WASHINGTON _ Supreme Court justices appeared mired in a swamp of messy issues on February 26 as they heard a Rhode Island landowner's plea for compensation for being blocked from filling 18 acres of Atlantic coastal wetlands. Attorneys for Anthony Palazzolo and the State of Rhode Island disagreed about virtually everything in the closely watched property rights case from the facts of the dispute to the procedural and substantive rules for resolving it. For their part, the justices groped for answers on such basic issues as the exact size of Palazzolo's holding and the possible value of any permitted development on the site. "How do we know?" Justice Stephen G. Breyer asked Palazzolo's lawyer, James S. Burling of the Sacramento-based Pacific Legal Foundation. The justices' uncertain questioning could presage a muddled outcome. That could disappoint property rights advocates, who had hoped for a ruling clarifying landowners' rights for compensation in "regulatory" takings cases. But state and local governments could also be disappointed if the ruling gives any additional room for takings claims. Palazzolo argues that he is being blocked from building up to 74 houses on the 18 acres of wetland, which lie just inland of an oceanfront road in the town of Westerly. He is asking for more than $3.15 million in compensation, the amount he says he could realize by developing all 74 lots. In rejecting his plea, the Rhode Island Supreme Court called the projection "unrealistically optimistic." Along with the wetlands, Palazzolo's holding encompasses a small but not precisely determined amount of "upland" property that includes a road and a developable "turnaround." Rhode Island officials say he could build at least one house on the upland. Palazzolo's lawyers argue one house amounts to "a pittance." The case history is long and complex. Palazzolo, 80 years old and an auto wrecker by trade, bought the property along with two other people in 1959 for $8,000. Under local zoning law, he thought he could develop it for residential or recreational purposes. In 1971, a state agency gave him permission to fill the land with material dredged from adjacent Winnipaug Pond, but the agency revoked the permit shortly thereafter. The closely held corporation Palazzolo formed lapsed in 1978, and title to the property passed to him individually. In the 1980s, he made two further attempts to win approval to fill all or part of the wetlands. The state's Coastal Resource Management Council turned him down in 1983 and again in 1985. Three years later, Palazzolo sued, claiming the state deprived him of all economic use of his land and asking for compensation under the Fifth Amendment's Takings Clause. Procedurally, Palazzolo's case faces a major obstacle: the judicial doctrine of ripeness, which courts use to stay out of cases not yet completely developed. Palazzolo never filed a residential development plan, so Rhode Island officials say there is no way to know whether he might have been allowed to build some houses. Conservative justices, however, were skeptical. "Why do you have to keep coming back?" Justice Antonin Scalia asked Rhode Island Attorney General Sheldon Whitehouse. Eventually, Whitehouse conceded that regulators might be "overbearing" if they forced a property owner to cross too many procedural hurdles. On the merits, the justices struggled with two major issues: first, whether Palazzolo should have known he would not be allowed to fill the wetland when he took title to the property in 1978; and, second, whether he had an "economically viable use" of part of the land even if filling was not permitted. Burling argued coastal landowners had every right to fill wetlands until the new regulatory regime was imposed during the 1970s, while Whitehouse said the state had protected wetlands "since time immemorial." On the value of the land, Whitehouse said Palazzolo had manufactured a takings case by focusing solely "on the portion of the property that is not buildable." Burling countered that some "nonzero value" was not enough to defeat a takings claim. The case attracted more than a dozen friend-of-the-court briefs, with homebuilders, farmers, and property rights groups on Palazzolo's side, and state and local government groups and environmental organizations on Rhode Island's. A decision is due before the court breaks for its summer recess at the end of June. The Case: Palazzolo v. Rhode Island, No. 99-2047 The Attorneys: For Palazzolo: James S. Burling, Pacific Legal Foundation, (916) 362-2833. For Rhode Island: Attorney General Sheldon Whitehouse, (401) 274-4400. Kenneth Jost, formerly editor of the Los Angeles Daily Journal, is staff writer for Congressional Quarterly and author of The Supreme Court Yearbook.

The first update of housing elements in a decade has resulted in something of a standoff between the Southern California Association of Governments and the state Department of Housing and Community Development. Stuck in the middle are Riverside and San Bernardino counties and several inland cities that do not know how many housing units to plan for. After negotiations with SCAG representatives throughout 1999, state officials ordered the regional agency to plan for 504,000 housing units during the 1998-2005 planning cycle. However, last November, SCAG submitted a final Regional Housing Needs Assessment (RHNA) allocating 438,000 housing units to the region's six counties and 184 cities. In December, HCD rejected SCAG's report, saying no justification existed for the reduction. The state adjusted SCAG's RHNA to 503,000 units. State law required SCAG jurisdictions to submit housing elements to HCD by December 31. Nearly a month after the deadline, only about 30 of 190 local governments had completed housing plans. The SCAG-HCD stalemate appears to force 11 local governments, mostly in the Inland Empire, to negotiate directly with the state, as HCD officials say they will reject housing elements that use disapproved SCAG housing targets. The various parties continue to talk, but HCD says its December response was final. Several state lawmakers have met with key players, but the legislators appear unlikely to intercede, at least for now, according to sources at the Capitol. "It's at the stage where it is all quite dicey," said Ty Schuiling, director of planning and programming for the San Bernardino Association of Governments. It will be difficult for HCD to back down. If the state allows SCAG to unilaterally decrease its housing allocation, the Association of Bay Area Governments and other regional planning organizations could see an invitation to develop their own housing targets despite the state's allocation formula. "We have fulfilled our statutory requirement to work with SCAG on coming up with the numbers," said Cathy Creswell, acting deputy director of HCD, who said HCD has authority to override SCAG's numbers. "We are required to make sure a region provides its fair share of the state's housing needs." Marc Brown, co-chairman of the California Housing Law Project said, "I think it's unfortunate in this case that SCAG felt like it has to challenge the entire process." Determining the need The housing allocation effort is a state-mandated process designed to give each city and county in the state a target number housing units at a variety of income levels. Local jurisdictions use the target numbers as a basis for their general plan housing elements, which must spell out how and where the city or county will accommodate the units. The state provides an allotment of housing units to every region, and the regional planning agency divvies them up among its cities and counties. The state originally gave the SCAG region a target of about 675,000 units, a number that SCAG eventually negotiated down to 504,000. But dozens of local jurisdiction were dissatisfied with how SCAG allotted those units across the southland. So SCAG conducted two rounds of appeals for its members — about a quarter of which sought to reduce their targets (see CP&DR, June 2000). During the second round, SCAG accepted all or part of appeals from 11 cities and counties for a total of 67,000 units. But SCAG never added those 67,000 units to other jurisdictions, instead cutting its RHNA by the same amount. Leaders of SCAG contend that state officials relied on outdated information and assumptions when they set the region's housing target. In a November letter to Housing and Community Development Director Julie Bornstein, SCAG President Ronald Bates wrote, "SCAG has reduced the regional housing need from the Draft RHNA because parts of the region have experienced long-term and profound distress in the housing market, influenced by base closures, high vacancy, foreclosure, and the lingering effects of the last recession." Plus, said SCAG Principle Planner Joe Carreras, the census counted more Californians than the state Department of Finance had estimated, meaning that more large families are living in the same home, a trend not reflected by HCD's housing allocation. "Clearly there is a really huge affordable housing crunch statewide, and we're a part of that," Carreras said. But focussing on the RHNA number instead of on how to solve the problem does little good, he said. The association worked on establishing good, defendable housing goals and did not worry so much about the final number, he said. Also, SCAG is following through on an action plan that resulted from a "housing summit" last fall, and is preparing a 10-year review of the region's housing and economic trends, he said. Officials in Sacramento are unconvinced. In an attachment to HCD's December response to SCAG, the state defended its use of Department of Finance data: "What is reflected in