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Red flags went up in the environmental community during May 2002 when the Bush administration announced it was forming a task force to "modernize and improve" the National Environmental Policy Act (NEPA). Two years later, release of the task force’s final report suggests that many of the fears voiced by defenders of this landmark federal statute have yet to materialize. Passed by Congress in 1969, NEPA requires the U.S. government to assess the environmental effect of any significant project undertaken by a federal agency, funded with federal money, or requiring a permit from a federal agency. It requires public disclosure of the results of that assessment and a public determination as to whether the benefits outweigh the consequences. In broadest terms, it is the bedrock federal environmental law. It has served as the blueprint for similar laws adopted by half the states, including the California Environmental Quality Act (CEQA). So when James Connaughton, chairman of the White House Council on Environmental Quality (CEQ), authorized creation of the NEPA task force, the response of many environmental groups echoed that of William Snape III, vice president and chief counsel of Defenders of Wildlife. "In sum," he wrote in a letter to the task force, "we believe that NEPA is perhaps the most critical of all federal environmental laws, and assert its procedures are effective and efficient when utilized in good faith. The adage ‘don’t fix what ain’t broken’ possesses poignant relevance here." The CEQ, which operates in the Executive Office of the President, was established by NEPA and charged with promulgating NEPA regulations applicable to other federal agencies, and with resolving disputes among federal agencies regarding NEPA compliance. The council comprises three members appointed by the president and subject to Senate confirmation. Critics of the Bush administration’s environmental policies grew alarmed when Connaughton — a former lobbyist for mining companies and the Chemical Manufacturers Association — directed the task force to look into expanding the use of "categorical exclusions" by which federal agencies can declare certain types of projects exempt from environmental analysis, and to review the "balancing of public involvement and information security" in the wake of the September 11, 2001 terrorist attacks (see , November 2002). Environmental organizations viewed the comment regarding the "balancing" of public involvement and security needs as an attempt to undermine NEPA and quash public involvement. In their view, the Bush administration had made its aims clear in this regard by seeking to exempt logging plans from analysis and public review under the guise of fire prevention, to expedite review of some transportation projects, and to exempt federal activities from NEPA if they occur in offshore waters. Critics of the administration also were alarmed by the hurried nature of the task force’s work: It initially imposed a 45-day deadline to collect public testimony and was to issue its final report by the end of 2002. The public comment period, however, was quickly extended another month. Ultimately, the task force received written comments from more than 650 individuals, organizations, agencies and tribes. And the final report was not released until September 24, 2003, after which the CEQ commenced a series of four, two-day regional public hearings at which it invited comment on the report’s recommendations. Those regional meetings were conducted on Squaxin Island in the state of Washington, and in Pennsylvania, Tennessee and Colorado between October 2003 and January of this year. Rather than a blow to the heart of NEPA, the final report is largely a compilation of procedural minutiae. The recommendations include: • Sponsoring meetings, conferences, and workshops to coordinate information sharing. • Clarifying the appropriate role of technology in communicating during the NEPA process to enhance public involvement. • Establishing a committee to advise CEQ on how it might improve training for government employees involved in NEPA activities. • Developing a "Citizen’s Guide to NEPA." • Emphasizing the importance of collaboration as agencies expand the use and scope of programmatic NEPA analyses. • Developing criteria for agencies to use when evaluating whether a programmatic document has become outdated. • Convening a work group to consider how adaptive management techniques might be incorporated into the NEPA process. • Clarifying how to determine whether a new categorical exclusion is appropriate. • Issuing new guidance to specify the requirements for environmental assessments (EAs) and findings of no significant impact (FONSIs). Although they are not mandatory or legally binding, the task force recommendations may very well improve coordination of NEPA activities among various federal agencies, and improve public communication and involvement by taking advantage of technologies such as the Internet, which were unavailable (and perhaps unimaginable) when President Nixon signed NEPA into law in 1970. Judging by the response that has greeted the report, however, it appears unlikely that the task force recommendations, even if incorporated into NEPA policy directives by CEQ, will have much effect on the day-to-day application of the law. Environmental groups have largely been silent regarding the final report, and the testimony collected during the public reviews indicates a wary endorsement of the task force’s general recommendations with respect to greater public involvement and clearer, more consistent application of NEPA requirements from one federal agency to another. In public comments filed with CEQ separately from the regional meetings, the only mainstream environmental organization to respond to the final task force report, the National Parks Conservation Association, concluded that the recommendations, in general, are sound. The parks association specifically endorsed several of those findings, such as the development of a citizen NEPA handbook; clearer coordination of NEPA with other federal environmental statutes; more explicit guidelines for EAs, categorical exclusions and FONSIs; and greater public involvement in the NEPA process. "If there is any clear, overarching message from Squaxin Island," the facilitator of the October meeting concluded in a final report on the proceedings, "it is that NEPA is an eloquent law that was perhaps ahead of its time. Although we were not trying to reach consensus on any of the issues, there was a clear consensus that the National Environmental Policy Act had served the nation well and needs no amendment. As one panelist noted, ‘NEPA is old, but so is the U.S. Constitution.’ " Contacts: NEPA task force final report: Council on Environmental Quality National Parks Conservation Association, (202) 223-6722.

Long a land of big dreams and failed schemes, California City has lured a major automobile company to town with a redevelopment deal and environmental planning assistance. In March, Hyundai Motor America started building a test track and related facilities in California City that will employ about 100 people, which would make Hyundai the second largest employer in town. The project does have detractors, though. Some landowners contend the city has abused its redevelopment and eminent domain powers, while some environmentalists argue that the project does not adequately mitigate impacts to two rare animal species. The city aggressively defends itself against such accusations. City Manager Jack Stewart pointed out that a federal district court ruled for the city in a lawsuit brought by property owners, and a habitat conservation plan for the desert tortoise has been accepted by state and federal agencies. Still, litigation on a number of fronts is continuing. In the meantime, contractors are grading, paving, building and installing utilities for the 4,340-acre test track facility, which includes a 6-mile-long oval track, a hazard course and 20,000-square-feet of engineering and test buildings. Construction is scheduled for completion this fall, according to Stewart. California City is located in southeastern Kern County, a little north of Edwards Air Force Base. With 203 square miles of the western Mojave Desert within its boundaries, California City is the state’s third largest city behind Los Angeles and San Diego. But California City has only about 11,500 residents. There have been a number of plans for large-scale development along the lines of Palm Springs since the city incorporated in 1965, but little has come to fruition despite the construction of 600 miles of roads and the city’s open-for-business attitude. By far the largest institution of any kind in California City is a 2,600-inmate, minimum security federal prison. About 530 people work at the prison. A few years ago, California City began work on annexation of 29 square miles on its southern flank. City officials could see that growth in the area would more likely be along Highway 58, east of the City of Mojave — and not north up Highway 395, as envisioned earlier, Stewart said. The annexation brought the city limits to Highway 58. At the same time, the city detached 29 square miles on its north side. Neither of the large tracts was developed, but the land the city detached was higher quality habitat, Stewart said. The city also added the new territory to its redevelopment project area, which already covered most developed parts of town. Along the way, Hyundai officials contacted the city about the proposed test track. Hyundai reportedly liked California City because it offered a large, contiguous site and is within a few hours drive of the company’s design center in Irvine. Under the deal eventually worked out, California City’s redevelopment agency and Hyundai will split tax increment 50/50 over 10 years to reimburse the Korean company for the cost of building