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As this blog has reported , the standard conservative critique of smart growth and "good" planning sometimes doesn't seem very logical. Sometimes these critiques were based on the assumption that any government intrusion into land markets is bad – whether it creates higher density or lower density – and sometimes they're based on the assumption that smart growth inevitably promotes higher-density development when what the market really wants is low-density development. Indeed, my good friend Wendell Cox sometimes espouses both these views at the same time. Which is why the conservatives who came to the defense of smart growth the other day at the New Partners for Smart Growth conference in Kansas City were so refreshing. They didn't agree with everything smart growthers advocate – indeed, they were assiduous in shooting down anything that smelled like big government – but they did a good job of identifying the situations in which conservatives should support smart growth. Virginia blogger Jim Bacon and Long Island law professor Michael Lewyn both landed in more or less the same place: Traditional suburban zoning represents heavy-handed government regulation that robs people of their liberty and property rights. "What kind of society outlaws granny flats?" asked Bacon, who runs a blog called Bacon's Rebellion . Lewyn, a professor at Tauro Law School , went further and articulated a heavy conservative critique of minimum parking requirements, saying not only that they rob people of their property rights but also that they hinder real estate development by taking property out of play. "If the spaces are above ground, these requirements are taking money from your hands," Lewyn said. "If they're underground, you pay have to pay money to build the parking units." In addition, Bacon hit hard on the fiscal effects of smart growth and sprawl. He said conservatives should be opposed to the practice – especially common in red states – of having the government pay for all the infrastructure costs associated with new development. "That's crony capitalism," he said. This is a mighty different critique than we typically see from Cox, his buddy Joel Kotkin , and academics like my USC Price School colleague Peter Gordon . They typically begin with the assumption that low-density development is the natural order of things and therefore any move toward higher density must be the result of government regulation. Indeed, as I have previously reported, not long ago on Larry Mantle's Los Angeles radio show , Wendell and I agreed that regulations should be lightened so that developers can be more responsive to the marketplace – but he then railed about SB 375, saying that it would cause (I am paraphrasing here from memory) "30 units an acre in neighborhoods that have five 5 units an acre for decades and decades." The idea that the market might want higher density and property owners ought to have the right to cash in on this changing market didn't seem to occur to him. In that sense Cox represents trods a well-worn path in conservative suburbia – the desire to retain one's own property rights while making sure nobody else is able to cash in on theirs. Bacon, in particular, called his fellow conservatives out on this paradox and went on to say that conservative Republican politicians are more than happy to exploit it. "In Virginia," he said, "Republicans see their constituents as their red spots on the electoral map. They've written off the urban areas. They are focused on the areas that consume a lot of gasoline and are committed to existing form of development." There was one area where both Bacon and Lewyn appeared to strongly part company with the smart growthers: Both strongly opposed government-funded public transit. Transit is, of course, a core part of the smart growth agenda and virtually all major transit systems in the United States – and in the world, for that matter – are run by public agencies that make up for farebox deficits with tax revenue. To both Bacon and Lewyn, this appears to be top-down government intrusion at its worst. "The traditional municipal-transit model is broken," Bacon said. "None make a profit, all are undercapitalized and starved for resources. Why would that be? Gee, maybe because they are government monopolies dealing with labor unions."

