Stanislaus County voters may have rocked the Central Valley on Tuesday by approving a growth-control initiative that prohibits the rezoning of agricultural land without voter approval. Traditionally, growth control initiatives have been a coastal phenomenon. But they have been inching into the valley in recent years. A growth boundary initiative in Stockton narrowly lost out to city-written boundary measure in 2004 (see CP&DR , December 2004 ). Tracy voters adopted a housing permit cap in 2000 and have refused to ease it. Davis, of course, has plenty of voter-imposed growth rules. Modesto's advisory vote requirements date to the 1970s.   But none of those restrictions compares to Measure E — known as Stamp Out Sprawl or SOS — which Stanislaus County voters supported by a 2-to-1 ratio. Similar to Napa County's vaunted Measure J and the SOAR initiatives in Ventura County, Measure E requires voters to decide the rezoning of agricultural land, although Measure E is limited to residential rezonings. In Ventura and Napa counties, the result has been that significant development in unincorporated areas has nearly ceased. If the effect is the same in Stanislaus County, it would be a major change, because the county has been plenty willing to carve up farms with subdivisions. According to the Modesto Bee, the county has approved nearly 3,000 houses in unincorporated areas since 2000. The county fought like hell to block Measure E. First, it delayed the vote on Measure E until 2008, even though advocates submitted petition signatures in June 2006. In the interim, developers drafted a growth-friendly plan for Salida, the county's largest unincorporated growth area, and gathered signatures to place the plan on the ballot. When the Salida plan qualified for the ballot, supervisors simply adopted it rather than permitting voters to decide (see CP&DR Local Watch , September 2007 ). It was a slick move, but one wonders whether the development community won the Salida battle at the expense of the county war. Surprisingly, the development community sat out the February election. Builders didn't like Measure E, but they didn't campaign against it, either. Denny Jackman, an SOS co-author and former Modesto councilman, figures that builders didn't fight Measure E because they know that protecting farmland has become a public priority. Plus, he said, "There are nine incorporated cities in Stanislaus County, so there are plenty of areas in which the BIA can still build." Jackman contends that SOS vote sent "a real strong signal" to the county and cities about growth planning. But Larry Giventer, a professor of politics and administration at California State University, Stanislaus, questioned how many people were even paying attention to Measure E. "I don't think very many people followed Measure E, compared with all the hype the presidential election and state propositions were getting. It sort of flew under the radar," Giventer said. In addition, the City of Modesto had its own high-profile ballot measures — one giving the City Council more authority over city administration and one dividing the city into council districts. Those measures in the county's largest city received far more attention than the SOS initiative, Giventer said. What helped Measure E was its offer to let voters decide on development, Giventer added. "I don't think it's a harbinger of things to come, I think it's a reflection of the past. Voters like to control things," he said. No matter why voters approved SOS, the most important thing might be whether the initiative gets copied in other San Joaquin Valley counties. For planning wonks, farmland preservation and low-density development have been big issues in the Central Valley for a long time. In recent years, however, farmland preservation has become a public cause ( CP&DR , June 2007 ). If Measure E gets repeated in counties like Merced and Madera, both of which have a larger percentage of unincorporated area development than Stanislaus County has, the effects could be dramatic. And, I should note, the farmland preservation movement may have deeper grassroots in Merced County than anywhere in the valley. - Paul Shigley

Stanislaus County voters on Tuesday approved a growth control initiative that prohibits the rezoning of agricultural land to residential uses in unincorporated areas without voter approval. Two-thirds of voters in the fast-growing Central Valley county approved the "Stamp Out Sprawl" initiative, which was strongly opposed by county supervisors. Voters also approved a less-restrict county alternative, but the citizen initiative received the most votes. Initiative supporters said Stanislaus County should direct growth to the nine incorporated cities, rather than continuing to permit conversion of agricultural lands. The initiative's requirement for voters to decide on agricultural land rezoning is similar to the approach approved by voters in Napa and Ventura counties during the 1990s. Elsewhere in California on Super Tuesday, voters in Santa Clara and Rocklin upheld housing project approvals, while voters in San Clemente overturned conversion of a golf course into condominiums. Alameda County Voters rejected two parcel tax measures for Children's Hospital and Research Center Oakland. Measure B was a hospital-backed initiative, while Measure A was something of a compromise between the hospital and the county. Both would have imposed an annual tax of $24 per residential parcel, $250 for a large business parcel and $100 for a small business lot to raise about $300 million for construction of a new hospital. Measure A would have last 35 years compared with Measure B's 30 years, and Measure A would have given a greater cut to the county to pay for tax administration. County officials disliked both measures because they imposed a tax to pay for a private hospital and placed the burden solely on Alameda County landowners even though the hospital serves the region. Hospital neighbors complained that new hospital facilities would displace families and conflict with the North Oakland neighborhood character. Measure A (2/3 vote required): No, 59.4% Measure B (2/3 vote required): No 69.0% Imperial County A measure prohibiting the importing of sewage sludge