roads and water lines, according to Stewart. The redevelopment agency assembled about 200 parcels covering 1,000 acres. Most landowners willingly sold to the agency, which then sold the land to Hyundai. However, the city has pending eminent domain suits against about a dozen holdout landowners. The city also agreed to include the Hyundai test track in the EIR for the annexation and redevelopment project area extension. The city worked with the U.S. Fish and Wildlife Service to arrange an Endangered Species Act "take" permit for the threatened desert tortoise, and a state "take" permit from the Department of Fish and Game for the Mohave ground squirrel, which is on the state’s threatened species list. In exchange for the city’s assistance, Hyundai will employ about 100 people in jobs ranging from security guard to engineer, Stewart said. Honda has a similar test facility in unincorporated Kern County that has proven to be a stable employer, he said. The Hyundai project will also generate tax increment although Stewart declined to estimate how much. Hyundai is reportedly spending $50 million to build the test facility. The federal take permit is part of a habitat conservation plan (HCP) that addresses only the desert tortoise and the Hyundai site. The Fish and Wildlife Service adopted the HCP in January. It calls for offsetting the loss of tortoise habitat acre for acre by protecting land elsewhere. Hyundai has purchased 3,387 acres adjacent to an existing tortoise preserve and has established a $1.5 million endowment. Tortoises found on the site (at least two dozen have been located) are supposed to be moved to protected land. Additionally, the state Department of Fish and Game has required Hyundai to offset every acre of lost ground squirrel habitat with 2.3 acres of protected land elsewhere. In February, the Center for Biological Diversity and Defenders of Wildlife sued the Fish and Wildlife Service over the HCP. The groups characterized the site as "pristine desert wildlands" and said the HCP does not do enough to protect the tortoise. Center for Biological Diversity ecologist Daniel Patterson said a better site selection process would have placed the test track elsewhere. "In the same region there is a bunch of old, trashed ag land with little habitat value," Patterson said. While the environmental litigation is only getting started — and settlement talks have already commenced — litigation over redevelopment and eminent domain activities is deep in the legal system. Project opponents filed a validation action regarding California City’s expansion of redevelopment project area borders. A Kern County Superior Court judge threw out the suit on procedural grounds, but in March the Fifth District Court of Appeal overturned that decision and the case is headed back to Superior Court for trial. The lawsuit questions whether land in the 15,000-acre addition to the city’s redevelopment project area is blighted and primarily urbanized, as required by state redevelopment law. The city based its findings on the fact that there are numerous odd-shaped lots with multiple owners, and the parcels are not adjacent to roads or utilities. The city also found that the lots are of inadequate size for development and were created by an old land fraud scheme. But June Ailin, of Kane, Balmer & Berkman, who represents landowners challenging redevelopment and one holdout property owner, said many parcels in the area are 10 to 20 acres apiece, "not postage stamp lots that nobody can do something with." She added, "What they are saying is that absence of infrastructure equals blight. But absence of infrastructure does not equal blight. It’s vacant nothing surrounded by vacant nothing." California Redevelopment Association (CRA) Executive Director John Shirey said he did not know a great deal about the California City project. But he said, "I get concerned whenever I hear about wide-open desert land being called blighted and designated for a redevelopment area. … It needs to be urbanized and it needs to be part of an area that has seen better days." In fact, the use of redevelopment to build shopping centers and golf courses in the Coachella Valley desert led to the 1993 reform of state redevelopment law — reforms that CRA backed and that appellate courts have interpreted tightly. Stewart, though, makes no apologies. The city’s actions met the definition of redevelopment law, he said. "My desire would be to extend it a lot further," Stewart said. Contacts: Jack Stewart, California City, (760) 373-8661. June Ailin, Kane, Balmer & Berkman, (213) 617-0480. Daniel Patterson, Center for Biological Diversity, (520) 623-5252. Project environmental assessment and habitat conservation plan: Hyundai HCP

Mitigation measures taken after the issuance of a mitigated negative declaration do not satisfy the California Environmental Quality Act, the Second District Court of Appeal has ruled. In a case involving a water district’s proposal to cover a small reservoir in the unincorporated Santa Barbara County community of Summerland, the court also ruled that the district should have considered the project’s potentially substantial impact to aesthetics. At the behest of the state Department of Health Services, the Montecito Water District in 1998 decided to cover the 4-acre Ortega Reservoir with an aluminum roof to preserve water quality. The district conducted an initial study, which identified flooding as a potentially significant impact because of runoff from the impervious roof. Rather than prepare an environmental impact report, the district adopted a mitigated negative declaration (MND) that said the project "shall incorporate design measures" to detain runoff and meter its release "so that no modification to the downstream 100-year floodplain will result." The 11-home Ocean View Estates Homeowners Association was not satisfied and filed a CEQA suit against the district. Santa Barbara County Superior Court Judge James Brown ruled for the district. The association appealed, and a unanimous three-judge panel of the Second District, Division Six, reversed the lower court. The association argued that the mitigation measures themselves may have significant impacts, including contaminating drinking water and even causing the dam to fail. Ocean View pointed to reports by two engineering consultants to the district that raised the possibility of drinking water contamination and dam failure, and that recommended design changes which the district apparently accepted. But the mitigated negative declaration did not mention either potential impact. In a very straightforward opinion, Presiding Justice Arthur Gilbert said that the water district erred. "The district argues that changes in the project design have mitigated to insignificance the potential for contamination and dam failure. That may be true, but the argument misses the point of environmental review," Gilbert wrote. "Environmental review derives its vitality from public participation. That is what is missing here. The public was never informed of the significant impacts discussed by the district’s consultants. Those impacts were omitted entirely from the review process. "The district argues that design changes should not require environmental review. That argument also misses the point," Gilbert continued. "Mitigation measures stated in a MND need not specify precise details of design. Having recognized a significant environmental impact and having determined that mitigation measures may reduce the impact to insignificance, the MND may leave the details to engineers. In such a context, the design may change many times without requiring further environmental review. Here, however, the MND fails even to recognize the problem. Nothing in the MND requires any measures to mitigate contamination or dam failure." The court then turned to the issue of aesthetic impacts and what constitutes substantial evidence of an aesthetic impact. The court described the reservoir as a "very large swimming pool trying to pass as a lake" and as a striking visual feature. The view of the lake from private property would be lost, but, because of additional landscaping, the roof would be obscured from all homes except two. People on public trails would also be able to see the roof. Ocean View property owners expressed concern about the aesthetics, and Santa Barbara County requested "appropriate mitigation measures" if the roof could be seen from surrounding homes or recreational trails. The district argued that the loss of private views is not significant under CEQA — an argument the court flatly rejected. The number of private views affected might figure into significance of the impact, according to the court, but in this case the view from public trails also is impacted. The district then argued that homeowners’ and the county’s "expressions of concern, questions and objections" do not constitute substantial evidence for CEQA purposes. But the court said those were enough. "Consideration of the overall aesthetic impact of the cover by its very nature is subjective," Gilbert wrote. "Opinions that the cover will not be aesthetically pleasing is not the special purview of experts. Personal observations on these nontechnical issues can constitute substantial evidence. … If it were merely the matter of expressions of concern by one or two people, we might agree that there is no substantial evidence of a negative impact. But here the county urged the district to adopt mitigation measures if the cover can be seen from public or private view areas." Thus, the court concluded, there was substantial evidence to support a fair argument that the project could have a negative aesthetic impact, and the mitigated negative declaration was not adequate. The Case: , No. B162920, 04 C.D.O.S. 1842, 2004 DJDAR 2738. Filed March 2, 2004. The Lawyers: For the association: Herb Fox, (805) 899-4777. For the district: David K. Hughes, Price, Postel & Parma, (805) 962-0011.