Two weeks ago, CP&DR reported on a study by the law firm of Holland  & Knight that broke down 95 legal challenges to projects under the California Environmental Quality Act over the past 15 years. The study provided a comprehensive look for the firs ttime - finding, for example, that 60% of the cases challenged "infill" development projects as opposed to "greenfield", and over 70% of the cases were brought forth by local organizations. But what about the outcomes of these cases? Sixty percent of projects challenged may be "infill" type projects, but are they more likely to be shot down than "greenfield" type projects? Similarly, 73% of the cases were filed by local organizations, but to what extent are they victorious? The 15-year time period shows a success rate for plaintiffs of close to 50%, but did this trend hold over time? Seeking these answers, CP&DR broke down the Holland & Knight study to take a closer look at what's really going on. Here are some highlights: * Though more infill projects are challenged, these challenges are much less likely to be successful. Only 31% of infill challenges were successful, compared to 55% of greenfield challenges. * The success rate for legal challenges has been dropping steadily since 1997 - from 70% in the 1997-2002 period to only 34% in the 2007-2012 period. * Legal challenges are most likely to succeed against infrastructure and industrial projects (more than 60%). Challenges were least likely to be successful against commercial projects (less than 30%). * Legal challenges against public projects were more successful than legal challenges against private projects, though the difference was small (50% to 44%). * Local plaintiffs were more likely to succeed than non-local plaintiffs, though again the difference was small (49% to 41%).

All last year, local government nerds throughout California -- this one included  -- assumed that Jerry Brown would sign a bill to bring back redevelopment if one landed on his desk. So we were all shocked -- shocked! -- when he vetoed every substantive bill the Legislature gave him. (You can read about my surprise here . And based on the comments of some people at the UCLA land use conference on Friday, some of us are still shocked. But maybe we shouldn't have been. Maybe it's pretty simple.  Here's what San Gabriel City Manager said on Friday: "The governor will not sign a bill until he has clawed back every single penny from the successor agencies that he thinks he can get." Looked through this lens, I have to admit, it all makes sense. DOF is squeezing cities for all the former redevelopment funds it can possibly get, and the beancounters there are not done. The budget looks good, but Brown is not the kind of guy to let up once he sets his sights on something. And what leverage does he have? The veto pen. I've floated a lot of theories about this. He's still mad at the cities and wants to punish them. He doesn't want anybody to think he's going to let the old redevelopment system be resurrected in any way, shape or form, so he's waiting for the body to get cold. But maybe Steve's right: He's holding redevelopment revival hostage until he gets all his money. So simple.

Here's a deal for you:  Enviros agree to a variety of reforms to the California Environmental Quality Act -- especially constraints on the ability to sue, including possibly limiting standing and prohibiting lawsuits if the umbrella state or federal environmental law has been complied with. In return, developers agree to ditch the conclusion of Ballona Wetlands Land Trust v. City of Los Angeles , in which the California Supreme Court ruled that natural environmental conditions such as sea-level rise are not subject to CEQA analysis -- for example, in examination of a beachfront project that could be affected by rising waters. Crazy? Maybe. But it's a deal that prominent CEQA lawyer Michael Zischke of Cox, Castle & Nicholson says could be on the table in Sacramento.  Ballona Wetlands is driving environmentalists crazy because it means they can't use CEQA to deal with sea-level rise. Speaking at Friday's UCLA Land Use Law and Planning Conference in Los Angeles, Zischke said it's a deal that developers might actually take -- largely because, he says, they won't be giving up much. "My view is that Ballona is not that helpful because you probably want to look at sea-level rise anyway and put it on the record" in order to reduce the risk of litigation and loss in the courtroom, he said. Meanwhile, even though the California legislature is more Democratic than ever as a result of last fall's election, that doesn't mean CEQA is sacrosanct. On another panel, lobbyist Tony Rice, who represents many local governments, noted that Sen. Michael Rubio, D-Shafter, has now been installed as chair of the Senate Committee on Environmental Quality. Rubio  made a last-ditch effort for CEQA reform in August , only to back off when Senate leader Darrell Steinberg took him to the woodshed.  Rice also mentioned that Rubio's arrival at CEQ coincided with staff changes on the committee. Although he didn't mention any names, longtime CEQ staffer Randy Pestor -- viewed as the legislative staff's leading defender of CEQA -- recently retired.