into the county passed easily. The measure is aimed at blocking a "sludge-to-energy" plant proposed by Liberty Energy east of the Salton Sea. Measure X: Yes, 67.9% Madera County Oakhurst. Voters in this 13-square-mile, 4,200-person community in the foothills along Highways 41 and 49 rejected incorporation. The opposition group Keep Oakhurst Rural Coalition argued that the Local Agency Formation Commission process was skewed and the public was not adequately notified of the incorporation drive. Supporters contended that local residents need more influence over the rapidly growing town's future. Measure C: No, 57.1% Napa County Voters approved a general plan amendment and zoning change to permit the four-acre Stanly Lane Pumpkin Patch, located in an agricultural zone south of Napa, to have a delicatessen and wine tastings. Measure K: Yes, 57.3% Orange County City of Newport Beach. Voters approved an initiative that amends the city charter to require a new city hall to be built on city-owned land between MacArthur Boulevard and Avocado Avenue, next to the central library. For years, the city has promised to develop the hilly 12.8-acre site as a park. Initiative proponents said the site offers the cheapest location for a much-needed city hall. Measure B: Yes, 52.8% City of San Clemente. A project that involves replacing nine holes of the private Pacific Golf Club with 224 housing units failed at the polls. The project approved last year by the City Council included a development agreement in which landowner Michael Rosenfield would pay $11.5 million for development of a community park and senior center elsewhere in town. Opponents who forced a referendum vote said the development would reduce open space, increase traffic and raise public service costs. Measure C: No, 68.5% Riverside County Wildomar. Incorporation of the community of 29,000 people along Interstate 15 won approval. The incorporation drive followed years of local residents fending off attempts by Lake Elsinore and Murrieta to annex Wildomar. Measure C: Yes, 60.2% Placer County Rocklin. In a referendum, voters backed developer Rick Massie's proposed 558-unit, 622-acre project in Clover Valley, a growth battle zone for more than 10 years. Project supporters defended the development for maintaining 60% of the site as open space. The United Auburn Indian Community, which owns the nearby Thunder Valley Casino, has promised to buy 154 lots to preserve the remains of an ancient community. Opponents said the entire site should remain undeveloped and complained the project would increase traffic congestion. Measure H: Yes, 52.8% San Diego County City of Coronado. An initiative that would have prohibited any building at the beach — including lifeguard buildings, restrooms or a bike path — without voter approval failed. Meanwhile, a measure asking whether the city may go forward with a planned 2,500-square-foot lifeguard support building won easily. Proposition A (voter approval requirement): No, 52.9% Proposition B (lifeguard support building): Yes, 67.7% San Francisco A $185 million park bond to pay for development of three new bay front parks and extensive repairs and renovations at existing parks and green spaces was approved. Proposition A (2/3 vote required): Yes, 71.7% Santa Clara County City of Santa Clara. In a referendum election, voters backed a plan to re-use the University of California's 17-acre Bay Area Research Extension Center site for development of 110-single family houses by SummerHill Homes and a 165-unit low-income senior citizens apartment complex by Charities Housing. The university closed the agricultural research center across from Valley Fair mall about five years ago. SummerHill agreed to pay the state $34 million for 11 acres, while the city and Charities Housing agreed to pay $10 million for 6 acres. Development opponents called the site the "last 17 acres of open space in Santa Clara." Measure A (general plan amendment referendum): Yes, 60.9% Measure B (rezoning referendum): Yes, 60.5% Stanislaus County Voters endorsed the "Stamp Out Sprawl" initiative prohibiting the rezoning of agricultural land to residential uses without voter approval. Also on the ballot was the county's alternative "Responsible Planning and Growth Control Initiative" proposing a two-year moratorium on agricultural land conversions until the county completes a general plan update. Although both passed, the SOS initiative takes effect because it received more votes. Measure E (citizen initiative): Yes, 66.9% Measure L (county alternative), Yes: 63.4% Yuba County Not surprisingly, voters turned down the 5,100-unit Yuba Highlands project that the county had approved on 2,900 acres between Beale Air Force Base and Spenceville Wildlife Refuge. In January, developer Gary Gallelli urged voters to reject the project so that he could pursue a scaled-down version. Measure N: No, 77.6%

The California Supreme Court has dismissed a case involving San Diego County's antenna ordinance because the Ninth U.S. Circuit Court of Appeals struck down the ordinance last year. Adopted in 2003, the ordinance created a four-tier system for granting conditional use permits for wireless telecommunications facilities. The level of review and amount of information required depended on the location, visibility and height of the proposed structures. Nearly one year ago, the Ninth Circuit invalidated the ordinance because its discretionary provisions and public hearing requirements ran afoul of the federal Telecommunications Act. ( Sprint Telephony PCS, LP v. County of San Diego , (9th Circuit 2007) 490 F. 3d, 700; see CP&DR Legal Digest , May 2007). Before the Ninth Circuit issued its opinion, the state high court had decided to review a Fourth District Court of Appeal decision upholding the San Diego County ordinance (see CP&DR Legal Digest , August 2006). The Fourth District said the federal Ninth Circuit was getting antenna cases wrong by ruling that localities may not regulate the aesthetics of antennas in the public right of way. But the state Supreme Court said the Ninth Circuit decision in the San Diego County case made moot the state court lawsuit over similar issues. The case is Sprint Telephony PCS v. County of San Diego , No. S145541.