Owners of the San Remo Hotel in San Francisco have lost the latest round in their 11-year litigation over the city’s ordinance restricting the conversion of residential hotels to tourist use. In the latest decision, the Ninth U.S. Circuit Court of Appeals declined to rule on the hotel owners’ takings claims because the state Supreme Court had already decided the claims. Because the state court had ruled, the Ninth Circuit panel said it was precluded from revisiting the same questions. "The facial and as-applied takings challenges raised in state court are identical to the federal claims asserted by the plaintiffs, and are based on the same factual allegations," Judge Michael Daly Hawkins wrote for the Ninth Circuit. "The California Supreme Court decision was a final judgment on the merits." Attorneys for the San Remo said they would ask the U.S. Supreme Court to accept the case. They believe the high court could take the case because there is a split amongst the circuit courts on "issue preclusion." Last year, the Second U.S. Circuit Court of Appeals decided to "part ways with most of our sister circuits" and, in a case similar to the San Remo litigation, ruled that the federal court should consider the property owner’s claims even though the state court had ruled on them. That case is , 342 F3d 118. The Ninth Circuit declined to follow the decision and instead relied on U.S. Supreme Court and Ninth Circuit precedents. The controversy over San Francisco’s regulation of residential hotels started during the late 1970s, when a shortage of affordable housing became acute. In 1981, the city adopted a hotel conversion ordinance (HCO) — which the city amended in 1990 — that prohibited the conversion of residential units to tourist use unless hotel owners replaced the converted units with new affordable housing or paid a mitigation fee. When the ordinance first took effect, the San Remo was classified as a 62-unit residential hotel based on a survey of the hotel operator. The hotel owners, Thomas and Robert Field, later disputed that classification, saying they always provided a majority of rooms to tourists. City officials stuck with the residential classification and said the Field brothers would have to pay $567,000 — equal to $9,000 per room, or 40% of replacement costs — to convert the hotel to tourist use. The owners eventually paid the fee in protest but they also filed a lawsuit in federal court alleging that the law itself and the city’s application of the law amounted to a taking of private property. The Ninth Circuit eventually kicked the case to state court. That decision became known as . , (9th Cir. 1998) 145 F3d 1095; see , July 1998. On the state court side, the trial court ruled for the city before a state appellate court said the lower court used the wrong criteria. In what became , the state Supreme Court then ruled 4-3 for the city. , 27 Cal.4th 643 (2002); see , April 2002, October 2000. The big issue in was whether to extend the "heightened scrutiny" requirement of the and line of cases to San Francisco’s hotel conversion ordinance. The state Supreme Court ruled that heightened scrutiny — which requires a close relationship between the exaction and the project’s impact — did not apply to laws of general applicability, such as the HCO. After the state Supreme Court ruling, the San Remo owners returned to federal court. District Court judge D. Lowell Jensen ruled against the hotel owners for a variety of reasons. The property owners appealed and a unanimous three-judge panel of the Ninth Circuit upheld the lower court. The hotel owners argued that the doctrine of issue preclusion did not apply because they were forced into state court. Under , 473 U.S. 172 (1985), property owners must seek compensation for takings in state court before proceeding in federal court (see , February 2004). Additionally, in San Remo I, the Ninth Circuit granted the hotel owners’ request for a " abstention," based on the 1941 case that requires a plaintiff to obtain a definitive ruling in state court before returning to federal court. , 312 U.S. 496. And the hotel owners said they had reserved their federal claims. But the Ninth Circuit ruled that the reason the hotel owners were in state court did not matter. Judge Hawkins cited , 136 F.3d 1219 (9th Cir. 1998): "There is, in short, no reason to believe that Congress intended to provide a person claiming a federal right an unrestricted opportunity to relitigate an issue already decided in state court simply because the issue arose in a state proceeding in which he would rather not have been engaged at all." Instead, what mattered to the Ninth Circuit was whether the state Supreme Court answered the same questions that the hotel owners were raising in federal court. Hawkins noted the state Supreme Court said it was construing the state and federal constitutional takings provisions congruently. Moreover, the state Supreme Court’s analysis and decision not to apply heightened scrutiny was "equivalent to the approach taken in this circuit," Hawkins wrote. Instead, the state Supreme Court used the "reasonable relationship" test, which is the same one the Ninth Circuit would use. Thus, the court concluded, " ederal takings claims are barred from litigation under the doctrine of issue preclusion." The Case: , No. 0315853, 04 C.D.O.S. 3231, 2004 DJDAR 4585. Filed April 14, 2004. The Lawyers: For San Remo: Paul Utrecht, (415) 956-8100. For San Francisco: Andrew William Schwartz, City Attorney’s office, (415) 554-4620.

A state appellate court has refused to block the City of San Francisco’s plan to lease former state highway property to a nonprofit agency for development of an affordable housing project. A First District Court of Appeals, Division Four, panel voted 2-1 to uphold a lower court’s ruling against project opponents, who contended the city plan violated state law that limited the use of the property. In 1989, the Loma Prieta earthquake damaged the Embarcadero Freeway (Route 480), forcing the highway’s closure. Two years later, the state Legislature approved a bill that became Streets and Highways Code §72. It obligated Caltrans to demolish the damaged freeway, transfer the right-of-way to the city and jointly agree with the city on a new system of ramps and streets that would provide motorists with comparable access (see , May 1997; , February 1991). In exchange, the city was obligated to use the right-of-way — or the proceeds from sales of the right-of-way — for an alternate street system. In the years that followed, Caltrans gave the right-of-way to the city, and the city, state and federal governments developed a plan for a replacement street system known as the Mid-Embarcadero roadway project. In January 1999, the Board of Supervisors adopted a resolution "approving in principle" the disposition of three parcels of the former right-of-way. The city designated one of those parcels for affordable housing development, with proceeds from the lease or sale contributing to the required streets. The city then began negotiating with Chinatown CDC, a nonprofit housing and community development corporation. In late 2002, the city approved a $10.1 million loan for development of the project, and Chinatown CDC soon signed an agreement to lease the property for 99 years for $10,000 per month, an amount that the city acknowledged was below market rate. A group called Citizens for Better Streets filed a lawsuit attempting the block the project. The group contended that the fair market value of the property was more than $9 million and that the fair lease rate for a 50-year lease (the length originally proposed) was more than $700,000 annually. The group contended the city’s plan was a waste of property and money, and was not allowed by §72. The city responded that the road project was essentially completed, in part with funds from the below-market lease. In March 2003, San Francisco Superior Court Judge Paul Alvarado declined to issue the preliminary injunction sought by Citizens for Better Streets. Judge Alvarado found that the group was unlikely to prevail in the suit because the city had complied with §72. Citizens for Better Streets appealed, and the First District upheld the lower court’s decision. The key to the case was the interpretation of §72, subdivision (b)(1), which states that the city shall "utilize the Route 480 right-of-way or the proceeds from the sales of that right-of-way for the sole purpose of constructing an alternate system of local streets …" Citizens contended that subdivision required the city either to build replacement streets on the property or sell the property at market value and use the proceeds for road construction. But the First District ruled that the city did comply with the terms of §72. "Nothing in the statute requires a sale at market value, or on any other particular terms," Justice Patricia Sepulveda wrote for the court majority. "The city did not use the parcels as an actual site for the project, but it has adopted a resolution stating that the proceeds from their disposition will be applied to pay for the project. The city’s proposed actions therefore appear to comply with the letter of § 72." Citizens also pointed to Article 19 of the state constitution, which limits the use of properties purchased with gasoline tax revenues. But the court said Citizens provided no evidence that the properties here had been acquired with fuel taxes. In a dissenting opinion, Presiding Justice Laurence Kay, said that the city had complied with neither the spirit nor the letter of the law. "In effect," Kay wrote, "the majority reads into the section <§72> the right of the city to make a gift of the land to a developer for a purpose which, praiseworthy or not, is stunningly different from that purpose for which the land was conveyed to the city." Kay also cited a 1993 report jointly prepared by seven city agencies that determined using the right-of-way for low-cost housing would "clearly conflict with the basic purpose of the land transfer." That conclusion was correct, Kay wrote. Even though project opponents lost the case, their attorney Andrew Zacks asked that the opinion be published. Having the opinion published slightly increases the chances that the state Supreme Court will accept the case, said Zacks, who has filed an appeal based largely on the dissenting opinion. The Case: , No. A102773, 04 C.D.O.S. 2596, 2004 DJDAR 3755. Filed February 26, 2004. Ordered published March 25, 2004. The Lawyers: For Citizens: Andrew Mayer Zacks, (415) 956-8100. For the city: Andrew William Schwartz, city attorney’s office, (415) 554-4620.