The California Environmental Quality Act has long been driven more by the courts than by the Legislature. And 2013 is likely to be a big year in court for EQA. Five pending cases before the California Supreme Court -- and a sixth that might be heard -- could significantly affect how both localities and colleges apply the California Environmental Quality Act. The cases involve such items as infill exemptions, whether a lack of state funding makes a mitigation infeasible, whether lower fire response times are an environmental impact, and when to use a future environmental baseline.  Infill Exemption: Rendered Meaningless? Perhaps the most significant is a challenge to categorical exemptions for infill development and small structures that were used by the City of Berkeley in dealing with construction of a large house on an existing single-family home. The Court of Appeal ruled against the city  in  and if the Supreme Court affirms the lower court ruling it could punch a hole in the infill exemption in particular. The case involved the proposed construction of a large single-family home with a 10-car garage on an existing lot, resulting in a structure of almost 10,000 square feet. The plaintiffs in Berkeley Hillside Preservation v. City of Berkeley  said that this triggered the "unusual circumstances" exception to the infill exemption. The city noted that there are many other houses of similar size nearby, but the First District Court of Appeal ruled in favor of the plaintiffs. As Cox Castle & Nicholson's Michael Zischke put it, "Under Berkeley Hillside, every potentially significant impact is itself an unusual circumstance" -- which, of course, makes the infill exemption meaningless. State Funding of Mitigation Measures: Infeasible? The Supreme Court has also granted review in City of San Diego v. Board of Trustees , a case in which the Court of Appeal rejected California State University's argument that an off-site traffic mitigation associated with a development prject at San Diego State is infeasible because the state Legislature has not appropriated funding for it.  Several local agencies, led by the City of San Diego, sued, claiming that Cal State needed to look at a variety of funding sources. On appeal Cal State relied on City of Marina v. Board of Trustees of California State University , 39 Cal.4th 341 (2006), in which the California Supreme Court concluded that the power of a state agency to mitigate impacts is "ultimately subject to legislative control" and if the legislature doesn't appropriate the money "the power does not exist". However, the Fourth District Court of Appeal concluded that the Supreme Court's language in the City of Marina case is dictum and therefore not binding. The court said Cal State should look to a variety of other possible funding sources for the money. Are Lower Response Times An Environmental Impact? One of the biggest debates around CEQA is whether its breadth reaches to impact on public services such as traffic, schools, and public safety. On the one hand, traffic is a well-established part of CEQA analysis; on the other hand, it's also well established that the impact of development on schools is not an environmental impact, unless it forces the construction of new schools which, in themselves, have an environmental impact. Which leaves public safety. In City of Hayward v. Board of Trustees of California State University -- another dispute between a city and Cal State -- Hayward challenged Cal State's environmental impact report for the long-term master plan for Cal State East Bay. The EIR identified the impact on public services and noted that the the campus expansion would require the construction of a new fire station and the hiring of 11 new firefighters. However, the EIR concluded that the fire station's impacts would be less than significant because it would be built in an infill location, as would most of the expansion. Hayward sued, claiming that Cal State should have mitigated the cost impact of the additional firefighters. Relying on Goleta Union School District v. Regents, 37 Cal.App.4th 1025 (1995), the First District ruled against the city. "Although there is undoubtedly a cost involved int he provision of additional emergency services, there is no authority upholding the city's view that CEQA shifts financial responsibility for the provision of adequate fire and emergency response services to the project sponsor. The city has a constitutional obligation to provide adequate fire protection services." The court also upheld a traffic mitigation plan against Hayward's argument that the plan impermissibly punted on the mitigation. The Supreme Court has granted review but has deferred briefing until after the San Diego State case is determined. Can A Lead Agency Use A Future Baseline? Last spring, the Second District Court of Appeal ruled against a group of residents in the West Los Angeles neighborhood of Cheviot Hills who had challenged the use of a future environmental baseline in the environmental impact report for the Expo Line. The ruling muddied the waters on the whole future baseline question, so the Supreme Court will soon hear the case. The Expo Line construction authority's reasoning was that it made no sense to measure the projects environmental impacts against a current environmental baseline when a project won't be constructed for several years. In Neighbors for Smart Rail v. Exposition Metro Line Construction Authority, the Second District ruled that   Sunnyvale West Neighborhood Association v. City of Sunnyvale , 190 Cal.App.4th 1351 (2010), in which the Sixth District Court of Appeal ruled that Sunnyvale should not have used a future baseline to estimate traffic mitigations. The Second District also said that the California Supreme Court's ruling in Communities for a Better Environment v. South Coast AQMD , 48 Cal.4th 310 (2010), did not apply in this case. In that case, the Supreme Court rejected the idea that because Conoco already had regulatory permission to emit a certain amount of pollutants, it could use a theoretical future baseline that assumed the permitted pollutant level had been reached.  Is All GIS Data Public? Here's one that is not a CEQA case, but Zischke says may be of interest to CEQA practitioners: When is a GIS database a "public record" subject to release at no cost under the Public Records Act and when is it a "computer mapping system" exempt from that law because it is software and, therefore, for which a government agency can charge a fee. CEQA analyses are often based on GIS analysis. In the case of Sierra Club v. Superior Court , the Sierra Club made a public records request for Orange County's GIS database, which included polygon boundaries for every parcel linked to names and addresses of parcel owners. Like many counties, Orange County has historically charged a fee for this information as a way to recoup cost, though it offered to provide the Sierra Club with a PDF version for free. The appellate court ruled that the GIS database was a computer mapping system exempt from the Public Records Act, meaning the county could charge a fee. Petition for Review Pending: Can An Initiative Be Adopted Without A Vote -- And Without CEQA Review? In December, CP&DR reported on a Fifth District Court of Appeal ruling that a voter initiative and CEQA that appeared to create a conflict between districts. That case is pending before the Supreme Court and review could be granted soon. In Jobs & Small Business Alliance Tuolomne v. Superior Court , Cal.Appl.4th 1006 (2012), the City of Sonora was considering a pending Wal-Mart application -- complete with EIR -- when Wal-Mart filed signatures for an initiative to create a change in the land-use regulations that dispensed with need for discretionary review for the project. Rather than placing the measure before the voters, the Sonora City Council adopted it -- as is their privilege under elections law -- and did not conduct a CEQA analysis on the change, as some previous case law suggests. The Fifth District ruled that this was impemissible and a CEQA analysis was required. However, in 2004, the Fourth District Court of Appeal ruled in another case, Native American Environmental Protection Assn. v. City of San Juan Capistrano , 120 Cap.App.4th 961, that legislative bodies do not have the discretion to conduct a CEQA review on an initiative they adopt rather than put before the voters. Thus, it would appear that a direct conflict between districts has been created.