Environmentalists have filed a lawsuit to halt development of Fanita Ranch in Santee, the scene of nearly three decades of suburban San Diego growth battles. In December, the Santee City Council approved a plan from Barratt-American for 1,380 homes, most on half-acre lots, as well as a small commercial district and several parks. A little more than half of the 2,600-acre site would be set aside as open space with an extensive trail system. The Center for Biological Diversity, the Endangered Habitats League and the group Preserve Wild Santee filed a suit in January that contends the project conflicts with a multiple species habitat conservation plan for the region. The site contains critical habitat for the endangered California gnatcatcher, a rare butterfly and the San Diego fairy shrimp, according to the environmentalists. They also contend the environmental impact report inadequately addresses water supply, air quality, traffic and grading. In 1980, developers proposed 14,000 housing units on the Fanita Ranch. Those plans and subsequent proposals went nowhere. In 1999, the city approved a 3,000-unit project for the site, but voters rejected the project during a referendum election (see CP&DR Local Watch , September 1999). In 2005, however, nearly two-thirds of Santee voters rejected an initiative that sought to block development near water courses and on steep slopes — an initiative aimed directly at Fanita Ranch and the Rattlesnake Mountain area. A congressionally appointed commission quietly has recommended approximately tripling the federal gasoline tax and overhauling federal transportation programs. In a plan released in mid-January, the National Surface Transportation Policy and Revenue Study Commission recommended raising the gas tax by 5 cents to 8 cents per gallon annually for five consecutive years beginning in 2009, and indexing the tax for inflation thereafter. The federal gas tax is currently 18.4 cents per gallon. The commission also recommended consideration of a vehicle-miles-traveled fee, congestion pricing on metropolitan highways, new freight fees, and ticket taxes on rail riders. The revenue would help fund a dramatically increased $225 billion annual federal transportation program. Three commission members, all with ties to the Bush administration, dissented from the gas tax recommendation. Congress appointed the 12-member committee, including Metropolitan Transportation Commission Executive Director Steve Heminger from the Bay Area, two years ago. The panel identified many shortcomings in highway and rail infrastructure, and in federal programs. The group recommended increased federal spending, creation of a new National Surface Transportation Commission modeled on the Base Closure and Realignment Commission that would oversee a new national strategic planning process, accelerating project delivery times, and replacing more than 100 existing federal programs based primarily on modes of transportation with 10 outcome-based programs. The commission's report is available at www.transportationfortomorrow.org The largest Bay Area development advocacy group has endorsed the adoption of mandatory green building standards in the nine-county region. The Home Builders Association of Northern California (HBANC) is urging all cities and counties in the region to adopt the Green Point Rated program of the Berkeley-based Build It Green organization. The builders group said its goal is to reduce new home energy consumption to 50% of 1990 levels by 2020, and reduce carbon emissions to 30% less than 1990 levels during the same period. The Green Point Rated system offers points based on features such as improved insulation, building orientation to the sun, solar panels, improved window glazing, energy-efficient lighting and appliances, and low-water landscaping. The program guidelines and points calculator are available at www.builditgreen.org . The HBANC is the first industry group in the country to back mandatory green building standards, a concept that the industry has fought in the past. The group did so partly because cities and counties have started adopting disparate rules. An audit by Caltrans has questioned the City of Placentia's expenditure of $36.2 million in state funds for a project that called for lowering five miles of railroad tracks through the northern Orange County city. Caltrans is demanding Placentia repay about $11.4 million of the money, which the state contends was misused for land purchases or used to pay expenses authorized by a project manager who faces criminal prosecution for conflict-of-interest. Caltrans is also demanding the city return nearly $25 million unless the city can justify how it spent the money. The audit, conducted at the request of Assemblyman Todd Spitzer (R-Orange), is the latest chapter in a saga that has consumed the city. In 2000, the city started planning for a project known as OnTrac. It involved placing five miles of freight and passenger train tracks in a 35-foot-deep trench and building a series of overpasses. The idea was to eliminate eight at-grade crossings of the tracks in anticipation of train traffic roughly tripling to about 150 trains per day over 20 years (see CP&DR Public Development , February 2005). Estimated project costs started at about $300 million but topped $600 million by the time the city pulled the plug on the project in 2005 after having built only one overpass. Less than a year later, the Orange County grand jury indicted former City Administrator Robert D'Amato and former Public Works Director and OnTrac consultant Christopher Becker on two conflict-of-interest charges stemming