A San Diego County resident has lost a lawsuit that sought to force a developer to improve a private road that serves a new subdivision. The resident argued that under the Subdivision Map Act, San Diego County had to enforce its own laws that carry out the Map Act, including a code section addressing off-site road standards. But the Fourth District Court of Appeal ruled that the county had the authority to approve an exemption from those standards and had expressly exempted the subdivision. In 1995, a developer sought approval of a tentative map for a 28-lot subdivision on 127 acres in the unincorporated northern San Diego County community of Bonsall. A private road, Via Maria Elena, provides access to the site. A neighboring property owner, Garner Anthony, contended that the developer should widen the private road and improve a bridge. But in November 1995, the county’s Planning and Environmental Review Board approved the tentative map without Anthony’s requested road improvements because the public works director had determined the road was satisfactory and because the proposed improvements were prohibitive due to excessive amounts of cut and fill that would be needed. Anthony appealed the decision to the Planning Commission, arguing that Via Maria Elena was substandard, narrow and meandering, and that under San Diego County Code § 81.402, which concerns standards for private roads serving major subdivisions, the county must require the road to be improved to county standards for private streets. The Planning Commission denied the appeal, and no further appeal to the Board of Supervisors was filed. Barratt American, Inc., acquired the project and sought approval of a final map. In January 2001, the Board of Supervisors approved the final map and a subdivision approval agreement, which was required to ensure Barratt completed all tentative map requirements. The subdivision approval agreement did not include improvements to Via Maria Elena. Thirteen months later, Anthony sued the county and Barratt. San Diego County Superior Court Judge Lisa Guy-Schall ruled for Anthony and ordered Via Maria Elena to be improved to county standards for private streets. The county and Barratt appealed, and a unanimous three-judge panel of the Fourth District, Division One, overturned the lower court. The appellate court first addressed the county and Barratt’s contention that Anthony could not pursue the lawsuit because he had filed it after the Subdivision Map Act’s 90-day statute of limitations and because he had failed to exhaust his administrative remedies with the Board of Supervisors. The Fourth District agreed but went on to consider the merits of the case anyway. The court did so because Anthony argued that his suit was not an attack on the project maps but was instead based on contract interpretation. Anthony contended that the Subdivision Map Act incorporated local code, such as § 81.402, into the requirements imposed at the tentative map stage. The county could not waive the requirement at the tentative map stage, and the Board of Supervisors should have rejected the final map for failing to comply with the county code, he argued. The county and Barratt countered that the county could waive the conditions of § 81.402 when it was impossible or impracticable for a subdivider to comply — and that the county had expressly waived the requirement when it approved the tentative map. The court agreed with the county and Barratt. "Read in context of the entire regulatory scheme (including Government Code § 66474.1), San Diego County Code § 81.402 does not create or support a mandatory duty to require the Via Maria Elena offsite road improvements, when a decision was made otherwise, through the proper channels. Accordingly, we must reject Anthony’s theory that the tentative map approval must be deemed to have included an implied condition of fulfillment of all existing separately imposed requirements of the San Diego County Code," Justice Richard Huffman wrote for the court. " e cannot disregard the discretion conferred upon the county director of public works to make exceptions to the application of county standards." Anthony argued that under Subdivision Map Act, the subdivision improvement agreement required compliance with local ordinances, including § 81.402. The county had an ongoing duty to comply with its own rules and regulations, including at the time of final map approval, he contended. But the court concluded that Anthony’s inference did not apply. "We conclude the language of the subdivision improvement agreement does not support an interpretation that the parties intended to contravene the prior findings of the director of public works, as approved by the Planning Commission, that the Via Maria Elena offsite road improvements were not required to be accomplished by Barratt," Huffman wrote. Moreover, the court held, the Board of Supervisors under the Subdivision Map Act could not add conditions to the final map that did not exist at the tentative map stage. " pproval of the final map by the board is a ministerial duty, if all the tentative map conditions have been met," Huffman noted. "Anthony has failed to show that the requested offsite road improvements to Via Maria Elena were imposed expressly or impliedly as tentative or final map conditions of approval. The contrary is true." The contractual and statutory rights to road improvements that Anthony sought did not exist, the court held. The Case: , No. D041676, 04 C.D.O.S. 1950, 2004 DJDAR 2865. Filed March 4, 2004. The Lawyers: For Anthony: Arthur Wilcox, Feldhake, August and Roquemore, (619) 696-8788. For the county: C. Ellen Pilsecker, county counsel’s office, (619) 531-6229. For Barratt American: Jeffrey Chine, Luce, Forward, Hamilton & Scripps, (619) 236-1414.

The bankruptcy of Pacific Gas & Electric Company has resulted in a stunning windfall for the state. As part of a bankruptcy settlement approved in April, PG&E agreed to offer conservation easements or title to 140,000 acres of land, most of which lies around the utility company’s hydroelectric system. The settlement creates a new Pacific Forest and Watershed Land Stewardship Council to oversee the lands, which cover about 980 parcels in 21 counties from Shasta County in the north to Kern County in the south. Additionally, PG&E must provide $100 million — $50 million for river restoration, reforestation and recreational improvements, $30 million for urban youth programs, and $20 million for planning. The board of the stewardship council is to be composed of state agency representatives, and appointees from interest groups as varied as the Association of California Water Agencies and the Trust for Public Land. The board is supposed to "make each decision by consensus." The Public Utilities Commission will maintain some level of oversight. The first meeting of the stewardship council was scheduled for April 29 in San Francisco. The settlement charges the council with writing a "land conservation plan" that preserves or enhances "beneficial public values." Among other things, the plan is supposed to figure out how to provide revenue to counties so that land transactions are "tax neutral" for each county. Under the settlement, PG&E and other holders of water rights will maintain those rights. Also, PG&E gets to keep its hydroelectric facilities. PG&E assembled its land holdings and system of dams beginning in the 19th century. Most of the lands are in the Sierra Nevada, with concentrations along the Pit, Feather, Yuba, American, Mokelumne and Stanislaus rivers. Over the decades, the reservoirs and adjacent forest lands became popular with boaters, anglers, campers, and hikers. Some PG&E lands also have provided grazing and timber harvesting opportunities. Many of the PG&E properties abut public lands, and the boundaries are often obscure. Prior to filing bankruptcy in April 2001 — a move that followed the energy mess wrought by deregulation — PG&E sought permission from the PUC to auction its lands (see , January 2001). That proposal drew protests from numerous federal and state agencies, environmentalists and outdoors groups. They feared the properties could get chopped up and developed, harming habitat and water quality, and bringing urban development to remote areas. A 4,100-page environmental impact report prepared by the PUC identified many potential negative consequences of the auction. The proposed auction apparently found no favor in the bankruptcy court. Instead, disposition of the lands became part of the overall settlement, which became final in April. Although not exactly a "gift" of land, PG&E’s land conservation commitment appears to be one of the largest transactions of its type in U.S. history. Backers have compared it to the creation of a new national park or monument.

