no surprises” and permit revocation policies without prior public notice and without providing a meaningful opportunity for public comment. He suspended both policies and ordered officials to start over. “The ruling is a huge victory for imperiled animals and plants, as well as the public’s basic right to have a say in how public resources are managed,” said Leeona Klipstein, executive director of Spirit of the Sage Council. The defendants were less enthusiastic. “The inability to give ‘no surprises’ assurances to landowners would not only be a breach of faith with those landowners, it would also be a serious impediment to our ability to conserve and enhance habitat for imperiled wildlife,” said Craig Manson, assistant secretary of the Interior. Duane Desiderio, vice president of the National Association of Home Builders, was more blunt. “Now, a permit isn’t worth the paper it’s written on,” he told the Associated Press. The legal saga did not end there. Following the judge’s ruling, USFWS Director Steven Williams issued a memo directing his regional managers to continue approving HCPs containing the no surprises clause, as long as they also included legal language noting that the remaining stipulations in each HCP would remain in effect if the no surprises policy were subsequently invalidated. The plaintiffs went back to court, and on June 10, Judge Sullivan ordered the agencies to stop issuing HCPs containing the no surprises clause. He also gave the agencies until December 10 to complete the process of developing new permit rules. Williams then issued another memo directing his agency to stop approving incidental take permits altogether, but not before the USFWS on June 22 approved an HCP and incidental take permits covering 1 million acres and 146 species in rapidly growing western Riverside County. The Riverside County plan, perhaps the most ambitious HCP to date, does not contain the no surprises guarantee, although federal officials could add it later. Significantly, Judge Sullivan did not rule on the substantive claim in the lawsuit: that the no surprises policy violates the ESA. Absent such a ruling — and given the popularity of no surprises HCPs — it is likely the federal agencies will simply readopt the polices after the legally prescribed public comment process has been completed. If that happens, another round of litigation is likely. Contacts: U.S. Fish and Wildlife Service, habitat conservation planning: http://endangered.fws.gov/hcp/index.html Spirit of the Sage Council: www.sagecouncil.com

The average home price in California topped $400,000 in June. This news stimulated the now-familiar headlines about how even beat-up tract homes from the ’60s have become unaffordable for middle-class families. It’s getting to the point that a six-figure income does not guarantee homeownership. But what does this do for the more traditional “affordable” housing that we in California have supposedly been fighting about for the last several decades – housing not for the middle class but for low-wage workers and for the poor? Has this topic slipped off the radar screen altogether amid concerns about housing for teachers and paramedics? And when concern for poor people does emerge, will the astronomical price of housing make the cities and neighborhoods more amenable to lower-cost housing – or less? These thoughts surfaced recently when two affluent cities in South Orange County, struggled with the question of how to consider two different “affordable” housing projects. Back in January, the Steadfast Cos. gave up on an apartment proposal for a 23-acre hilltop site on Jeronimo Road in Mission Viejo after intense neighborhood opposition. The proposal called for 168 units, or about 7 units per gross acre – about the density of a typical single-family subdivision. Nevertheless, the project was designed to accommodate low- and moderate-income residents, and neighbors objected. According to the , everyone appearing before the Planning Commission opposed the project and claimed it “would bring overcrowded apartments, graffiti, gangs, drugs, and even drive-by shootings.” The perplexed developer, who had brought forth the low/mod project in response to direction from the city’s staff, went back to the drawing board. In June, the affordable housing dilemma surfaced in San Juan Capistrano when the City Council voted in closed session not to sell a 2.7-acre parcel of land to a nonprofit housing developer. Once again, neighborhood concern was the driver. As one council member said, “The neighbors were concerned about the density and the property values. I felt the complex was too expensive, too massive, and wasn’t right for the neighborhood.” In each of the two projects, some units would have been set aside for families categorized as “very low income,” which in the case of Orange County means a household income of about $37,000 per year, while others would have been set aside for “low income” families – those up to about $57,000. In each case, the city was driven by pressure to comply with the low- and