from the city's $4.5 million consulting contract with Becker while he was still a city employee (see CP&DR In Brief , May 2006). City officials, most of whom have turned over since the OnTrac era, disputed Caltrans' findings and said they would fight the repayment. Three environmental organizations have dropped a California Environmental Quality Act lawsuit that charged San Bernardino County with ignoring the impact of a new general plan on global climate change. Attorney General Jerry Brown settled a similar lawsuit in August 2007, but the Center for Biological Diversity, the Sierra Club and the San Bernardino Valley Audubon Society kept their suit alive. The groups agreed to drop the suit when the county Board of Supervisors agreed to: hire a consultant to help develop a greenhouse gas emissions reductions plan and to complete the plan by March 2010; create a map-based database for identifying important plants and animals, and wildlife corridors; and adopt new guidelines by July 1 for approving development plans and projects as a way of protecting native species and important plants and animals. The county further agreed to update a hazard mitigation plan to address population growth and roads in hazardous areas. Diablo Grande — the controversial golf course resort and subdivision in the hills of western Stanislaus County — has gone on the market for $150 million. Diablo Grande gained prominence during the 1990s because of litigation challenging the water analysis contained in the project's environmental impact report. Ultimately, a state appellate court issued a landmark decision saying that a local government may not defer analysis of a complete project's long-term water source ( Stanislaus Natural Heritage Project v. County of Stanislaus , (1996) 48 Cal.App4th 182; see CP&DR Legal Digest , September 1996). The ruling helped spur legislation aimed at ensuring local governments do not approve large projects without an assurance that water will be available. Stanislaus County supplemented the Diablo Grande EIR and successfully defended subsequent litigation. In 2004, environmentalists reached a settlement with Diablo Grande developers that designates nearly half of the site for the endangered California red-legged frog and San Joaquin kit fox. The 30,000-acre project calls for 5,000 to 10,000 housing units, six golf courses, a hotel, a conference center, a winery and a commercial center. So far, however, only two golf courses, a winery and fewer than 500 houses have been built, although the county has approved 2,000 lots. Developers Donald Panoz and J. Morton Davis put the project up for sale at the start of the year. One of the most contentious historic preservation battles in the state concluded with the Los Angeles Unified School District paying $4 million into a fund for historic school preservation in exchange for the Los Angeles Conservancy dropping a lawsuit that sought to preserve the Cocoanut Grove nightclub. The Cocoanut Grove was the last remaining portion of the Ambassador Hotel. Built during the early 1920s, the Ambassador was a center of Los Angeles culture and politics for decades. It was where Sirhan Sirhan shot Bobby Kennedy on the night that Kennedy won the 1968 California Democratic primary election for president. The 500-room hotel on Wilshire Boulevard closed in 1989, and the school district acquired the 24-acre property in bankruptcy court proceedings during 2001. The district planned to wipe the site clean and build a three-school facility for 4,200 students. The conservancy sued to force the school district to refurbish the hotel for use as a school but eventually accepted a plan to keep only the Cocoanut Grove as a high school auditorium. Construction began about two years ago. In late 2007, the school district adopted a revised plan that called for demolishing the nightclub, which the district said could not be incorporated safely into the new campus. The conservancy sued again, but the two sides settled the case in early January. A plan for off-reservation Indian casinos in Barstow appears to have died. The Interior department in January rejected applications to take land into trust in Barstow for the Los Coyotes Band of Mission Indians from San Diego County, the Big Lagoon Rancheria from Humboldt County and the Chemehuevi tribe from the Lake Havasu area. The Los Coyotes Band and the Big Lagoon tribe proposed building two casinos along Interstate 15 in Barstow, rather than pursuing casinos on their remote reservations (see CP&DR Deals , August 2006). Gov. Schwarzenegger signed agreements with the two tribes for the off-reservation casinos, although the Legislature never ratified the compacts. The Chemehuevi band proposed a competing plan that never got as far as the other two. The Interior department rejected the applications because of the distances between the tribes' reservations and the proposed casino location. The Los Coyotes Band said it would again seek approval after a new president takes office in 2009. The Big Lagoon tribe, however, said it would build a small casino and resort on the coast north of Eureka. The Madera County Board of Supervisors has rebuffed a county grand jury recommendation to replace the members of a water advisory committee. In a report issued in November 2007, the grand jury said the four members of the committee — two real estate brokers, a commercial real estate developer and a dairy farmer — were unqualified to make recommendations on water policy and should be replaced. In a formal response filed in January, the Board of Supervisors said the members are qualified and would remain in place. The