For the first time, the Southern California Association of Governments (SCAG) has included new land use policies in its regional transportation plan. Essentially, the plan calls for infill and redevelopment in urban areas, and compact growth in outlying areas. That type of development pattern would, at least in theory, let more people work close to their job sites, and increase the convenience of public transportation and carpooling. Previous attempts to mesh land use planning with transportation planning have hit practical and political hurdles. For the 2004 update of the regional transportation plan (RTP), which must be updated every three years, SCAG planners had little choice but to consider land use. If planners based the RTP on current growth trends, as SCAG has in the past, the metropolitan region would fall out of compliance with federal air quality mandates, explained Mark Butala, SCAG senior regional planner. So SCAG turned to its regional growth visioning project, known as COMPASS. (The visioning document is scheduled for adoption by the SCAG board early this month.) Planners combined the growth trends with the principles that were developed as part of the COMPASS project to determine the projections for the transportation plan. The agency then put forward “bookend” scenarios. One called for a significant intensification of development in already urbanized areas. The other alternative spread out growth to the fringe, with major urban development in the Antelope Valley, the Coachella Valley and San Bernardino’s high desert. Those two scenarios got people’s attention, said Bev Perry, a Brea City Council member who recently completed a year as SCAG president. The resulting “vision” was a hybrid that calls for infill development on underutilized sites, focusing growth along transit corridors and nodes, adding density to certain transportation corridors, building housing near job centers, providing a variety of housing and preserving open space. “The bottom line is this: For a 2% change in land use, we get enormous benefits on the transportation and air quality side,” Perry said. “We’re not getting the congestion relief that we need, and we’re not getting it because of the land use factor,” Perry continued. “We never looked at land use before. It’s like the stars aligned this time.” The RTP — which calls for no less than $213 billion in road, rail, port and airport improvements by 2030 — was adopted in early April. Of course, SCAG has no land use authority. So getting even a 2% change will require cooperation from the region’s 187 cities and 6 counties. During the planning process, SCAG attempted to start lining up local support. SCAG planners rolled out the vision to all 14 subregions and negotiated with city officials while pouring over fairly small-scale maps. Those sessions produced a great deal of useful feedback, Butala said. “In almost every case, we were able to accommodate the changes requested by the locals,” said Butala, who recognizes that the road is still paved with political pitfalls. “We were very concerned with local control … but we’ve gotten a lot of support for this. People are starting to see the need to look beyond their city limits.” It is a significant development that SCAG has included land use in the RTP, said Jeffrey Lambert, a former City of Santa Clarita planning director who is now working as a private consultant. But SCAG has been criticized in the past for being too academic, and not pragmatic enough, noted Lambert, who has participated in the RTP and COMPASS efforts as a representative of California Chapter of the American Planning Association (CCAPA) and the Urban Land Institute (ULI). “What’s been missing in the past is some partnership beyond SCAG’s elected officials. They don’t think seven years down the line. They aren’t in office that long,” said Lambert. That’s where entities such as CCAPA and ULI may help. Planners and developers who support the concepts that SCAG is pushing “need to turn it into reality, really fast. We need a good example right away or the plan will be forgotten, like so many others,” he said. “I think there’s enough momentum to ensure that happens.” Still, getting city councils to modify general plans and approve potentially unpopular projects can be difficult, Lambert noted. On-the-ground examples and political leadership can help convinced reluctant council members, he said. Exactly what will be required of the cities is unclear. SCAG planners intend to concentrate on implementation during the 2004-05 fiscal year, Butala said. The level of changes to local land use plans and practices that are needed to comply with the RTP depends on individual situations, Perry said. The RTP assumes that existing growth patterns will remain in effect until 2010, at which time modest changes would begin to take effect. Some cities are already on the right track, Perry said. While the land use-transportation connection in the RTP is a first for SCAG, other regional entities are also trying to forge the same link. For example, the San Diego Association of Governments has adopted a Regional Comprehensive Plan that ties transportation funding to “smart growth” (see , April 2004). The Metropolitan Transportation Commission in the Bay Area has a Livable Communities and Housing Incentive Program that provides financial incentives for pedestrian- and transit-oriented development. And, maybe most importantly, during recent speaking engagements Business Housing and Transportation Secretary Sunne Wright McPeak has been touting the need for development that makes better use of existing transportation infrastructure. Contacts: Bev Perry, City of Brea, (714) 990-7718. Jeffrey Lambert, Lambert Consulting, (661) 313-0467. Mark Butala, Southern California Association of Governments, (213) 236-1945. SCAG website: www.scag.ca.gov

The philosopher Heraclitus once remarked that a wise man and a fool may look at the same tree and see different things. The observation also pertains to a reasonable person and a developer. A reasonable person, for example, would look at the Union-Pacific rail yard in downtown Sacramento and see 240 acres of dirt laced with a century of poisonous industrial byproducts. A developer looks at the same thing and sees a pedestrian-oriented urban district containing more than 4,500 units of housing and a shopping street, all oriented around a regional transportation terminal for trains and buses. The developer’s agenda is a tall order. To begin with, the Union-Pacific site is a very large brownfield — that is, an abandoned and contaminated urban site. The developer in this case is Millennia Associates, a group that includes Los Angeles architect Jon Jerde. As an architect, Jerde is responsible for such instant-urban environments as Horton Plaza in San Diego, Universal Citywalk in Los Angeles, the Mall of America in Minnesota and the Fremont Street Experience in Las Vegas. As a developer, Jerde last year completed a four-block residential-and-retail project in Salt Lake City. In November, the developers entered talks with Sacramento city officials on an exclusive-right-to-negotiate basis. Millennia and the city are expected to come up with a development plan some time this year. To date, the Millennia Associates plan is still sketchy because the developers want to meet with community groups before finalizing their development plans. The current site plan, therefore, is little more than a land-use map, with a new street grid and different development types identified. Still, the Millennia proposal is remarkable in at least three ways. The first is density: As mentioned above, the developers want to build about 4,500 dwelling units, including single-family homes, townhouses, apartments and condominiums. Essentially, the entire scheme could be described as a large-scale, transit-oriented development, with most of the shopping and transit connections within easy walking distance of housing. The notion of building housing on a contaminated site is notable in itself. In the past, housing and schools required a pristine level of clean up while commercial development was held to a lower standard. Not surprisingly, the typical brownfield project is an industrial or retail use, such as offices and big-box retail centers, but rarely housing. This year, a new rule from the state Department of Toxic Substances Control allows homebuilding on less-than-pristine land, if the developer constructs the housing atop a podium, i.e. the housing is built atop a parking garage. The advantage of podium housing is that it is versatile. The downsides are that landscaping options are severely limited on the hard surface of the podium floor and the streetscape can be uninviting. Ambitiously, the Millennia plan also calls for public parks on terra firma, which will be dug out and replaced with clean fill. The second remarkable part of the design is the proposal for a rehabilitated train depot that will be expanded significantly to include new platforms for both passenger trains and local commuter rail, as well as buses. Preservationists waged a battle with transit boosters, who wanted to demolish the old train station in favor of a modern, multi-modal facility. The current plan tries to accomplish a happy compromise by making the historic building the centerpiece of a much-expanded transportation center. Among the many things that are on the table are ways to finance a $160 million expansion of the historic train depot on the site. Recently, the same parties have been discussing the feasibility of moving the old rail station 400 feet(!), presumably to make it easier to build the new facilities. I predict that the cost of this adventure, as yet unknown, together with likely damage to the building will cause this brainstorm to lose its thunder. Architecturally, the most ambitious part of the plan would be to make Fifth Street into a elevated bridge that flies over the train tracks, while serving as a shopping street. (The developer likens this idea to the Ponte Vecchio, the bridge in Florence, Italy, that spans the Arno River and is lined with shops on either side.) The concept of a shopping bridge is vintage Jerde, a man with a bold imagination and long experience with retail design. If the idea were proposed by anyone other than Jerde, in fact, I would be more skeptical. But Jerde has the panache to carry off the design. Still, it is strange kind of urbanism. Another big plan for the Union Pacific site is to build a new basketball arena for the Kings. (Although this is not part of the Millennia proposal, the developers say they could accommodate the arena, if necessary, although it would take away about 20% of the housing.) Without more detailed plans, it is impossible for me to say much about the arena plan, which has been the source of much controversy in Sacramento. Of course, the success of downtown sports stadiums in Baltimore, Denver and other cities has made this idea fashionable. But very large buildings like arenas and stadiums do not harmonize easily with the kind of low-rise neighborhood envisioned by Millennia. On the other hand, the presence of the transit hub would be a strong rationale for locating the arena in the old train yards. As ambitious as plans are for the Union Pacific site, they seem almost small compared with an even larger proposal to the immediate north: The creation an 800-acre park, or something just slightly smaller than Central Park, in the delta where the American and Sacramento rivers meet. Some people claim that housing densities would have to triple in the Union Pacific site to accomplish both the city’s residential goals and the park. But a magnificent park near the water would be a worthwhile amenity for a city that could use the open space. Fools like me find it difficult to envision anything other than real estate on the northern edge of downtown Sacramento. Maybe there are enough wise men in the city who can envision something more.