moderate-income housing allocation target that resulted from the regional housing needs assessment process – the dreaded “housing element” requirement overseen by the state Department of Housing and Community Development. One of the ironies of the recent real estate boom is that it seems to have rendered the income categories somewhat obsolete. The housing element system requires jurisdictions to plan for the amount of housing required in three specialized income categories – very low income (up to 50% of median income), low income (50% to 80% of median income), and moderate income (80% to 120% of median income). The assumption is that people making more than 120% of median income can take care of themselves in the housing market. The recent debate over workforce housing has left the first two categories behind. Builders focusing on workforce housing usually say they are targeting households at 80-200% of median income – which today amounts to somewhere between $50,000 and $100,000 in most parts of California. (See , July 2004.) At current interest rates, these incomes can leverage home prices of $200,000 to $400,000 – prices that were well within range just a year or two ago, but are quickly vanishing today. More significantly, the recent price run-up has increased the gap between market and subsidized housing, especially in affluent areas. Maybe a family’s “low-income” pay can leverage a $200,000 house (or rent of $1,000 to $1,500 a month). But such neighbors don’t look very attractive when the average home price in your tract is $800,000 and rising by $10,000 or more a month.. Ironically, the problem is not that everybody wants to build high-end housing instead of affordable housing. There are plenty of developers – both nonprofit and for-profit – who are trying to make “affordable” housing deals work. There are also lots of different pots of money around – low-income housing tax credits, redevelopment housing setaside, Proposition 46 funds – that can be tossed into the mix. (San Diego, for example, is considering increasing the bed tax and/or levying a car rental tax to provide funds.) And there are lots of cities and counties promoting low-income housing, either because they think it is the right thing to do or because they feel the heat from HCD. The problem, as the two South Orange County examples suggest, is the sites. A given site may look good – until the public meetings start. Cities often try to avert this problem by identifying sites that seem segregated from higher-end residential neighborhoods. In the Mission Viejo case, the 23-acre parcel was located on a hill 40 feet above street level. It was adjacent to commercial property and did not abut any residential parcel. Residents responded by circulating a flier reading “Stop the Nightmare Before It Starts,” which contained a rendering of a public housing project. So who’s being left out in the cold? Actually, it is not all low-wage or low-income people. Some folks who qualify for affordable housing are more acceptable than others – senior citizens especially. In fact, some reports suggest that because cities often use senior projects to meet their affordable requirement, there’s a glut of senior housing. In Santa Clara County, developers seeking to avoid political opposition have focused on senior housing and housing for moderate-income residents (80-120% of median income). The result? “It’s cutthroat,” says one San Jose developer, who has proposed a moratorium on low-income senior housing. This glut may not last long, and it might not become widespread. After all, everyone is predicting a boom in the elderly population in California. But it does suggest that some low-income groups benefit while others do not. And that may have peculiar consequences as well. The gap in affordable housing appears mostly to affect families with low-wage workers – farmworkers, retail clerks, and others seeking to make ends meet on one or two minimum-wage jobs. But for these groups, there is another way around the housing problem – if they’re willing to overcrowd their way into the American dream. Anecdotal evidence suggests that extended immigrant families are bootstrapping their way to ownership even in this housing market by doubling and tripling up – not only in the housing unit itself, but on the mortgage. By combining their salaries, three, four, or five low-wage earners can escalate beyond the moderate-income category and buy a nice house. It will be interesting to see how affluent neighbors react to that kind of upward mobility, because there is an inherent conflict. On the one hand, the neighbors are undoubtedly thrilled to see owner-occupied single-family homes nearby. On the other hand, they’re probably not too happy to see these very same houses overcrowded by low-wage workers. Many cities have overcrowding ordinances, so the neighbors might call the local code enforcement department. But that would mean kicking people out of houses that they own. If that starts happening, the battle over the Jeronimo Road hill will pale by comparison.