End of Redevelopment Helps Balance Budget Legislative Analyst Mac Taylor has described Governor Brown's budget proposal as "roughly" balanced. Brown was able to save money from major cut backs- like last year's dissolution of redevelopment agencies, and voter-approved tax increases, like Prop 30.  Clearlake Completes Redevelopment Wind-Down Clearlake Redevelopment Oversight Board has approved its state mandated fund report- finding a negative balance of $1,648, city acquired properties totaling a worth of  $1.2 million, and more than $936,000 to be disbursed to the county.  DOF Mandates That Stanislaus County Return $10 Million to State The DOF has decided the former redevelopment funds were not restricted to projects despite an October review that found the $10 million to be restricted for housing projects per the county's 1991 agreement with California Legal Rural Assistance. State officials disagreed with the review and ultimately required $10 million be returned to the county auditor-controller by Dec. 21. Business Deals of Hercules Former Redevelopment Agency Remain Unsettled Disputes between the city and a local fitness business continue as both parties have differing views on amounts owed to the city and on the terms of an oral purchase and financing agreement. The city has also failed to collect money owed from a local restaurant that closed in December. With the restaurant owing the city more than $112,000, several employees are also coming forth with claims of unpaid wages.  HUD Approves Onizuka Redevelopment in Sunnyvale With HUD's approval, Sunnyvale can move forward on redeveloping the former Onizuka air force station. The redevelopment plan includes an affordable housing project and a Foothill-De Anza Community College campus.