With fewer than five months remaining in the 2003-04 session of the state Legislature, it appears that state lawmakers will approve few, if any, major land use bills. Still, there are scores of land use bills alive that nibble or even take big bites on the edges. With home prices continuing to reach new peaks despite an economic malaise, affordable housing remains a hot topic in the Capitol, and a number of bills favored by the building and real estate industries and by housing advocates are pending. Local government opposes most of those bills. Also alive is legislation addressing redevelopment, the California Environmental Quality Act and other land use matters. Exactly how much legislation will reach Gov. Arnold Schwarzenegger’s desk — and whether the governor will sign the bills — is unclear. The administration has several members with "smart growth" credentials, including Business, Transportation and Housing Secretary Sunne Wright McPeak, Resources Agency Secretary Mike Chrisman and California Environmental Protection Agency Secretary Terry Tamminen. However, the administration so far has focused on budget issues and has not pushed a land use agenda. The budget is also the top priority for many lawmakers. A housing element working group sanctioned by the Department of Housing and Community Development (HCD) has reached agreement on some secondary issues, such as council of governments’ methods for determining housing fair shares and by-right housing development. But the group, which includes representatives of all the usual interest groups, has not reached consensus on the big issues of state enforcement and self-certification of housing elements by cities and counties. Whatever the working group finally decides will likely appear in AB 2158 (Lowenthal). Housing advocates say that Assembly Speaker Fabian Nunez (D-Los Angeles), although a freshman with a limited voting record, appears to be interested in their issue. The speaker, who lives in downtown Los Angeles, is carrying some tenant legislation but no land use bills. One of the bills most closely watched by cities and counties is AB 2702 (Steinberg), which would limit the ability of local government to regulate second units. The bill does not contain all of the measures that were in last year’s unsuccessful AB 1160 (see , April 2003). But AB 2702 would require cities and counties to allow second units in all residential zones, prohibit the establishment of minimum or maximum second-unit sizes of less than 600 square feet, and prohibit "unreasonable" development standards. League of California Cities lobbyist Dan Carrigg said nondiscretionary approval of second units already exists under legislation approved two years ago. Under AB 2702, "the state would be writing the zoning ordinance for every community in the state," Carrigg said. "I don’t know why we keep doing this," Carrigg said of second-unit legislation. "Taking the public out of the process does not make the controversy go away." But Marc Brown of the California Rural Legal Assistance Foundation, which is sponsoring the bill along with the California Association of Realtors, called AB 2702 a "good, substantive" bill that addresses some local governments’ unwillingness to approve second units. The bill would still allow cities and counties to cap unit size, require the occupants of one unit to be a property owner and establish parking standards, Brown said. The bill also sets standards for housing being developed jointly with a school. One bill that generated tremendous controversy last year, SB 744, remains alive this year. The bill would establish a board within HCD to hear appeals from affordable housing developers whose projects have been denied or conditioned by a city or county. Although the bill has not been amended in nearly a year, the author, Sen. Joe Dunn (D-Santa Ana), has accepted a great deal of input on the legislation and is expected to introduce changes. While local governments generally oppose SB 744, some locals are getting behind SB 2980 (Salinas), which would allow a city or county to self-certify its housing element if the locality met housing production and other criteria. Another bill being co-sponsored by affordable housing advocates is SB 1818 (Ducheny), which would change the density bonus law. Currently, a housing development that includes at least 20% "affordable" units qualifies for a 25% density bonus. Senate Bill 1818 would create a sliding formula guaranteeing density bonuses of 12.5% to 40%. The bill also would give a developer a 15% to 40% density bonus if the developer donated a certain amount of land to a city or county for construction of affordable units. The bill is scheduled for its first committee hearing this month. A different bill by Sen. Denise Ducheny (D-San Diego), SB 558, is being sponsored by the California Building Industry Association (CBIA). It would require a city or county to zone enough land to accommodate 20 years of housing development. The bill is intended to drive the housing element, which has only a five- or six-year timeframe, said Tim Coyle, CBIA vice president. Major projects take a decade to break ground, so it only makes sense to require a 20-year supply, Coyle said. However, local governments would apparently get to determine what constitutes a 20-year supply under the legislation. The bill has already passed the Senate. Another CBIA bill back for a second year that also has passed the Senate is SB 493 (Cedillo), which attempts to encourage brownfield development by having state regulations mirror federal rules. Chiefly, the bill would grant legal immunity to "innocent landowners," "bona fide prospective purchasers" and contiguous property owners who had nothing to do with contamination of a site. The lengthy bill would end the state’s current system, in which anyone who is or has been owner of a contaminated property may be held liable for cleanup whether or not they had anything to do with the pollution — a system that bill proponents say discourages brownfield redevelopment. The bill has the support of developers, the California Redevelopment Association and several environmental justice groups. Environmental organizations are divided on SB 493 while trial lawyers oppose it. In the world of redevelopment, several pieces of legislation concern only specific jurisdictions, such as AB 1358 (Simitian), which would let cities of less than 100,000 people in San Mateo, Santa Clara and Santa Cruz counties spend housing set-aside funds within 5 miles of a project area. Although not directly related to capital-R redevelopment, one of the most significant pieces of redevelopment legislation is SB 1592 (Torlakson). The bill would require cities and counties to adopt infill ordinances or specific plans, identify potential infill development sites and offer at least five incentives for infill housing development. Senate Bill 1592 is scheduled to receive its first hearing this month. California Environmental Quality Act (CEQA) legislation appears to be light this year. Last year’s hot-button but unsuccessful CEQA bill, AB 406 (Jackson), is back this year and has passed the Assembly. The bill initially sought to prohibit cities and counties from allowing developers to hire their own CEQA consultants, a practice used by more than 100 cities and counties. That part of the bill has been deleted and the bill now prohibits developers from enforcing confidentiality agreements with their consultants. The bill also requires landowners to provide site access to local government officials and their consultants. As currently written, Assembly Bill 2251 (Lowenthal) allows greater use of master environmental impact reports for complying with CEQA’s cumulative impact analysis requirements. The bill, however, could be re-written to contain recommendations from a CEQA task force organized by the League of California Cities. Because of the state budget deficit, few pieces of legislation attempt to create new programs or allocate money in new ways. Major Land Use Legislation Proposed For 2004 • AB 389 (Montanez). Makes a number of changes to state law with the intent of expediting reuse of brownfields. Among other things, the bill defines a brownfield