more recent DOF housing and household estimates is low housing production, or lower household formation; a problem that needs to be addressed by measures to increase housing construction, not reinforced by constraining the projected need, or the capacity to accommodate it. The incidence of families doubling up in single housing units, for example, does not justify defacto incorporation of it as a planning parameter." Creswell said state officials began working with SCAG on regional housing targets in 1997. She said SCAG had a good process until late last year, when it deviated from the process by reducing some jurisdictions' targets without redistributing those units elsewhere. The Inland Inquiry Lying at the center of the dispute are western Riverside and San Bernardino counties. San Bernardino County and its cities of Chino Hills, Victorville and San Bernardino all had their housing targets lowered on appeal by SCAG. Riverside County and its cities of Moreno Valley and Riverside also had their targets lowered by SCAG. Those seven jurisdictions account for 50,000 of the disputed units, as HCD insists that they keep their original allotment from SCAG. In the case of unincorporated San Bernardino County, HCD insists on a target of 43,668 units, while SCAG approved a target of 16,211. Neither number reflects market trends, as the generally pro-growth county has issued about a 1,000 housing permits a year recently. "The rate at which the Inland Empire would have to grow to meet the SCAG targets would be equal to the highest growth rate ever in the area, year after year after year," said SANBAG's Schuiling. "We don't claim to know what the right regional total is. But I do know that it is unreasonable to expect any part of the region to have record-setting growth year after year to meet a target handed to it by another agency." Arguing that it has not recovered from the recession and military base closures of the early 1990s, the City of San Bernardino successfully lobbied SCAG to reduce its housing target from nearly 3,800 units to zero. Both SCAG and HCD relied on old census data that did not reflect the closure of Norton Air Force Base and the Santa Fe rail yard, which eliminated thousands of jobs, said Valerie Ross, senior planner for the city. "We had the highest HUD foreclosure rate in the nation," she said. "We have vacant units throughout the city, both single- and multi-family." Ross also contended it is unfair for HCD to certify housing elements from other jurisdictions in the SCAG region while it rejects others that rely on SCAG-approved targets. The state's approvals eliminate the possibility of units getting redistributed to other jurisdictions. San Bernardino has not yet submitted a housing element to the state. The City of Moreno Valley has submitted a housing element, but it was based on a target of 3,500 units that SCAG approved on appeal — down from an earlier allotment of 10,000. The city has not heard back from the state, said Linda Guillis, the city's community and economic development director. Moreno Valley, just southeast of Riverside, was stung when March Air Force Base shuttered, eliminating 10,000 jobs. During the recession, Moreno Valley accounted for 62% of Riverside County's foreclosures, Guillis said. Even now, the city issues permits for only about 300 new homes a year, despite the existence in specific plans approvals for 19,000 units, she said. "We do have land available. We have an extremely business-friendly process and political environment. Frankly, we're ready to see the housing end of the market catch up," she said. Like other people, Guillis complained that SCAG appeared to view the Inland Empire as a convenient place to dump affordable housing. While Riverside and San Bernardino counties account for 19% of the current population, the original RHNA placed 46% of growth in the area. "We'd like to see some logical relationship between the jobs and the housing for people who work in those jobs. We're already in a housing-rich area," Guillis said. "When you create housing units in Moreno Valley, people are on the 91 freeway commuting to jobs in Orange County, and on the 10 and 60 freeways to get to jobs in Los Angeles County. What you have is a significant impact on the transportation corridors and on the air quality." Guillis also noted that the RHNA process is intended to prevent undue concentrations of low- and moderate-income housing. Yet at its current growth rate, Moreno Valley could not provide the targeted number of 2,900 very low- and low-income units sought by HCD — even if every new unit approved during the planning cycle were in the very low- and low-income bracket, she said. Creswell, of HCD, said she is sympathetic to many of these arguments. But, she said, SCAG should have dealt with them and not deferred the controversy to HCD at the end of the planning process. The department will certify housing elements from other jurisdictions because it cannot hold them hostage while a small group disputes its housing targets, she added. In the December response letter, state officials reject pleas from the Inland Empire and SCAG regarding a flat economy. The state employment growth has been double the national rate, which itself set records, and the Riverside-San Bernardino area had a higher rate of employment growth than any of the state's other major metro areas in 1999 and 2000, according to HCD. Still Creswell said state officials are willing to provide resources to aid economic development in Riverside and San Bernardino counties. The housing allocation process offered the opportunity for regional planners to determine a better distribution of jobs and housing; instead, they reaffirmed the traditional pattern of jobs near the coast and housing inland, she said. "We absolutely appreciate their (Inland Empire leaders) concern about needing a stronger job base in relationship to their housing," Creswell said. But she added, "This is fundamentally a problem that the region needs to deal with. … From our perspective, the region has gone without planning for housing for most of the last decade." Carreras, principle planner at SCAG, defended the association's decisions based on a weak Inland Empire job market, high vacancy rates, and lingering effects of the military's pullout. He said the association will promote dialogue between its members and the state. Carreras also said he recognizes the need for infill development of affordable and high-end housing in mature areas, especially three zones that are targets for venture capital, namely Eastern Ventura County, Santa Monica and Irvine. However, developers see infill projects as risky, and cities are often reluctant to approve housing development when there is limited vacant land available, he said. "We have to address fiscalization of land use if we're going to see any changes in development patterns of any scale in California," Carreras said. Whether the Legislature addresses that concern in a meaningful fashion this year is unknown. There is talk in the Capitol this year of housing element reform, including putting teeth in the existing housing element law by establishing serious penalties for noncompliant jurisdictions. No matter what the Legislature does, housing advocate Brown said, SCAG needs to ensure low-income housing units are fairly distributed. And cities in the Inland Empire and elsewhere need to decide how they are going to meet an unquestionable housing demand, he said. Contacts: Cathy Creswell, Department of Housing and Community Development, (916) 323-3183. Joe Carreras, Southern California Association of Governments, (213) 236-1856. Ty Schuiling, San Bernardino Association of Governments, (909) 884-8276. Linda Guillis, City of Moreno Valley, (909) 413-3210. Valerie Ross, City of San Bernardino, (909) 384-5057. Marc Brown, California Housing Law Project, (916) 446-9241. SCAG RHNA website: http://api.ucla.edu/rhna/index.cfm

Taxpayer organizations recently lost two lawsuits against the City of Los Angeles alleging violations of Proposition 218. In its first interpretation of the initiative, the California Supreme Court held that the city's apartment inspection fee was not subject to the voter approval provisions of Proposition 218. In the other case, an appellate court ruled that the city's water service fees and the transfer of money from the water fund to other funds were not subject to Proposition 218. In the apartment inspection fee case, the state Supreme Court chose a fairly narrow interpretation of Proposition 218, the 1996 Right to Vote on Taxes Act, which added article XIII D to the California Constitution. The ruling pleased many cities, about 90 of which filed amicus briefs in the case, but angered taxpayer groups, which said the court created a loophole for local government. In July of 1998, the City Council approved an apartment inspection program intended to combat slum housing. To fund the program, the council levied a $12-a-year fee on each of the city's approximately 750,000 apartments. Apartment owners filed a lawsuit, but lost at the trial court level when the judge ruled that the fee was not subject to Proposition 218 because it applied only to owners of rental units. However, a unanimous three-judge panel of the Second District Court of Appeal reversed the lower court, saying the charge was a user fee for property related service and, thus, subject to Proposition 218 (see CP&DR Legal Digest, October 1999). The city had argued that it could avoid putting the fee to voters because the levy was a regulatory charge on a business, not a tax on property. In a 5-2 decision, the California Supreme Court overturned the appellate court. Writing for the majority, Justice Stanley Mosk said