grand jury report arrived several months after a Board of Supervisors' decision to abolish a semi-independent, 14-member water oversight committee and replace it with a five-member advisory commission. The new commission has only four members because Supervisor Frank Bigelow disagreed with dumping the old committee and has refused to appoint anyone to the new commission. Water is a sensitive subject in Madera County partly because of past proposals by private companies to create a groundwater bank southwest of Madera for the purpose of selling water to urban areas. None of those proposals went anywhere, although the public Madera Irrigation District is now considering a groundwater bank. Former San Bernardino County figures convicted in a corruption scandal lost their appeal over an order to pay the county $10.6 million in restitution. The Second District Court of Appeal upheld the jury's verdict against former County Administrative Officer Harry Mays, former garbage company executive Kenneth Walsh and billboard company owner Shep McCook. A jury ordered those men and former County Administrative Officer James Hlawek, who succeeded Mays, to pay the county after finding Mays, Hlawek and Walsh jointly liable for fraud, unfair competition, unjust enrichment and breach of fiduciary responsibility. Federal prosecutors also won bribery convictions against the three. Walsh and Mays bribed Hlawek so that Walsh's company, Norcal Waste Systems, could expand its control of the county's waste management services. McCook provided bribes so he could erect billboards on county-owned land — a scandal that also involved Supervisor Gerald Eaves, who has since left office. The appellate court determined, "The remedy fashioned by the trial court is an equitable form of forfeiture that is utilitarian in its design and serves the community by strongly discouraging the avarice of corrupt politicians and the burden of contracts tainted by conflicts of interest." The case is County of San Bernardino v. Walsh , No. B185391, 2007 DJDAR 19064, and was filed on December 27, 2007. Embattled San Francisco Supervisor Ed Jew resigned from office in mid-January. In November 2007, a federal grand jury indicted Jew on five counts of bribery, fraud and extortion for allegedly shaking down businesses in need of permits. The federal indictment followed state charges that Jew falsely claimed to live in San Francisco's Sunset District when he ran for office in 2006. Prosecutors maintain that the Chinatown flower shop owner lives in suburban Burlingame. Although Proposition 13 eliminated local government agencies' ability to set property tax rates, a new report by the Senate Local Government Committee makes clear that local governments still have extensive taxing authority. A detailed reference paper, "Revenues and Responsibilities," outlines the taxing powers of cities, counties and special districts. The publication is available on the committee website, www.sen.ca.gov/locgov .

In a case that the court called "unnecessarily complicated," the Fifth District Court of Appeal has ruled against residents challenging the environmental review of a 219-house subdivision in the foothills of Porterville. The case was complicated by the housing developer's insistence that the court take into account an environmental impact report for the 1990 Porterville general plan and an urgency hillside development ordinance approved the same day as the subdivision. Both project proponents and opponents tried to use those documents to their advantage. But the court said the only thing at issue was the adequacy of the mitigated negative declaration (MND) that the city certified for the subdivision. The mitigated negative declaration did not refer to the 1990 general plan EIR, and the city could not have considered the urgency ordinance during the environmental review process because the ordinance was not in place, the court determined. The court called these documents "extra-record evidence." "Extra-record evidence may not be used to challenge the substantiality of the evidence supporting the city's adoption of the MND or to prove that the city failed to proceed in a manner required by law," Justice Herbert Levy wrote for the court. Sticking to the true administrative record, the court found that project opponents had not raised issues relating to the mitigated negative declaration's adequacy during the city's administrative process, and, therefore, could not make a fair argument that the project might adversely affect the environment. In early 2005, Contour Development proposed a 230-lot subdivision on 67 acres of dry farmland with a slope of 1% to 15% on the east side of the Tulare County city. After a hearing before the Porterville City Council, Contour redesigned the project to 219 lots, with more land dedicated to trails and a pocket park. In September 2005, the City Council adopted the mitigated negative declaration and approved the subdivision. A group called Porterville Citizens for Responsible Hillside Development sued, arguing that the mitigated negative declaration was inadequate, that the project was inconsistent with the general plan and that the city violated the Subdivision Map Act. Tulare County Superior Court Judge Lloyd Hicks ruled the project opponents had made a fair argument that the project may have significant adverse impacts, and he ordered a new environmental study addressing "aesthetics, density and grading/drainage/erosion." With the city staying out of the litigation, Contour appealed the decision and won a reversal from a unanimous three-judge panel of the Fifth District. On appeal, Contour argued