as urban or suburban land or buildings that have not been developed or redeveloped because of contamination or perceived contamination. The bill also requires Cal EPA to formalize procedures for public agencies to enter into agreements with prospective brownfield purchasers. • AB 2652 (Bates). Requires a utility company seeking Public Utility Commission approval for more electricity to consider restarting an existing facility or building a new power plant on a brownfield. • SB 493 (Cedillo). Provides cleanup liability immunity for innocent landowners, prospective purchasers and neighboring property owners. • SB 559 (Ortiz). Requires the Department of Toxic Substances Control to take a number of steps to encourage and speed the cleanup of brownfields. • SB 805 (Escutia). A "spot bill" that is likely to be amended to contain measures intended to speed brownfields reuse. • AB 2251 (Lowenthal). Allows broader use of master EIRs to meet CEQA’s mandate for studying cumulative impacts. The bill could be amended to include recommendations from a League of California Cities task force. • AB 2292 (Laird). Requires the Resources Agency to report on the types and effectiveness of mitigation measures used by state and local agencies. This bill could be amended to provide CEQA exemptions for certain infill development projects. • AB 3034 (Calderon). Encourages the use of master EIRs for potential biotechnology manufacturing sites. • SB 707 (Florez). Prohibits approval of dairies with at least 700 cows within 3 miles of a city or school if the dairy would have an adverse impact on the city or school. The bill also prohibits the use of negative declarations for these projects. • SB 711 and SB 1334 (Kuehl). Both bills subject to CEQA review any activity that converts an oak woodland to another use. SB 711 also applies to timberlands. • SB 1486 (Hollingsworth). Exempts from CEQA construction of any overpass proposed within an easement or right-of-way controlled by Caltrans, a local transportation agency, a city or a county. • AB 1426 (Steinberg) and AB 2882 (Cox). Competing measures that attempt to encourage affordable housing development in the Sacramento region. • AB 1970 (Harman). Allows cities of less than 25,000 people in the coastal zone that meet certain conditions to adopt a housing element that provides for no new housing units. • AB 2348 (Mullin). Allows a city or county to reduce its share of regional housing needs by 15% if the city or county has met at least 30% of its need and has met 30% more of its need than the region as a whole. • AB 2702 (Steinberg). Requires a city or county to permit second units in all residentially zoned areas. The bill also limits the conditions local governments may place on second-unit development. • AB 2836 (Maddox). Changes the definition of "moderate income" from households making up to 120% of median to 140% of median in "tight" housing markets and 200% of median in "severely tight" markets. • AB 2980 (Salinas). Allows a city or county to self-certify its housing element if certain conditions are met, including production of at least 15% of the jurisdiction’s share of units for low- and very low-income households. • SB 558 (Ducheny). Requires cities and counties to designate land for 20 years worth of housing development. • SB 744 (Dunn). Creates an appeals board within HCD to hear appeals from affordable housing developers whose projects have been rejected or conditioned by a city or county. • SB 1595 (Ducheny). Places a housing bond on the state ballot. • SB 1818 (Ducheny). Establishes a new, sliding scale for density bonuses based on the number and type of affordable units proposed, with a maximum 40% bonus. The bill also provides bonuses of up to 40% if a developer donates land for affordable housing purposes. • AB 269 (Mullin). Allows redevelopment agencies in San Mateo County to spend housing set-aside money outside the redevelopment project area. • AB 1358 (Simitian). Authorizes cities of less than 100,000 people in San Mateo, Santa Clara and Santa Cruz counties to spend housing set-aside funds within 5 miles of a project area. • AB 2212 (Runner). Exempts land in the Chino dairy preserve from the requirement that land in a redevelopment project area be "predominately urbanized." • SB 360 (Romero). Extends an exemption from prevailing wage requirements deadline for certain housing projects. • SB 1592 (Torlakson). Requires cities and counties to adopt an infill ordinance, identify potential infill development sites and provide at least five incentives for infill housing projects. • AB 304 (Nation). Requires the DMV to add $6 per year to all vehicle registrations in the nine-county Bay Area to pay for stormwater cleanup. • AB 392 (Montanez). Makes permanent a Caltrans program that awards environmental justice grants of up to $300,000 to local agencies and community groups. Money would come from the State Highway Fund. • AB 1546 (Simitian). Authorizes the San Mateo County Association of Governments to levy a $4 per year fee on vehicle registration to pay for management of traffic congestion and stormwater pollution. • AB 3011 (Laird). Authorizes the Santa Clara Valley Transportation Authority to levy an annual fee of up to $4 on vehicle registrations to fund traffic congestion management. • AB 496 (Correa). Creates the Santa Ana River Conservancy and authorizes the agency to acquire and manage properties within half a mile of the river. • AB 1788 (Leslie). Establishes the Sierra Nevada Conservancy, which could acquire and manage land in the mountain range. • AB 2097 (Oropeza). Extends for one year the Natural Heritage Preservation Tax Credit, which was suspended during the 2002-03 fiscal year. The bill provides tax credits to landowners who donate open space or agricultural land. • AB 2298 (Plescia). Requires all public water systems with at least 3,000 connections to install water meters. • AB 2631 (Wolk). Creates the Invasive Species Council that would identify, classify and work to control invasive and non-native species. • SB 898 (Burton). Originally a bill that prohibited the rezoning of most farmland unless certain findings could be made, the measure is a now a "spot bill" addressing the viability of agricultural lands. • SB 1052 (Budget and Fiscal Review Committee). Eliminates the Natural Heritage Preservation Tax Credit program. • SB 1447 (Kuehl). Requires the state to regulate the dredging or filling of any wetland, stream or pond not regulated under the federal Clean Water Act. • SB 1477 (Sher). Requires anyone proposing a project that impacts a wetlands to file a waste discharge report with the appropriate Regional Water Quality Control Board. The bill also contains a number of measures intended to protect and encourage restoration of wetlands. • SB 1607 (Machado). Prohibits local agency formation commissions from approving the extension of municipal services to land within the Sacramento-San Joaquin Delta protection zone. • SB 1820 (Machado). Prohibits a city that annexes land covered by a Williamson Act contract from canceling the contact. • ACA 14 (Steinberg)and SCA 11 (Alarcon). Both constitutional amendments would reduce the threshold for voter approval of special taxes and bonds for most infrastructure projects from two-thirds to 55%. • AB 1320 (Dutra). Makes it easier for a city or county to designate a transit village development district (which permits density bonuses) and allows creation of such a district around a bus hub, not only a rail station. • SB 926 (Knight). Moves the California Main Street Program from the now-defunct Technology, Trade and Commerce Agency to the Office of Historic Preservation. The bill also hands military base retention efforts and a space industry development program to the Business, Transportation and Housing Agency. • SB 1462 (Kuehl). Establishes the Southern California Military Greenway Commission with the apparent intent of blocking development under military flyways. • SB 1641 (Alarcon). Requires local governments to prepare a business impact report prior to approving a big-box store. Gov. Davis vetoed a similar bill. • SB 1776 (Bowen). Reinstates the Energy Commission’s expedited process for reviewing new power plants.