neither the apartment owners nor the city were entirely correct. "The mere fact that a levy is regulatory (as this inspection fee clearly is) or touches on business activities (as it clearly does) is not enough, by itself to remove it from article XIII D's scope," Mosk wrote. "But the city is correct that article XIII D only restrict fees imposed directly on property owners in their capacity as such. The inspection fee is not imposed solely because a person owns property. Rather it is imposed because the property is being rented. It ceases along with the business operation, whether or not ownership remains in the same hands. For that reason, the city must prevail." Mosk dissected the language of Proposition 218, noting a crucial difference between a fee imposed on an incident of property ownership, versus a fee on a person or parcel as an incident of property ownership. " axes, assessments, fees and charges are subject to the constructional strictures when they burden landowners as landowners. The ordinance does not do so: it imposes a fee on its subjects by virtue of their ownership of a business — i.e. because they are landlords," Mosk wrote. "What plaintiffs ask us to do is alter the foregoing language — change ‘as an incident of property ownership' to ‘on an incident of property ownership.' But to do so would be to ignore its plain language meaning — namely, that it applies only to exactions levied solely by virtue of property ownership. We may not interpret article XIII D as if it had been rewritten." Chief Justice Ronald George, and Justices Joyce Kennard, Kathryn Werdegar and Ming Chin joined Mosk. Justice Janice Rogers Brown issued a dissent that was joined by Marvin Baxter. "In my view, the voters did not intend the courts to look any further than a standard dictionary in applying the terms of article XIII D," Brown wrote. "The dictionary defines an ‘incident' as ‘something incident to something else,' that is ‘dependent upon or involved in something else.' In other words, if the imposition of a fee depends upon one's ownership of property, it comes within the purview of article XIII D unless otherwise excepted." The water fees case was more clear cut, as a unanimous three judge panel of the Second District Court of Appeal upheld Ronald Sohigian's decision that a taxpayers' group had no grounds for its lawsuit. "Appellants contend that the charges imposed for water service in Los Angeles are in reality special taxes, imposed as an incident of property ownership, and therefore, require voter approval. We disagree," Justice Gary Hastings wrote for the court. "The usage rates are basically commodity charges which do not fall within the scope of Proposition 218. … The charges for water service are based primarily on the amount consumed, and are not incident or directly related to property ownership." The court also held that the city charter authorized the City Council to transfer water fund surpluses to a reserve fund, and then to the general fund. The Cases: Apartment Association of Los Angeles County v. City of Los Angeles, No. S082645, 01 C.D.O.S. 209, 2001 Daily Journal D.A.R. 237, filed January 8, 2001. Howard Jarvis Taxpayers Association v. City of Los Angeles, No. B137639, 00 C.D.O.S. 9465, filed November 1, 2000, ordered published November 29, 2000. The Lawyers: For Apartment Association: Trevor Grimm, California Apartment Law Information Foundation, (213) 380-0303. For Jarvis: Timothy Bittle, (916) 444-9950. For L.A. in apartment case: Miguel Dager, deputy city attorney, (213) 847-0165. For L.A. in Jarvis case: Fay Chu, deputy city attorney, (213) 367-4580.

Two years ago, heavy equipment churned up dust and closed lanes on nearly every major street in Temecula. The city was in the midst of a $60 million road improvement project undertaken to help catch up with rapid growth that has characterized the southwestern Riverside County community for years. In retrospect, the massive road project could not have come at a better time for slow-growth advocates, who in November 1999 elected two of their own to the City Council. The council now has a 3-2 pro-growth split, and both sides are gearing up for a heated municipal election this November, when all three pro-growth councilmen are up for re-election. Pamela Miod was one of the Temecula residents stuck in traffic during road construction two years ago. When it took her 30 minutes to drive seven miles across town one day, she "snapped." At the time, Miod did not know an EIR from a CUP. But after an initial inquiry to the City Council proved frustrating, Miod contacted Sam Pratt, a well-known Temecula growth fighter. Next thing she knew, Miod became manager of Pratt's City Council campaign, and president of a new group called Citizens First of Temecula Valley. The then-80-year-old Pratt won the election, becoming, he contends, the state's oldest first-time office holder. Citizens First, meanwhile, has become such a force that developers are now asking for meetings with the group. "Our organization has just grown and grown and grown � through e-mails, of course," Miod said. "We've had other organizations form as a result of this." The organization was quickly hit with the "no-growth" label, but Miod said her group opposes only the break-neck pace of development that has become standard. "We don't even have the chance to get used to one hill being leveled when another hill gets leveled," Miod said. "In every corner of town, there is some kind of huge development going on, whether it be commercial or residential." Since it incorporated in December 1989, Temecula has been one of California's fastest-growing cities. In only 10 years, its population doubled to 54,000 in 2000. Although a shopping mall was built recently, large single-family housing tracts have been the primary type of development in town. That is because Temecula offers relatively affordable prices and a few rural qualities, and it is within commuting distance � albeit long distance � of job centers in Orange and San Diego counties. Until 1999, the Temecula City Council had unabashedly welcomed development � much as the Riverside County Board of Supervisors did when it had jurisdiction over the area. "It's a different ballgame now," observed Matthew Fagan, a consultant on two major developments in Temecula and a former planner for the city. "For a young city, a lot has gone one. But I'm not sure it's different than what a lot of other cities have gone through." In fact, the political and planning cycles experienced by Temecula have been fairly predictable. After finding a welcome audience for his stance against growth, Pratt quickly proposed a moratorium on development. The moratorium went nowhere, but the City Council in March 2000 did adopt a Growth Management Action Plan. The plan talks about directing urban development to urban areas, preserving open space buffers and farmland, ensuring that infrastructure is in place ahead of development, expanding public transit, and participating in Riverside County's integrated planning process. The city has begun implementing portions of the plan, dedicating resources to the county's planning effort and sending a newsletter to improve communications with citizens. The Growth Management Action Plan also guides city review of development proposals, said Assistant City Manager Jim O'Grady. The city has no shortage of projects to review. Four major developments in various stages of the planning process would add a total of 8,000 housing units. One of those, the 2,000-home, 557-acre Wolf Creek project is due for a decision after several continuances. With the Growth Management Action Plan in place, O'Grady said, the city "reviews projects like Wolf Creek with an even stronger look at traffic and facilities � to make sure facilities are in place concurrently or even before construction." Part of Temecula's plight is not of the city's making. A substantial portion of growth during the 1990s was only the build-out of projects approved years earlier by the county. In some instances the county planned well, and in others it did not and the city has had to compensate after the fact, as exemplified by its $60 million road building program, O'Grady said. Growth in unincorporated areas within Temecula's sphere of influence continues to be an issue because surrounding developments often rely on Temecula roads and because they reduce open space and agricultural land valued by city residents. In January, the Riverside County Planning Commission approved a general plan amendment, zoning change and specific plan for the 1,800-home Tucalota Hills development in French Valley, a lightly developed area several miles north of Temecula. The project approval came despite growing citizen unrest regarding "leap-frog development" and questions from the city about congestion. "I am still concerned that we haven't seen a GPA that we don't like," said county Planning Commission Chairman John Roth, who cast the lone vote against the project. The county is also considering the 1,300-home Morgan Hill subdivision, on the southern edge of the Temecula city limits. The continuing amendments to the general plan are particularly irksome to some people because the county is in the midst of an integrated planning process that seeks to combine land use, transportation and habitat planning into one blueprint for growth. (See CP&DR, February 2000.) Temecula has increased its participation in the county's process since adopting its Growth Management Action Plan. Within the city limits, four proposed housing developments would bring the town close to build-out, at least within the current city limits. Three are fairly typical single-family housing tracts, but one would provide relatively