that the 1990 general plan EIR had to be considered because the mitigated negative declaration was tiered off that EIR. Contour advanced this argument in an attempt to get the court to use the stricter substantial evidence test, which applies to questions of whether a project falls within the scope of a previously certified EIR. Contour sought the substantial evidence test rather than the fair argument test, which is deferential to project opponents who need only provide evidence that a project may have adverse impacts. The court rejected this legal maneuver, finding that there was no evidence the city relied on the 1990 document at all. "The environmental documentation that actually was prepared for the housing project is controlling and Contour is limited to the administrative record that actually was before the city when it approved the MND," Levy wrote. Although Contour was apparently unsure about that administrative record, it actually worked in the developer's favor when the court found almost nothing in the record to support the opponents' contentions. With regard to all three issues identified by the trial court — aesthetics, density and grading/drainage/erosion — the only evidence in the record was vague complaints made by residents of a neighboring subdivision during public hearings. No specifics or expert testimony were offered. "The vague concerns about the housing project expressed by a few members of the public during two public hearings do not constitute substantial evidence supporting a fair argument, even when doubts are resolved in favor of EIR preparation," the court ruled. The court ruled that opponents' could not pursue their argument regarding general plan inconsistency because they never presented such an argument to the city during the review process. The court further ruled that the opponents forfeited their Subdivision Map Act claim because they acquiesced to the trial court's decision, which "impliedly rejected" the claim. The Case: Porterville Citizens for Responsible Hillside Development v. City of Porterville , No. F051953, 07 C.D.O.S. 14050, 2007 DJDAR 18080. Filed November 9, 2007. Ordered published December 6, 2007. The Lawyers: For Porterville Citizens: Richard Harriman, (559) 226-1818. For Contour Development: William Abbott, Abbott & Kindermann, (916) 456-9595.

Like boxers vying for a title, two very different ideas of planning are competing for the future of Alameda Point, a 770-acre community carved out of the former military base next to Alameda, the city. The choice is a 1950s-style bedroom community, all houses and cars and little else, or a mixed-use community in the style of the early 21st century, where higher densities are the trade-offs for premiums in open space and historic preservation. One can almost imagine a public hearing, in which half the room is filled with people who look like the parents in the Dick and Jane books, and the other half resembling the hip, high-tech parents of the "Spy Kids" movies. With much of the former Alameda Naval Air Station a virtual blank slate for homebuilding, city residents are actively debating whether or not to apply Measure A to the area now known as Alameda Point. Approved in 1973, Measure A limits homebuilding in Alameda to either single-family homes or duplexes, period. In an apparent effort to keep density at bay, the measure requires each dwelling unit to be sited on at least 2,000 square feet of land. So much for apartment buildings, much less finding new uses for some fine ex-military buildings, including the Senior Officers' Quarters, which have no viable reuse except as multifamily housing. Like most former military sites, Alameda Point presents tremendous environmental challenges. Large portions of the 1,700-acre peninsula were built on fill, which liquefies during earthquakes. (The base was built during the years immediately preceding World War II, and during the war Alameda was the most important military base on the West Coast.) More than 1,000 acres of the original island are now underwater, and rising sea levels due to global warming may consume more of the coastline. In the central portion of the former base, where the current preliminary design concept locates most of the future home building, much of the groundwater is contaminated. Alameda Point also offers some economic obstacles to developers. Earlier development teams have dropped out of the project, including a partnership that included Shea Homes, Centex Homes and Morgan Stanley. That group had planned to build up to 1,800 homes on Alameda Point. One possible reason for their departure is the military's intention to charge the city $108 million for the ex-military acreage, rather than convey it free of charge, as originally announced. If the city passes that cost along to the developer, as it likely will, that sum could devour much of the developer's profits, unless the developer compensates by developing at even greater density. In May 2007, the City Council briefly considered replacing the first partnership with a venture between Catellus and Lennar. Ultimately, the city selected SunCal, an Irvine-based homebuilder, as the master developer of the 700-acre new community. To date, SunCal has not announced the number of units it intends to build. On the positive side, Alameda Point is almost a blank canvas as a residential community (many of the military buildings have already found new commercial users) and could be a demonstration of forward-looking planning, as well as a notable new source of housing in the Bay Area only a short ride from a BART station. Following some initial design work by