The City of Morgan Hill’s decision not to rezone the site of a closed hospital to allow for development of a private, Christian college has been upheld by the Ninth Circuit Court of Appeals. The Ninth Circuit ruled that the city did not run afoul of the federal Religious Land Use and Institutionalized Persons Act (RLUIPA), as San Jose Christian College had alleged. But in ruling for the city, the Ninth Circuit did not question the constitutionality of RLUIPA, which limits the government’s ability to regulate religious land uses. Previously, the Ninth Circuit had upheld RLUIPA’s constitutionality as it relates to the rights of prison inmates, but the Ninth Circuit has not previously considered RLUIPA’s constitutionality in a land use context. San Jose Christian College has asked for a rehearing because it disagrees with the court’s assessment of the case’s facts, said Brad Dacus, an attorney for the Pacific Justice Institute, which helped represent the college. Still, Dacus called the Ninth Circuit’s stance on RLUIPA’s constitutionality significant and warned that local governments should ensure that their ordinances comply. "RLUIPA as a matter of law is just as potent as it ever was," Dacus said. "It’s a very, very powerful civil rights statute." But John A. Ramirez, of Rutan & Tucker, who argued the case for the city, contended that Dacus was reading too much into the Ninth Circuit’s opinion because the question of the law’s constitutionality was not specifically before the court. "This opinion is helpful for state and local governments facing this type of litigation because it states quite clearly that RLUIPA is not a magic wand," Ramirez said. "RLUIPA does not provide a free pass … A lot of these people are of the belief that they really don’t have to follow the rules." Without a dissenting vote, Congress passed RLUIPA in 2000, after the U.S. Supreme Court ruled the Religious Freedom Restoration Act unconstitutional in , 521 U.S. 507 (1997). The new law prohibits government regulation that imposes a "substantial burden" on the exercise of religion unless the government proves the restriction is for a "compelling government interest" and it is the least restrictive means of furthering that interest (see , May 2002). Since the law’s passage, there has been a great deal of litigation nationwide. The Morgan Hill situation almost immediately became a test case. In 1999, Catholic Healthcare West (CHW) closed the 60-bed St. Louise Hospital and adjoining medical offices in Morgan Hill. The 30-acre property then went on the market with the restriction that it could not be used for medical purposes, as CHW had moved its operation to nearby Gilroy. The city zoning for the site is "planned unit development," which allows all uses shown on the development plan. But the PUD for the site was directed solely at medical uses. The college filed an application for a zoning amendment so that the college could develop a school for 1,200 students, outdoor sports fields, a gymnasium, a theater/chapel and dormitories. City planners told the college the application was incomplete because it lacked a site plan, building elevations and a landscaping plan. The college responded with a scaled back version of the application, encompassing only the existing buildings and 400 students. At the same time, the college’s marketing material trumpeted the original, larger project — a conflict that concerned planners because the California Environmental Quality Act (CEQA) prohibits piecemealing a project. Ultimately, the Planning Commission rejected the zoning application because it failed to comply with the city’s application requirements. The college then sued the city. District Court Judge Ronald Whyte ruled for the city. The college appealed, and a unanimous three-judge panel of the Ninth Circuit upheld Whyte. Among other things, the college argued that the city’s application of its zoning ordinance and CEQA to the project violated RLUIPA because it posed a substantial burden to the college’s religious exercise. The court rejected the argument. " t appears that College is simply adverse to complying with the PUD ordinance’s requirements," Judge Johnnie Rawlinson wrote for the court. "The city’s ordinance imposes no restriction whatsoever on College’s religious exercise; it merely requires College to submit a complete application, as is required of all applicants. Should College comply with this request, it is not at all apparent that its rezoning application will be denied." Rawlinson continued, " here is no evidence in the record demonstrating that College was precluded from using other sites within the city. Nor is there any evidence that the city would not impose the same requirements on any other entity seeking to build something other than a hospital on the property." Moreover, CEQA "adds nothing to the inconvenience otherwise imposed by the city’s zoning application requirements," Rawlinson said. Being required to delineate the scope of development does not burden one’s free exercise of religion, the court ruled. The court also rejected the College’s arguments that the city violated its rights to freedom of speech and assembly because the college could not convene for education and worship on that specific site. The court held that city’s ordinance and its enforcement of the law were content-neutral. " he fact that the church’s congregation cannot assemble at that precise location does not equate to a denial of assembly altogether," the court ruled. The Case: , No. 02-15693, 04 C.D.O.S. 2029, 2004 DJDAR 2988. Filed March 8, 2004. The Lawyers: For the college: John L. Dodd, (714) 731-5572. For the city: John Ramirez, Rutan & Tucker, (714) 641-5100.

A framework intended to guide all local general plans in San Diego County could be adopted as soon as June by the San Diego Association of Governments (SANDAG). Advocates of the framework say it has the potential to be one of the most effective regional plans ever devised in California. The Regional Comprehensive Plan (RCP) takes a decided turn away from the suburban model of land use planning and instead emphasizes transit, dense development along transit corridors and infill. The plan and SANDAG officials also make clear that the agency — which is also the county’s transportation planning agency — will determine many of its transportation investment decisions in ways that promote this more urban approach to land use. The "2030 vision" of the RCP’s Urban Form chapter starts off by saying, "Our homes are connected to attractive, efficient and well-integrated transit stations." "We have an opportunity to do something really great in this region," said Escondido Mayor Lori Holt Pfeiler, one of the plan’s biggest proponents. The RCP "is asking the cities to do things a little bit smarter." The basis for the plan extends back to 1988, when San Diego County voters approved Proposition C. The measure called for SANDAG to prepare the Regional Growth Management Strategy. The strategy eventually became the Region 2020 Smart Growth Principles, on which the RCP builds further. One of the major differences between the RCP and the earlier growth management strategy — and one of the qualities that gives people hope that the framework plan will actually be implemented — is that the RCP is a bottom-up plan. In addition to past SANDAG planning efforts, local general plans and extensive input from city and county officials and the general public provide the basis for the RCP. The result is a plan that tries to tackle two problems at the top of many people’s list in San Diego County: housing and traffic congestion. Housing prices have reached the point that only one-in-six families can afford the median-prices home, which crossed the $400,000 line for the first time in December 2003, according to the California Association of Realtors. Moreover, SANDAG planners estimate the county will add about 1 million new residents from 2000 to 2030, creating the need for 407,000 additional housing units. Existing city and county general plans, however, provide for only 314,000 new homes. "The reason is that the development planned for our remaining vacant residential land is mostly for single family homes on large lots, instead of the smaller single family homes, condominiums and apartments that are urgently needed," the RCP states. So the housing portion of the plan is heavy on infill, rezoning, rehabilitation, affordable housing development — and incentives to promote those activities. As for congestion, the RCP states flatly, "Our current regional transportation system will not meet the needs of a growing and mobile population." The plan insists that transportation and land use decisions must be better coordinated. The plan presents the concept of "smart growth opportunity areas." These would be areas in and near transit stations, areas of relatively high densities along bus routes, community and city centers, and rural villages in unincorporated areas. The existing Regional Transportation Plan provides $25 million for a "smart growth incentive fund." But it is clear that SANDAG policymakers intended to closely tie most transportation funding decisions to land use, especially to smart growth opportunity areas. These smart growth areas are not one-size-fits-all, which is encouraging to the cities. "Whatever is smart growth for downtown San Diego is not smart growth for downtown Encinitas," said Pat Murphy, Encinitas planning and building director. The smart growth opportunity areas, incentives and related matters remain ill-defined, but there should be more specifics in place by the time the SANDAG board considers the RCP in June, said Carolina Gregor, RCP project manager for SANDAG. Still, the idea is for local officials to identify their own smart growth opportunity areas, she said. The RCP encourages cities to cooperate, said Escondido Mayor Pfeiler. If Escondido works with San Marcos, Vista and Oceanside to facilitate transit and dense development on the transit corridor, those cities increase their chances of receiving transportation funding from SANDAG. "We get cities to collaborate by rewarding good behavior," she said. However, SANDAG has control only over federal transportation dollars and a local half-cent sales tax. If Caltrans and the California Transportation Commission do not along with the RCP, the plan’s effectiveness will be greatly diminished, said Nick Bollman, who heads the California Center for Regional Leadership. But there is reason to hope. Caltrans has provided funding for the RCP effort, and new Business, Transportation and Housing Secretary Sunne Wright McPeak has advocated smart growth and public transit for years. This proposed strategy for spending infrastructure dollars, however, worries San Diego County officials because it could reduce the funding available for road construction in unincorporated areas. The county’s proposed general plan, which has been in process for several years, seeks to accommodate growth in and near existing community centers, much as the RCP would like, but new roads will be needed, said Ivan Holler, San Diego County deputy planning director. Aside from the road-funding concern, the county and SANDAG are taking the same approach. "To a great extent, the two plans propose similar solutions for land use," Holler said, except the county does not use the term "smart growth." Both Pfeiler and Encinitas planner Murphy said their cities would have to make only minor modifications to their general plans to comply with the RCP. Their cities and most of the county’s 16 other cities are lining up behind the RCP. Some of the smaller cities do not feel threatened because they believe that under the RCP, San Diego and Chula Vista — the county’s two largest cities — will handle most of the housing deficit that SANDAG identified. Bollman said SANDAG is farther along with an implementable regional plan than any other council of governments in California. This, he said, is because of good leadership at SANDAG, because some city council members hold regional perspectives, and because the developed region is well-defined by the ocean to the west, Camp Pendleton to the north, rugged mountains to the east, and the Mexican border to the south. Additionally, proposals from former state Sen. Steve Peace for a new form of regional government and the recent expansion of SANDAG authority over transit (see , July 2002) have increased the dialogue about regional approaches, Bollman noted. Contacts: Carolina Gregor, SANDAG, (619) 699-1989. Lori Holt Pfeiler, City of Escondido, (760) 839-4610. Ivan Holler, San Diego County, (858) 694-3789 Pat Murphy, City of Encinitas, (760) 633-2696. Nick Bollman, California Center for Regional Leadership, (415) 445-8975. SANDAG website: www.sandag.org .