high-density homes to the city's older downtown district. Backers of "Villages at Old Town" propose 1,350 apartments, 150 condominiums and 120 duplexes on 153 acres. The new homes would surround a three-acre "town square" park, according to planning consultant Fagan. "This is a new type of project for Temecula. It's not a suburban development, it is urban in nature and feel," Fagan said. The project would provide housing variety, bring an economic stimulus to Old Town, create a critical mass to encourage public transit and provide at least part of the funding for a much-desired western bypass, Fagan said. A 1998 economic study by Keyser Marston determined that up to 2,000 housing units would compliment Old Town's existing commercial businesses, Fagan noted. However, the last significant multi-family development in town, the Temecula Ridge apartment complex, became a lightening rod during 2000. The City Council rejected the project at first but ultimately approve it after reducing the number of units by 26 to 220. Miod, of Citizens First, and others have questions about Villages at Old Town, especially the traffic it will bring. Miod said city officials have latched onto the New Urbanist concept of "village" development, but they are not executing it. People who live in Villages at Old Town would still have to drive across town to shop at Costco or take the kids to soccer practice because there are no similar facilities nearby, she said. Plus, the project would climb up a prominent hillside adjacent to Old Town, she complained. "People want to have a little bit of open space within their city limits. They don't want to have to get in their car and see what these people are trying to give us, which is a green buffer around town," Miod said. The Growth Management Action Plan does call for preserving open space and creating buffers, as well as maintaining large parcel sizes in rural areas. And city officials boast about the 21 parks that have been built since the city incorporated. Still, Councilman Pratt is not satisfied. "The Growth Management Program is essentially, in my mind, the same as our general plan, and is a political statement to get me off everybody's back," he charged. "The words are there, but the execution isn't." Pratt intends to place on the November ballot an advisory measure that calls for restricting building permits, at least until the city has a better transit system in place. Citizens have also threatened to place on the ballot some type of urban growth boundary initiative, although nothing has qualified yet. "I believe I'm making some progress, but not progress you can see. It's philosophical progress," Pratt added. The election of Pratt and Mike Naggar to the City Council in 1999 clearly helped change the tone of the growth debate in Temecula. Balloting in November could take the city to the next phase in the life of a young, fast-growing city. "We think that we have done a good job of managing growth," Assistant City Manager O'Grady said. "But growth remains a major concern in the community, as it should be." Contacts: Sam Pratt, Temecula City Council, (909) 506-5100. Jim O'Grady, Temecula city manager's office, (909) 506-5100. Pamela Miod, Citizens First of Temecula Valley, (909) 302-6744. Matthew Fagan, Matthew Fagan Consulting Services, (909) 699-2338. Temecula growth management website: http://www.cityoftemecula.org/homepage/GrowthMgmt/GrowthMgmt.htm

A Hollywood property owners association that governs a business improvement district must abide by local government open meeting laws, the Second District Court of Appeal has ruled. The unanimous three-judge panel held that the City of Los Angeles "created" the Hollywood Entertainment District Property Owners Association (POA) to assume the city's legislative functions regarding the Hollywood Entertainment District II Business Improvement District. The court rejected the argument that the POA, which incorporated in 1996, was not a city creation for purposes of a second BID established in 1998.. The Property and Business Improvement District Law of 1994 (Streets & Highways Code §§36600) authorizes cities to establish business improvement districts. The districts can levy property assessments for a variety of public purposes, including building and maintaining parks, sidewalks and pedestrian malls. Cities can create a BID only after property owners who would pay more than 50% of the total assessments sign a petition. On September 3, 1996, the Los Angeles City Council adopted an ordinance creating the Hollywood Entertainment District Business Improvement District (BID I) for a five-block stretch of Hollywood Boulevard. The BID's management plan proposed a program of security, marketing, maintenance and streetscape improvements. Three weeks later, the Hollywood Property Owners Association (POA) filed articles of incorporation as a nonprofit, mutual benefit corporation "to development and restore the public areas of the historic core of Hollywood in order to make it a more attractive and popular destination …" In August 1998, the city adopted another ordinance creating Hollywood Entertainment District II Business Improvement District (BID II), which extended the original bid 10 blocks farther down Hollywood Boulevard. The management plan for BID II identified the POA as the governing entity. Combined, the two BIDs had an annual budget of more than $2 million. The POA's monthly meetings did not comply with the Brown Act (Gov. Code §§54950). The POA did not open its meetings to the public, did not post agendas 72 hours in advance, and did not convene solely within the association's jurisdiction. Aaron Epstein, who owns the 15-shop Artisan Patio within BID II, filed a lawsuit in March 1999 to force POA to comply with the Brown Act. Los Angeles Superior Court Judge Ricardo Torres ruled against Epstein. Torres held that because the POA predated BID II by two years, the association was not a creation of the city; thus, the Brown Act did not apply. The Second District, Division Three, overturned Torres. The appellate panel extensively cited International Longshoremen's & Warehousemen's Union v. Los Angeles Export Terminal, Inc., (1999) Cal.App.4th 287, in which the court held that a private, for-profit corporation organized to design, construct and operate a coal export facility at Los Angeles Harbor was subject to the Brown Act. The city brought the private corporation into being, and delegated to the corporation the governmental authority to development and improve a city harbor, the court ruled. In the Hollywood case, "the issue is whether the POA is a private corporation or entity that was created by City, the elected legislative body, to exercise some authority that City could lawfully delegate to a private corporation or entity," Judge Walter Croskey wrote. "We conclude that here, just as in International Longshoremen's, the private entity, the POA, was ‘created' by City to exercise governmental authority over BID I, authority that City otherwise could exercise. … The POA's sole purpose was to ‘develop and restore the public areas of the historic core of Hollywood.'" The contention that the POA was a pre-existing entity that just happened to be available to govern BID II two years later was an argument of form over substance, the court ruled. "City itself, in the Management District Plan for BID II, explicitly recognized that the POA ‘was formed in 1996 to govern Phase I,' that the POA also would govern ‘Phase II,' and that BID II was just an ‘extension' of BID I," Croskey wrote. "The POA's status as an entity originally ‘created' to take over City's legislative functions was not somehow negated, annulled, or dissipated simply because its role subsequently was expanded by the geographic expansion of the area over which it exercised such functions." The Case: Aaron Epstein v. Hollywood Entertainment District II Business Improvement District, No. B134256, 00 C.D.O.S. 9499, 2000 Daily Journal D.A.R. 12772, filed November 30, 2000. The Lawyers: For Epstein: Dennis Winston, Moskowitz, Brestoff, Winston & Blinderman, (310) 785-0550. For the BID: Andre Cronthall, Sheppard, Mullin, Richter & Hampton, (213) 620-1780. For City of L.A.: Patricia Tubert, Senior Assistant City Attorney, (213) 485-5416

Despite a thin mandate and a deadlocked Congress, incoming President George W. Bush is likely to make significant changes in shaping the federal government's role over California's land resources. In particular, his provocative selection of former Colorado Attorney General Gail Norton as Interior secretary is likely to create a major shift in the way the federal government approaches management of federal lands in California – and may also signal a shift in the way the Endangered Species Act is administered. Norton was by far the most conservative selection for the five key Cabinet posts dealing with planning and development issues. His selections for Agriculture, Housing & Urban Development, Transportation, and the Environmental Protection Agency all appear to be moderates who are unlikely to dramatically alter the direction of federal policy. Two are Californians – Agriculture secretary Anne Veneman and Transportation secretary-designate Norm Mineta, the only Democrat in the Cabinet – suggesting that Bush has placed a high priority on courting California constituencies during his first term. New Jersey Gov. Christine Todd Whitman is a high-profile choice for EPA administrator, while HUD secretary-designate Mel Martinez is a local politician from Florida who is close to the new president's brother, Florida Gov. Jeb Bush. None of the nominees to the five relevant Cabinet posts are white males. Three are women, one is a Cuban-American and the other