ROMA, the local base reuse authority hired influential urban designer Peter Calthorpe to draw up Measure A-compatible and non-Measure-A alternatives. SunCal knows it must tread lightly in any major undertaking, particularly in the Bay Area. So far, SunCal has played its good-neighborhood card skillfully, even if the developer's preference for the denser, single-family-plus-multifamily option can be faintly discerned through all the smiling neutrality. At a PowerPoint presentation made public during a December meeting with Alameda residents, the developer tried to clarify the differences between Alternative A (as in Measure A) and the more progressive Alternative B. Admittedly, these diagrams are little more than land-use maps, but this limited information is still compelling. The most eye-catching feature of the map of Alternative A is how much space must be devoted to home building; the amount of potential park space, although still decent, is reduced drramatically. The preservation of historic buildings is also limited. Alternative B shows the advantages of combining single family homes with multi-family development. The greater intensity of development allows for a greater amount of park space, including what appears to be a green promenade that connects, or nearly so, parks on the both the north and south ends of Alameda Point. The second scheme also has room for neighborhood-serving retail, which the developer touts as environmentally friendly, because residents would have little need to drive elsewhere for basic needs. Alternative B's additional bus stops make it more transit friendly than Alternative A. (A PowerPoint presentation on the two alternatives is available here .) Measure A's notion of a bedroom community is outdated and may not deliver the quality of life that its framers envisioned. The danger of insisting on this literal, picture-book image of suburban life is that the lot sizes of the houses on Alameda Point could grow very small, and, as one local website put it, the result would be cookie-cutter houses on postage stamp-sized parcels. The result would be Levittown, not Mayberry. These comments should not be interpreted as an attack on suburbia or single-family housing. The culprit here is inflexibility, not any type of housing or neighborhood. Single-family housing is indeed desirable, but not in isolation from other forms of housing in a way that would create or enforce segregation by income. The mix of uses is sustainable in Alternative B, because it means that people can shop on foot or bicycle if they desire. Alternative B promotes flexibility and choice – of housing type, of transit mode, of outdoor recreation – and is a reflection of experience and the complexity of actual urban life. Knowledge delivers a knockout punch to nostalgia. Alternative B is the winner.

The California Supreme Court has dismissed a case involving San Diego County's antenna ordinance because the Ninth U.S. Circuit Court of Appeals struck down the ordinance last year. Adopted in 2003, the ordinance created a four-tier system for granting conditional use permits for wireless telecommunications facilities. The level of review and amount of information required depended on the location, visibility and height of the proposed structures. Nearly one year ago, the Ninth Circuit invalidated the ordinance because its discretionary provisions and public hearing requirements ran afoul of the federal Telecommunications Act. ( Sprint Telephony PCS, LP v. County of San Diego , (9th Circuit 2007) 490 F. 3d, 700; see CP&DR Legal Digest , May 2007). Before the Ninth Circuit issued its opinion, the state high court had decided to review a Fourth District Court of Appeal decision upholding the San Diego County ordinance (see CP&DR Legal Digest , August 2006). The Fourth District said the federal Ninth Circuit was getting antenna cases wrong by ruling that localities may not regulate the aesthetics of antennas in the public right of way. But the state Supreme Court said the Ninth Circuit decision in the San Diego County case made moot the state court lawsuit over similar issues. The case is Sprint Telephony PCS v. County of San Diego , No. S145541.

This could become a year of creative financing, and not merely for the state government. Lawmakers are considering at least three bills that could change the rules for financing local infrastructure. The most recently introduced bill, AB 1836 (Feuer), has the potential to be the most controversial. It would eliminate the requirement that two-thirds of voters approve the formation of an infrastructure financing district (IFD) and the issuing of bonds. Instead, the bill would permit the local City Council or Board of Supervisors to create the district, adopt a financing plan and issue bonds for which the district is liable. Much like a redevelopment project, an IFD can divert property tax increment for up to 30 years to pay for public works and replacement housing. Unlike a redevelopment project, an IFD may be created regardless of blight. The other two bills remain from 2007 but appear to be very much alive. One bill is SB 934 (Lowenthal), which would permit the creation of up to 100 "housing and infrastructure zones" to be financed with property tax increment. The money would pay for infrastructure that supports infill development and for new housing. The other measure is AB 1221 (Ma), which would allow local officials to dedicate property tax increment to pay off bonds for infrastructure within transit village development districts. The Assembly passed AB 1221 last year before the measure stalled in the Senate Local Government Committee.