Now that DOF has decided 240 redevelopment appeals, the next step shouldn't surprise anybody: The lawsuits are beginning to roll in: Murietta sues over affordable housing, city loan Murrieta has sued DOF over its decision to invalidate two payments – one a $3 million payment to the city from the RDA and the second a $1.2 million payment to developers on an affordable housing project called Monte Vista San Bernardino County sues to get loan repayment San Bernardino has become the rare county to sue DOF, claiming money it provided to a redevelopment project as a loan should not be given to other taxing entities but, rather, repaid to the county. El Cerrito settles DOF lawsuit, will skip "true-up" payment El Cerrito has settled its lawsuit with DOF, which permitted the city to skip a $1.7 million "true-up" payment Meanwhile ... Oakland tries to cover $18.5 million in clawbacks The city always used redevelopment funds aggressively to cover operating costs. Oakland claims 2,000 affordable housing units are at risk.

Almost 60% of lawsuits filed under the California Environmental Quality Act challenge environmental review projects in infill locations as opposed to greenfield locations, according to a new analysis of 95 recent cases by two lawyers at Holland & Knight. The new analysis comes on the heels of three other recent studies concluding that CEQA actions are struck down by courts between 40-60% of the time, compared to virtually zero for NEPA. Mixed-use projects and infrastructure projects were challenged more frequently than any other type of project. Most of the EIRs were challenged on the basis of  water supply, traffic, or air quality. The study by veteran CEQA hands Jennifer Hernandez and Daniel Golub also concluded that about 70% of the plaintiffs in these cases were local organizations, most frequently environmental or homeowner groups. About two-thirds of the projects were private development projects, while a third were public projects. The Holland & Knight study is the fourth study by private CEQA practitioners on trends on CEQA litigation – a topic that has been the subject of lots of political spin over the years but very little empirical research In 2011, veteran CEQA lawyer Clem Shute found that over a 40-year period, courts had found CEQA EIRs inadequate more than 40% of the time, compared to 0% -- yes, zero – for NEPA compliance by federal agencies. More recently, the Thomas Law Group – the firm of veteran CEQA lawyer Tina Thomas – found that EIRs were successfully challenged about half the time , while Negative Declarations were successfully challenged 60% of the time. A recent study by Holland & Knight using the same database found that 52% of Categorical Exemptions were struck down in court as well . The latest Holland & Knight report was an analysis not of outcomes but of who sues and over what. It was based on 95 court challenges to environmental impact reports between 1997 and 2012.

A couple of months ago, we reported on four post-redevelopment models emerging in California, based on a presentation by Paul Silvern of HR&A: Alhambra, Oakland, San Diego, and Los Angeles. Now Silvern and his colleagues at HR&A -- along with ICF and Renata Zimril -- have proposed a whole new post-redevelopment economic development structure for Los Angeles. Unsurprisingly, the recently released HR&A report -- commissioned by L.A.'s chief administrative officer and chief legislative analyst -- calls for the creation of a consolidated Economic Development Department. But if the proposal is adopted by the city, it would represent revolutionary change for a city that has long been characterized by a large, sluggish bureaucracy that has difficulty being nimble enough to compete on economic development. Perhaps most interesting is how HR&A proposes to fund the new operation: With the money the city now receives in its general fund because redevelopment was killed. One oft-overlooked point about the end of redevelopment is that it created a "windfall," if one might call it that, for city general funds. Redevelopment agencies typically received somewhere between 60% and 100% of property tax increment from inside redevelopment project areas. Now that the money is distributed to taxing agencies just like all other property tax money, cities are getting about 15% of it into their general funds. For the City of Los Angeles, that's about $20 million a year. Most cities will no doubt vacuum up this new revenue and use it to keep the police department whole or pave more streets. But a few cities -- and apparently Los Angeles is among them -- are viewing these funds as possible seed money for a new, post-redevelopment economic development effort. HR&A's report also calls on the city to: -- Reposition economic development as a high-priority citywide effort that isn't so bogged down in the politics of city council offices or the regulatory churning of the city bureaucracy. -- Create the position of deputy mayor for economic development. -- Spin off a citywide economic development nonprofit that will have more flexibility to do deals than the city government. -- Manage the city's real estate assets more strategically, either to generate revenue or maximize their value in creating new economic activity. HR&A looked at lessons learned from eight recognized leaders in economic development, including two in California -- San Diego and San Francisco. No other city in California is Los Angeles, of course. But the HR&A report provides some interesting fodder for the ongoing discussion in local circles around the state about how to maintain a viable economic development effort in the post-redevelopment era.