is a Japanese-American. However, it is probably more relevant to break down the nominees a different way – by discussing the natural resource agencies (Interior and Agriculture), the urban development agencies (HUD and Transportation), and the regulatory agency that straddles urban and resource issues (EPA). Stacked up this way, it appears that the Bush Administration is likely to make a major break from the Clinton Administration only in natural resource issues – and even then the moderate Veneman may serve as a damper on the more conservative Norton. Interior and Agriculture Bush nominated two Western women to the key Cabinet positions on natural resources, but there the similarity appears to end. Norton worked in the Interior Department in the Reagan Administration but has spent most of the last 20 years in state politics in Colorado, serving as the state's attorney general from 1990 to 1998. Veneman, a lawyer who grew up in a Central Valley farming family, worked in the Agriculture Department during both the Reagan Administration and the first Bush Administration, rising to deputy secretary. More recently, she served as director of the California Department of Food & Agriculture under Republican Gov. Pete Wilson. Major environmental groups have launched a high-profile attempt to block Senate confirmation of Norton, claiming she is a disciple of James Watt, the Reagan Administration Interior secretary who favored aggressive exploitation of natural resources on federal land and thus served as the environmental movement's favorite "bad boy." There is no question that Norton is closely allied with the "Wise Use" movement and would represent a major shift in Interior Department policy from her predecessor, Bruce Babbitt. However, she also has a reputation as a smart and capable public official; her fellow attorneys general from both parties selected her to be one of the key negotiators in the multibillion-dollar settlement with tobacco companies. In eight years as Clinton's Interior secretary, Babbitt pursued a steady conservation agenda, moving much more Western land into federal protection and altering federal policy to restrict economic use of federal lands. He also defended the Endangered Species Act against congressional attack with considerable success – largely by shepherding the Natural Communities Conservation Planning effort in Southern California as an alternative method of protecting species while also permitting development. The Endangered Species Act was not amended by Congress during Babbitt's secretaryship. Norton will likely pursue a much different course – in large part because of a different philosophy about the Interior Department on the part of Bush and Vice President Dick Cheney, formerly a congressman from Wyoming. Both Bush and Cheney have been oil executives who favor expanded economic use of federal land. As Colorado attorney general, Norton steadfastly defended states' rights and the rights of property owners. Indeed, the most damaging evidence the environmentalists have dug up on her was a speech in which she said the nation "gave up too much" in terms of states' rights during the Civil War. However, she has distanced herself from the evangelical Watt, for whom she worked at the Mountain States Legal Foundation more than twenty years ago. "A person we worked for 20 years ago does not determine who we are now," she told the Denver Post. "I have a very different style. I work on a bipartisan basis." Indeed, Norton has not criticized the goal of environmental protection. Rather, she has argued in favor of "free-market environmentalism" and states rights. In 1998, she proposed changes to the National Environmental Policy Act to give states and local governments more power. In Colorado, Norton became known for implementing a voluntary self-audit system for corporations seeking to comply with environmental regulations. She also served as chair of the Coalition of Republican Environmental Activists, a group that sought to reclaim the environmental issue from the Democrats. The biggest question for California is whether Norton will hold firm on Babbitt's conservation planning approach to the Endangered Species Act. With a Congress almost evenly split, it is unlikely that the law will be amended any time soon. However, in administrative terms Norton could encourage conservation planning on terms that are more friendly to developers and landowners. It is also likely that, on her watch, the Interior Department will not have friendly relations with the California Resources Agency. During Babbitt's term, his office worked closely with moderate conservationists in both the Wilson and the Davis administrations. At Agriculture, Veneman will likely have a major influence on California – not only because California is the largest farm state but also because she will control the U.S. Forest Service, which oversees how land is used in the state's vast national forests. Both timber production and resort development were severely curtailed in the Clinton Administration. Similarly, Veneman will likely help the Bush Administration figure out how to handle the Bay-Delta water problem, which could affect agricultural land in California. For the last two years, Veneman has been a lawyer with Nossaman Guthner Knox & Elliott, a major California law firm active in endangered species, land use, and water work. HUD and Transportation In picking his Cabinet officers to run the two major urban development departments, Bush went in opposite directions – selecting a well-known, inside-the-Beltway veteran for one slot and a virtually unknown local politician from Florida for the other. However, both appear to come with a strong understanding of the role the federal government plays in shaping urban growth. At the Department of Transportation, Norm Mineta is likely to advocate a continued move toward the reform policies instituted by the Intermodal Surface Transportation Efficiency Act, ISTEA, and continued with TEA-21. As a Democratic congressman from San Jose and chair of the House Transportation Committee in 1991, Mineta played a key role in pushing ISTEA through the House. The two key provisions of ISTEA and TEA-21 are giving regional transportation agencies more power (by taking it away from state transportation departments) and allowing the regional agencies more flexibility in determining how to use federal funding (permitting them to shift some highway money to public transit, for example). The state highway departments and other highway lobbyists have fought hard – but unsuccessfully so far – to reverse this change in policy direction. When TEA-21 comes up for reauthorization later this year, all these issues will undoubtedly bubble to the surface again. While it might seem that a Bush Administration would be more hospitable to highway spending, it is worth noting that the original ISTEA was signed by Bush's father, who accepted the bill in the fall of 1991 – just as a recession was coming on – and promoted it as a "jobs bill". It may be that Mineta will be able to help ISTEA's defenders hold on to the policy reforms this year. It is less clear whether Martinez will continue – or reverse – the reforms made in public housing and community development by his predecessors in the Clinton Administration, Henry Cisneros and Andrew Cuomo. Cisneros reformed public housing with the HOPE VI program, which promoted replacement of high-rise public housing with low-rise, mixed-income projects. More recently, Cuomo had been promoting the "New Markets" idea, which held that American business should focus on inner-city areas because they are underserved markets. Martinez, a Cuban immigrant, was a surprise choice for HUD; most observers had expected Bush to pick Steven Goldschmidt, the moderate Republican mayor of Indianapolis. Martinez has relatively little public experience, having served as chairman of the Orange County Housing Authority in Orlando, Florida, during the 1980s and then one term as chairman of the Orange County board. Martinez caused some ruckus last year when he took a hard line against developers in Orange County, demanding full school mitigation for new residential projects and opposing two developments on that basis. However, he also chaired Jeb Bush's recent Growth Management Study Commission, which recommended a weakening of the state's growth management law. In particular, the commission called for reforming the state's "Development of Regional Impact" process, giving more power to local governments in reviewing projects that may have cross-jurisdictional impacts. Environmental Protection Agency Gov. Christine Todd Whitman of New Jersey was widely hailed as the best-known politician ever to take the EPA Administrator job. (Her predecessor, Carole Browner, was a relatively unknown Gore staff member who had been an environmental official in Florida.) Environmentalists generally accepted her appointment – especially compared to the selection of Norton as Interior secretary – but it is unclear how much she will change course from the Clinton Administration. Some environmental groups criticized Whitman for cutting environmental regulation programs in New Jersey and a few argued that she would be a friend of corporate polluters. However, as New Jersey's governor, Whitman strongly supported both brownfields redevelopment (which Bush advocated in his campaign) and open-space preservation. Whitman successfully promoted a statewide goal to set aside 40% of New Jersey's land in permanent open space and passed a $1 billion bond issue for land acquisition. She even committed some state bond money to purchase land in New York State to protect New Jersey's watershed. During the Clinton Administration, EPA gained a reputation as an aggressive promoter not only of brownfields redevelopment but also of "Smart Growth;" the agency coordinated a national network of Smart Growth activists, which was sometimes criticized by conservatives as a "cabal." It is unclear whether Whitman will retain or dismantle the Smart Growth program