San Francisco and the Bay Area residents have waited many years for a new transbay terminal in downtown San Francisco, and they have approved taxes to fund the long-planned project. However, the proposed multi-modal transit station could get waylaid by cost concerns, competing interests and even a giant condominium tower being built where a rail line is planned. Prospects for the project — estimated to cost about $2 billion to build, and $4 billion in total when financing costs are included — improved in June when the San Francisco Board of Supervisors unanimously approved an environmental impact report. But a 51-story condominium project being built in the path of a rail line into the terminal has led to a lawsuit and increased expenses. The current transbay terminal building, 55 years old and decaying, stands out in the gentrifying Mission Street corridor in San Francisco. Surrounded by high rises, the building serves as a terminus for a number of bus lines throughout the region. When the Bay Bridge opened in the 1930s, the terminal was also used by trains crossing the bridge. Today, the transbay terminal is better known as a gathering place for homeless people, and has no connections to the major train lines in the region. Amtrak lets off its passengers across the bay in Emeryville. The new transbay terminal is supposed to tie Bay Area transit threads together. Caltrain riders from the South Bay would arrive by a new underground line at the terminal, and could quickly connect to BART and Muni trains via a block-long automated walkway. In addition, a proposed bullet train connection would whisk passengers to Los Angeles in 2.5 hours. The estimated cost of the terminal is $1 billion, with the 1.3-mile underground train extension costing $977 million more. Plans for the building include a 600,000-square-foot building of six stories. It would serve buses from transit districts in San Francisco, Marin, Sonoma, Alameda, Contra Costa and San Mateo counties, along with Greyhound. Six train tracks will be built on the bottom floor. Redevelopment of the surrounding neighborhood would also increase, with the addition of 3,200 housing units, retail stores, offices and a hotel. The transbay project is being overseen by the Transbay Joint Powers Authority (TJPA), whose members are the major project stakeholders — San Francisco, the Alameda Contra Costa Transit District, and the Peninsula Joint Powers Board, which runs Caltrain. Of immediate concern is resolving a dispute with developer Jack Myers, who is pursuing plans for a 432-unit condominium project adjacent to the terminal site. Construction on the Myers property began in May. Only days before the terminal's EIR was approved, San Francisco planners slapped a stop work order on Myers' project, claiming that the building permit was not valid. The property has had building permits since 1991, but previous owners were unable to build, according to Adam Alberti, a spokesman for the JPA. Myers took control of the parcel last year. Alberti said that the landowners were informed of the situation as the EIR was underway, and the parcel was identified in the EIR as one of 23 properties necessary for the rail line project. But Myers is not backing away from the condominium project. "We're going to get the building permits back and we're going to construct the project," said Tim Tosta, an attorney for Myers Development. "They were fully vested and the building was under construction." Several scenarios have been considered for resolving the impasse: The Board of Supervisors could reroute a train tunnel around the property; Myers could agree to a buyout of the land or a land swap; or the TJPA could acquire the property through eminent domain. A decision appeared to be close in late July. Funding for the transbay terminal comes from more than a dozen sources, including a $1 bridge toll increase that Bay Area voters approved in March, sales tax revenue from San Francisco, and a future ticket charge on transbay commuters. Caltrans is turning over $290 million worth of land in the area that will be sold to finance the project. All but $182 million of the needed funding has been identified. However, $475 million for the train extension depends on whether state voters approve a bond measure to build the proposed high-speed rail system. Originally slated to appear on this November's ballot, the bond measure has been delayed until 2006 or 2008. If the high-speed rail is not funded, the Caltrain extension may not get built. Alberti, TJPA spokesman, said the train tracks can be added later if the funding is not available when construction begins. Current plans are for the project to begin in 2005, with completion by 2012. The approval of the EIR capped a 30-year planning effort to rebuild the terminal. Past San Francisco mayors have been less than enthusiastic about the project. As expected, though, opponents filed lawsuits challenging the EIR in mid-July. Myers filed one of the lawsuits, arguing that the study did not account for his planned residential tower. A group of architects, engineers, business owners and property owners who favor an alternate transbay terminal one block from the current site filed the other lawsuit. The competing proposal backed by the EIR litigants could be built $1 billion to $1.5 billion cheaper than the project that has been approved, according to Jon Kaufman, executive vice president at Solem and Associates, a public affairs firm in San Francisco. The lower cost is because most of the land for the alternate project is currently used for parking lots, and because the project would use a different alignment for an underground rail line, he explained. Kaufman also said the competing plan would not require construction of a new temporary terminal while the old one is torn down, and would allow the current terminal site to be sold for real estate development once a new terminal is in place. "It's a huge expense," Kaufman said of the approved project. "It's much more expensive than it needs to be." But the TJPA's Alberti said the temporary terminal will be more of a parking lot, and not much of a structure. Tosta, Myers' attorney, likened the terminal project to gambling. "You might as well go to Las Vegas and put your money on the table," he said. But Alberti said the project will serve the region. "It is an expensive project," he said, adding, "It's going to cost us a lot less today than to build it tomorrow." Contacts: Adam Alberti, Transbay Joint Powers Authority, (415) 227-9700. Jon Kaufman, Solem & Associates, (415) 788-1829. Tim Tosta, Steefel, Levitt & Weiss (415) 403-3343. Transbay Joint Powers Authority: http://sfgov.org/site/tjpa