As cities around the state are still stinging from the state's decision to deny many of their 240 redevelopment appeals, redevelopment skirmishes still continue around the state -- often about affordable housing projects that cities claim are nearing completion. Here's a sampling: Santa Ana sues DOF over affordable housing project KABC The City of Santa Ana in Orange County is suing the state Department of Finance over DOF's decision not to permit the city to complete construction on a 41-unit low-income housing project the city claims is 75% completed. Meanwhile, Santa Ana's city manager and city attorney are under fire and may be at risk of losing their jobs, though this controversy appears unrelated to the redevelopment situation.  Arcata owes money to contractors even though DOF has demanded it Eureka Times-Standard Meanwhile, the North Coast city of Arcata in Humboldt County claims that much of the money DOF has demanded was already paid to -- or is still owed to -- contractors on the Sandpipe affordable housing project. Tulare County sues Porterville over RDA expansion Porterville Recorder Redevelopment may not exist anymore, but that didn't stop Tulare County from suing Porterville over a 1,500-acre expansion to its redevelopment project area in 2010. Presumably Tulare County is seeking a financial settlement over tax-increment funds collected between June 2010, when the expansion occurred, and February 2012, when redevelopment ended.

Approximately one-third of new housing units constructed in California's metropolitan counties between 2000 and 2009 were built in infill locations, according to a new report from the Environmental Protection Agency . The EPA Office of Sustainable Communities found that 386,000 infill units were built in the state's 19 metropolitan counties – 33.5% of the 1.15 million units built overall. This figure did not change between the boom years in the first half of the decade and the bust years in the second half. The Los Angeles-Orange County metro area (a separate metro area under the Census definition) led the state with 62% infill, followed by 59% in the Bay Area and 38% in San Diego. The highest percentage in the state was Santa Clara County (again, technically a separate metro according to the Census) with almost 80%. The lowest figures were 11% in the Inland Empire and 14% in both the San Joaquin Valley and the Sacramento Valley, suggesting that these inland areas continue to serve as the greenfield "escape valves" for crowded coastal metros. California's figure was significantly higher than the national total of 21% and about the same as the 32% total in the Northeast. Unlike in California, most metros saw an increase in infill construction during the bust. The EPA defined infill housing as housing constructed in Census block groups that were mostly developed in 2000. The agency used American Community Survey data, land cover analysis, and comparative aerial images in doing the analysis. % of New Housing In Infill Locations, 2000-2009

There's been a lot of redevelopment news around the state this week: DOF at your service: Santa Barbara ordered to sell parking lots and train depot . Modesto can't use redevelopment funds to pay off bonds for downtown projects . Ukiah surrenders Costco site to successor agency. ... Meanwhile, Lois Wolk seeks to eliminate voter approval for Infrastructure Finance Districts ... Housing setaside legacy project s NoHo apartment complex opens. Affordable housing project opens near Alkali Flats in Sacramento ... On a sad note, redevelopment lawyer Tim Sabo passes away ... And on the lighter side ... Sacramento's Mermaid bar -- sometimes used as Exhibit A in the fight over redevelopment in 2011 -- is up for sale. You can read Bill Fulton's defense of subsidizing the Mermaid bar as sound public policy here . And finally ... deep down you knew it was true:  Retailers  are the big losers in the death of redevelopment.