For more than a century, commercial and residential development has been consuming the wetlands, tidal flats and beaches surrounding San Francisco Bay, the largest and most biologically rich estuary on the West Coast. Now, those same development forces may help reverse the trend, making possible the restoration of thousands of acres of critical wildlife habitat. Although one would assume that environmentalists welcome the change, the prospect has not been embraced wholeheartedly by the Bay Area's green community. That is because the deal involves commercial tradeoffs, an increasingly common conservation tactic as property values rise and pressure to develop open space increases in California. To obtain the land and raise the money needed to restore it, conservationists often must accept commercial projects they might otherwise oppose. It is a choice between pragmatism and ideological purity. The most significant restoration proposals affecting the Bay grow out of a desire to expand two of the area's most critical transportation hubs: San Francisco International Airport and the Port of Oakland. The airport is notorious for chronic flight delays caused by bad weather. Its four parallel runways are separated from each other by only 750 feet; the Federal Aviation Administration requires 4,300 feet between simultaneously landing planes when visibility is impaired. Consequently, fog or clouds force the airport to shut down two of the runways. The resulting delays have given SFO the worst on-time record of any major U.S. airport and send ripples throughout the nation's air traffic system. The situation is a civic embarrassment for San Francisco, and the congestion and delays have profound economic consequences. Forty million airport visitors contribute $10.7 billion to the local economy each year, and the products of Silicon Valley's high-tech manufacturing establishment increasingly rely on air transport to reach global markets. Passenger traffic is projected to increase to 51 million a year during the next five years. Airport officials have proposed replacing two of the runways, building the new ones a mile farther into the bay. That would require filling nearly two square miles of the bay. A few decades ago, this would not have been difficult to accomplish. According to the Audubon Society, the area of open water at high tide downstream from the Sacramento-San Joaquin River Delta has decreased since the Gold Rush era from 516,000 acres to 327,000 acres. Of the original 23 miles of sandy beaches ringing the bay, only seven remain. Tidal marsh has decreased from 190,000 acres to 40,000 acres, and 50,000 acres of tidal mudflats have dwindled to 29,000. Altogether, 137,000 acres of baylands (the area between the lines of high and low tide) have been diked and 50,000 acres have been filled. The consequences of shrinking the bay have been profound for the creatures that rely on these rich, energetic biological systems. About 500 species of fish and wildlife call the baylands home, and 20 of them are listed as threatened or endangered. Concern about continuing encroachment into the bay led in 1968 to the state Legislature's creation of the San Francisco Bay Conservation and Development Commission (BCDC). The commission was given the authority to approve or deny proposals to fill the bay. While it has occasionally approved small projects, the commission has generally required builders to offset each acre of fill with two acres of restored habitat elsewhere. Filling two square miles of the bay for runway construction poses a substantial mitigation challenge. And Bay Area environmental groups have been extremely critical of the proposal. Looking for a restoration opportunity big enough to satisfy their critics, airport officials found their eyes drawn to a vast complex of salt-production ponds along the south end of the bay in San Mateo, Santa Clara and Alameda counties. Acquired by Cargill Inc. in 1975 when it purchased the Leslie Salt Co., the 19,000 acres of ponds were once part of the bay, but were diked off from it more than a century ago. In 1999, Cargill began negotiating with state and federal agencies to sell the ponds for restoration as wildlife habitat. The asking price: $300 million, which would make it the second-largest state-federal land acquisition in California history (the Headwaters Forest deal, at $480 million, was larger). Negotiations picked up speed last year when San Francisco officials hit on the idea of using the state-federal purchase of Cargill's ponds as leverage for airport mitigation. (See CP&DR September 2000, CP&DR Economic Development, January 1999.) With the help of Mayor Willie Brown, the former Assembly speaker, they persuaded the Legislature to approve and Gov. Gray Davis to sign a bill authorizing $25 million in state funds for the purchase. Last October, the federal government agreed to chip in $8 million from the Land and Water Conservation Fund. Airport officials have said they have $200 million to spend on the restoration, and more state money could be authorized this year. A similar commercial tradeoff is in the works related to expansion of the Port of Oakland. The nation's fourth-busiest commercial harbor plans to dredge 13 million cubic yards of sediment from the shipping channel, deepening it to 50 feet and allowing it to handle larger container ships. In December, the port won approval from the BCDC to deposit 1 million cubic yards as a base for dockside construction, pump 7 million cubic yards into the Middle Harbor area to create 200 acres of shallow eelgrass habitat, and send 5 million cubic yards to wetlands restoration sites in Marin and Solano counties. The ecological opportunities made possible by the airport and port expansion projects are significant. Still, many environmental organizations continue to oppose the idea of using restoration of the salt ponds as compensation for the loss of so much bay. Wetlands and open water are not ecologically equivalent, they note, and the airport should explore other alternatives. Still, an opportunity like the Cargill purchase does not come along very often. The company has, in fact, suggested it would be interested in selling its 19,000 acres for development if public agencies aren't willing to buy the property, meaning the opportunity to restore them would be lost. It is unlikely that the political muscle required to squeeze $300 million out of state and federal coffers will be exerted on behalf of a straightforward habitat purchase. Degraded marshland is not exactly an awe-inspiring redwood forest, and without the vested economic interest connected to a more reliable airport, chances of repeating the publicly popular Headwaters deal are slim. If Bay Area conservationists are to have any realistic hope of securing such a vast piece of bayfront land, they may have to accept the tradeoff. Contacts: San Francisco Estuary Institute: http://www.sfei.org/ Audubon Society, Golden Gate chapter: http://www.goldengateaudubon.org/Conservation/SFOExpansion.htm San Francisco International Airport: www.sfoairport.com/

The U.S. Supreme Court has dropped its consideration of a case that many people hoped would resolve conflicts over processing of adult business permit applications. The court dismissed a case from Wisconsin because the adult business had withdrawn its application, so "the case no longer qualifies for judicial review," Justice Ruth Bader Ginsburg wrote for a unanimous court. The court had accepted the case because lower courts differ on the meaning of "prompt judicial review." The court in FW/PBS v. Dallas, 493 U.S. 215 (1990), ruled that unsuccessful applicants for adult business licenses must be accorded "an avenue for prompt judicial review." The Ninth Circuit Court of Appeals, which includes California, has since ruled that unsuccessful applications must be assured of a prompt judicial determination on the merits. (Baby Tam & Co. v. Las Vegas, 154 F3d 1097 (CA9 1998; see CP&DR Legal Digest, March 2000, August 1999.) Other courts have given FW/PBS a less-strict reading. The Court of Appeals in Wisconsin, which handled the instant case, held that prompt access to judicial review is sufficient. In 1995, the City of Waukesha, Wisconsin, rejected the annual license renewal application of City News and Novelty, Inc. because, the city contended, the adult business had violated the city's ordinance by allowing minors onto the premises and allowing patrons to have sex in video viewing booths. The business lost legal challenges in Wisconsin state courts. The U.S. Supreme Court granted certiorari and heard oral arguments. But not only did the actual controversy end when the business withdrew application, but the question the court hoped to reach was not reflected in the case. City News had been allowed to continue business during legal proceedings and was only acting to fend off a stop order. The lower court conflict has to do with license applicants whose expression cannot begin without government approval, Ginsburg wrote. "We venture no view on the merits of an argument urging preservation of speech (or expressive conduct) as the status quo pending administrative and judicial review," Ginsburg wrote. "It suffices to point out that the question is not the one on which the courts have divided." The case is City News and Novelty, Inc., v. City of Waukesha, No. 99-1680, 01 C.D.O.S. 465, 2001 Daily Journal D.A.R. 545.

A San Diego County Superior Court jury has awarded a developer $94.5 million in damages in an inverse condemnation lawsuit. The developer of a struggling business park near the Mexican border filed the lawsuit after arguing with the city since the early 1990s. Roque de la Fuente II contended in court that the city breached a 1986 development agreement, dooming development of his 312-acre business park. De la Fuente contended the city made permits difficult to obtain by increasing fees and conditions, in violation of the development agreement. He also argued that the city routed border truck traffic through the business park, and proposed an international airport near the business park, a prospect that scared away potential tenants. The city countered that it did nothing improper and that de la Fuente was an inexperienced developer who got burned by the recession of the early 1990s. Finding that the city had blighted the de la Fuente's property, Superior Court Judge Vincent DiFiglia accepted the inverse condemnation arguments. He then handed the case to a jury, which awarded the developer $94.5 million. One juror told the San Diego Union Tribune that it appeared the city wanted the business park to fail so it could take over the property. In fact, the city foreclosed on lots in the business park after de la Fuente failed to make payments on bonds that the city had underwritten to finance to project. City officials, who were stunned the size of the award, said they would appeal.

We were driving up the coastal area of hilly San Mateo County, just north of Silicon Valley, when we saw something ahead on the shoulder of the road. When we got a little closer, we saw it was a middle-aged man wearing a tweed jacket with elbow patches. He was holding up a sign: "WILL TEACH SCHOOL FOR HOUSING." While this story is fictitious, the need for affordable housing for teachers in the Bay Area is very real. Several school boards, including those in San Francisco, San Jose and Milpitas, have studied the idea of building subsidized housing for teachers who cannot otherwise afford to live in the area. And in December, the tiny La Honda-Pescadero Unified School District in San Mateo County went further, by entering into an agreement with Mid-Peninsula Housing Coalition, a Redwood City-based non-profit home builder. The district and non-profit agency plan to construct between 15 and 45 units of subsidized housing on vacant district land adjacent to Pescadero High School in Pescadero, a small, unincorporated community. The agenda for La Honda-Pescadero is clear: teachers simply cannot afford, or even find, housing in or near this semi-rural community. Housing is expensive in San Mateo County, which lies just north of Silicon Valley. The median home price of a single-family home was $605,000 in the fourth quarter of last year, according to the San Mateo Board of Realtors. Prefer to rent at those prices? A two-bedroom apartment in the area, if you can find one, goes for an average of $1,851 monthly, according to the Palo Alto office of Marcus & Millichap. Scarcity is an even more pressing problem than high rent in the coastal area of San Mateo County. Apartments are thin on the ground to begin with, and apartment vacancies are currently 2%. Many of the district's 35 teachers are living in a variety of less-than-perfect circumstances, including converted garages and rented rooms in private houses. One district official told the San Jose Mercury News that some teachers have quit the same day they were hired because of their inability to find housing. As a result, the district is rarely able to hold onto teachers for more than three or four years. The small district does not make matters easier by paying some of the lowest starting salaries in the region. A fully credentialed teacher starts at about $28,600, compared to starting salaries of about $34,000 in the rest of the Bay Area, according to school district Superintendent Bonnie McClung. The proposed subsidized housing for teachers, however, could translate into something akin to a generous housing allowance that would make those paltry salaries look far more attractive. Although the project is still in the talking stages and rents are yet to be decided, subsidized two-bedroom units in the Bay Area typically run about $950 a month, according to Richard Ridenour, communications director for Mid-Peninsula Housing Coalition. With that number, we can do a seat-of-the-pants pro forma of the potential value of the subsidized housing to renters. Subtracting the subsidized rent ($950) from the market rate ($1851) leaves us a subsidy value of $900 monthly, or $10,800 yearly. All of a sudden, those La Honda-Pescadero salaries start looking a lot more attractive. As desirable as this deal sounds on paper (to me, at least) it is conceivable that not every teacher would have a low enough income to qualify for the subsidized housing. As I mentioned above, rents are not yet available for the San Mateo County units, although we might get a rough idea of the income ranges that might qualify for subsidized housing in the South Bay, based on HUD definitions of low- and moderate-income. Low income is defined as being 50-to-60% of the median income in a particular area. In San Jose (which is probably somewhat higher than San Mateo County) 50% of the median income equals about $34,800 for a single-earner household, or $39,500 for a family of three with two breadwinners; these folks qualify for a two-bedroom apartment that rents for $925. Teachers who earn 60 percent of the median income ($41,760 for single-earner households or $46,980 for a three-person, two-breadwinner households) can rent a two-bedroom apartment at $1,120 monthly. Moderate-income is defined as starting at 80% of median income; in San Jose, that is $55,680 for single-earners and $62,640 for two-income households; those salaries qualify teachers for a unit at $1,525 monthly. In short, those income qualifications may work for teachers who are both single and receiving salaries on the lower end of the pay scale. Those qualifications, however, may not work for married couples (unless teachers are married to freelance planning journalists). Teachers with seniority, who earn $60,000 and more, would not qualify. Public policy problems remain to be solved. Ridenour hinted that the nonprofit may not be entirely comfortable with a teachers-only building, and it wants to include other public employees, such as fire fighters. Despite problems, I think this is a good deal all around: for the district, the teachers, the community. I was originally intending on concluding this story with a prediction that major Silicon Valley employers would soon follow the example of La Honda-Pescadero, by purchasing or renting units for entry- and mid-level personnel. As is often the case, however, my light bulb flashed on long after someone else had the idea. Redwood City-based Oracle Corporation, one of the largest employers in the region, is reportedly planning to purchase about 300 apartment units in Foster City and Redwood Shores, which are among the few communities in the area where large-scale home building is taking place. I think it's a great idea, even if I doubt Oracle can buy enough units at this late date to make a big difference to its rapidly growing workforce of more than 10,000 people. Nonetheless, Oracle's home buying spree is eloquent testimony that business, as well as education, needs housing at all income levels. Maybe some non-profits should stand by the side of Highway 101, holding signs that say, "WILL PROTECT CALIFORNIA ECONOMY FOR HOUSING." I bet they would get some takers.

A state appellate court has rejected the argument of a landowner who claimed that the City of Fort Bragg was liable for losses suffered when the city approved an adjacent building. In 1997, the city granted a building permit to David Codling for construction of a two-story building on a vacant lot next to the Barracks Mall, a two-story structure with businesses on the ground floor and apartments above. The Barracks Mall had been built to the lot line, and the city allowed Codling to do the same — putting his new structure within inches of the Barracks Mall. The new building cut off access to light, air and a fire escape for second-floor apartments in the Barracks Mall. Soon, some tenants vacated their units; other tenants were told to leave by the property owner because of the lack of a secondary fire escape. In time, the lack of rental income left the owners, Douglas and Jill Sutherland, unable to pay their mortgage, and they lost the property to foreclosure. The Sutherlands sued the city under the Tort Claims Act (Gov. Code § 815.6), which makes a public entity liable for failing to discharge a mandatory duty. In this case, the property owners contended the city's Site and Architectural Review (SAR) Committee had a mandatory duty under the Fort Bragg Municipal Code to review Codling's proposed structure. The committee did not consider the application. Mendocino County Superior Court Judge Conrad Cox issued a judgement on the pleadings for the city. The Sutherlands appealed, but a unanimous three-judge panel of the First District Court of Appeal, Division Four, upheld the ruling. In an opinion written by Justice Patricia Sepulveda, the court contrasted "mandatory duties" with "administrative discretion," making clear that even the word "shall" does not alone support liability under the Tort Claims Act. The court cited Haggis v. City of Los Angeles, (2000) 22 Cal.4th 490, see CP&DR Legal Digest, April 2000, in which the state Supreme Court held the City of Los Angeles was not liable for landslide damages despite failing record a notice of substandard condition as required by city code. The court also relied on a case outside the realm of land use, Creason v. Department of Health Services, (1998) 18Cal.4th 623, in which the state was held not liable for failing to diagnose and report a minor's health condition. "Creason and Haggis stand for the proposition that even where language in the predicate enactment appears mandatory, if significant discretion is required to carry out any duty imposed, that duty is not mandatory within the meaning of section 815.6 and thus a breach of the duty will not support tort liability," Sepulveda wrote. In the Fort Bragg case, the city's municipal code mandates that SAR Committee perform certain functions. "But this mandatory language is coupled directly with subjective, general and advisory duties," Sepulveda noted. She cited municipal code language instructing the committee to encourage a "desirable environment" and to ensure the compatibility of development with its design concept. She also noted the committee's role is solely to advise decision-making bodies. "We conclude that the City's site and architectural review committee exercises administrative powers that are general in scope, vague in formulation and advisory in function; powers that qualify, in a word, as discretionary," Sepulveda wrote. The court also rejected the Sutherlands' argument that the city incurred liability for a mandatory duty under the Uniform Fire Code. " t is evident that the dominant, the overriding, and quite possibly the exclusive purpose of review of building plans by the SAR committee is aesthetic and scenic, rather than the preservation of access to light and air from vacant adjoining lots or preventing the obstruction of windows so they may be used as fire exits," the court held. Plus, the court ruled, while the city's fire chief has extensive discretion in interpreting the Uniform Fire Code, he does not have the authority to deny a building permit for a neighboring landowner. The Case: Douglas Sutherland v. City of Fort Bragg, No. A088919, 01 C.D.O.S. 340, filed December 19, 2000, ordered published January 10, 2001. The Lawyers: For Sutherland: Jone Lemos Jackson, (707) 962-0222. For Fort Bragg: Andrea Saltzman, Meyers, Nave, Riback, Silver & Wilson, (510) 351-4300.

The act of going downtown to see a movie is another great example of America's nostalgic relationship with its urban past — kind of like shoeshine boys, hopping onto streetcars, and tossing nickels at newsboys shouting headlines. Nostalgia aside, the post-war suburbanization of culture led to a downtown exodus not only of housing, offices, and retail, but also of cinemas. First, theatre screens popped up on the exurban fringe in the form of drive-ins. Eventually, twin theatres began appearing in malls and shopping centers, and ultimately in multi-screen configurations. This pattern left many a grand old downtown cinema to fend for itself – usually with poor results. California's best example of the decline of the downtown movie house remains beleaguered downtown Los Angeles, where the city's storied Broadway is littered with grand movie palaces that are listed on the National Register of Historic Places, nearly all of which are shuttered. The emergence of the new retail and entertainment downtown during the late 1980s has been accompanied by a return of movie screens to downtown – usually in multiscreen formats. But a counter-trend has also emerged, bifurcating the booming cinema exhibition business. Driven by consumer preference for choice and distributor preference for volume, the 1990s also saw the industry turn to giant, high-tech megaplexes: stadium seating, digital sound systems, and nearby parking structures. Some plexes have become so large that they often serve as anchors in there own right. And these projects are rarely placed in the built-out, under-parked, aging commercial districts of yore. Old downtowns do not fit the profile of most exhibitors. Meanwhile, a cinema screen niche market has emerged downtown, starting in Pasadena. In what was a daring move for the time, United Artists opened a modest cineplex in Pasadena's then-nascent Old Town area back in the late 1980s. That one development has since been considered by Pasadena observers to have been a crucial spark that ignited one of the most successful downtown shopping and entertainment developments in the state. Since that time, many a city hell bent on downtown revitalization has pinned all hopes on getting a cinema back up and running. And a small number of exhibitors have obliged them, particularly when public tax dollars helped grease the skids. So during the 1990s, many a downtown cineplex was built. Currently, there are probably more screens in the planning process in California's downtowns than at any time since the 1930s. But just as many downtowns have found a new life as retail and entertainment centers, the cinema exhibition industry has hit hard times. And that has placed many a project in jeopardy. For the downtowns that have not yet turned the corner, the struggles of movie houses could spell trouble. "The whole industry is in a major state of turmoil, making it difficult for new theatre deals to go ahead" says Roger Dale, Principal of The Natelson Company, an economic consulting firm based in Orange County. Indeed, during the last year, cinema chains such as Edwards, United Artists, General, and Carmike have all filed for Chapter 11 bankruptcy protection. Not surprisingly, overbuilding has been at the heart of the problem. According to industry officials, in 1995 there were 27,000 screens in the United States. At the end of 2000, the number had grown to 37,000 – a 37% increase. It's understandable that exhibitors were enticed into building – box office revenues have increased for nine years running. But the big losers are the big chains that weren't watching the niche markets closely enough. So, despite evidence that many recently-developed downtown cinemas are actually doing well, many cities are watching their screen dreams get cut. In mid-January, the City of Culver City was tripped up when American Movie Corporation pulled out of a 20-screen project in the Town Plaza project, a development the city has worked on for years, and one seen as necessary for Culver City's downtown revitalization. The City of Oxnard has lost at least two exhibitors it had lined up during its now three-year effort to get a downtown cineplex off the ground. According to Dale and other industry professionals, however, downtowns remain one of the niche markets where more theatre growth is possible. "One of the exhibitors doing well is the Krikorian chain, which sticks to smaller 12 to 14 screen venues, and takes advantage of redevelopment assistance" says Dale. Another successful player is San Rafael-based Century Theatres, a rapidly growing exhibitor with eight downtown theatres currently in the works, including San Mateo, Sacramento, and Albuquerque. Century spokespeople suspect that they are the nation's leading developer of downtown theatres, with 40% of their current projects in central business districts. According to Victor Castillo, senior vice president of corporate development at Century, the key to success downtown lies in the answer to four questions: 1) is there a newly opened, stadium seating cineplex in the trade area? 2) Is access to downtown easy? 3) Is there plenty of parking? 4) Does the downtown have something else going for it? "There are some downtowns that are so in the hole in terms of their situation that there needs to be a plan that goes beyond just putting in a theatre," Castillo says. Century executives, when considering a downtown location, visit the downtown, sampling restaurants and checking activity levels. "The momentum needs to be going in the right direction," says Castillo. As with many things in planning and development, success depends up on whom you work with. Despite a number of stalled or canceled downtown cinema projects in California, many downtown cinema projects may still be viable, particularly if the downtown is already showing other signs of life. Ultimately, it's the deal partner that may determine whether a community gets to live out its movie-going nostalgia, or whether those dreams will fade to black. Stephen Svete, AICP, is president of Rincon Consultants, Inc., a Ventura-based consulting firm.