When you've got a $14 billion deficit, everybody's ox is going to get gored. So the question for the planning and development community in California is not really whether something bad is going to happen. The question is whether it matters very much. Gov. Arnold Schwarzenegger has proposed a 10% across-the-board cut in all state spending for the 2008-09 fiscal year. The betting line in Sacramento is that he's not really serious about an across-the-board cut, but only wants to goose the Legislature to come up with creative budget solutions. Here's a prediction: There isn't much left to take away from local governments, so the 2008-09 budget won't have much of an effect on the way the locals view development. The housing market and the general economic slowdown are much bigger concerns. But here's another prediction: There will be a temptation to use the state's ample bond funds to pay for things that might otherwise have come out of the annual budget. That could mean less infrastructure construction, which, in turn, is likely to have a big effect on growth patterns. Let's start with local government funding. During the past 20 years, the state has often balanced its own budget by fiddling around with the allocation of property taxes – giving more to schools and less to cities and counties. On occasion, the state has also taken property tax increment revenue away from redevelopment agencies as part of the same kind of deal. The net effect of practically everything during this period has been to give cities and counties less property tax – and thus increase the trend of "the fiscalization of land use." According to the conventional wisdom – promoted in no small part by yours truly – the less property tax local governments get, the more they must rely on sales tax. Therefore, they compete with one another more intensely to obtain retail stores and repel housing projects. In the last few years, however, this trend has changed. Local governments are getting a lot more property tax from housing than they did even a few years ago. Partly this is because of the so-called "triple flip" budget shift enacted in 2004, in which the state gave the locals more property tax in exchange for some sales tax and also to "backfill" lost car tax revenue. The triple flip, along with the housing market, clearly had some impact on local government decisions. Between 1998 and 2006, housing prices tripled. The rising prices, among other things, increased the market for high-density condos. The combination of higher densities (meaning more revenue per acre), higher home prices (meaning revenue based on new assessments or reassessments), and the triple flip (meaning cities and counties get a greater share of the property tax) greatly improved the fiscal impact of housing on local governments. On top of that is Proposition 1A, the local government-sponsored initiative that passed four years ago. Proposition 1A eliminates the state's practice of balancing the budget by shifting property tax revenue away from cities and counties. The state can "borrow" the funds in a fiscal emergency but must pay the money back eventually. This has given local governments more confidence that they are going to get to keep property tax revenue created by new development. It's changed local government behavior a little – they are more willing to consider housing projects – but the fundamentals of "the fiscalization of land use" haven't really been altered. A Costco is still a much better deal for a city than anything else. At any rate, it is unlikely that the state will balance the budget this year by stripping local governments of their property tax money; and so it's unlikely that anything in the state budget mess will affect how the locals approach land use – at least compared with the past. The only exception might be if the state declares a fiscal crisis, which would give Sacramento the power to borrow property tax money as well as transportation funding otherwise guaranteed under Proposition 42. The state would have to pay this money back sooner or later – but that may not stop the legislators and the governor from taking it now. But there's another subtle – even insidious – trend developing in Sacramento, and that has to do with how the bond money is spent. The general fund may be bleeding red by billions of dollars, but at the same time the voters have approved many tens of billions of dollars in bonds to pay for capital projects, mostly for schools, roads, parks and flood control projects. There's a relationship between the budget deficit and the bonds, of course. When voters approve state bonds, they are not voting for a tax increase, as they are when they vote in favor of local bonds. Rather, they are voting to pre-allocate a small portion of the state general fund to make the bond payments. This is not the main reason that there's a budget deficit, but it's a contributing factor. The state pays for infrastructure projects – and other planning and development related projects – two different ways. Sometimes the money comes on a "pay-as-you-go" basis from the general fund or special tax sources, and sometimes it comes from bond money. During hard budget times, it can be very tempting for the state to use the bond money instead of tax revenue. For example, after Proposition 46 passed in 2002, the state quietly began to use bond money to pay for some housing programs that had previously been paid for out of the general fund. It is worth noting that with gas tax revenue down, the state's transportation funds are nearly empty. It seems likely that the state will start using bond funds more frequently for things that used to be paid for out of the annual budget. That means less infrastructure investment from the state government, which will put more burden on the locals and developers to figure out how to accommodate new growth. So the game may be changing. It's less about "what they take from us," which has been the local governments' mantra the last few years. The concern of local governments is how they handle what is coming their way. That may not be a problem in a year when nobody is building much of anything. But it is likely to be a problem down the line.

It's difficult to believe that CEQA case law could get more complicated. But it can, according to land-use lawyers who spoke at last week's UCLA Extension Land Use Law and Planning Conference. During the last 12 months, Courts of Appeal have published about 25 California Environmental Quality Act cases — a huge increase from recent years. No fewer than seven published cases dealt with the definition of a "project" under CEQA, according to Michelle Ouellette and Whit Manley, two leading CEQA attorneys at UCLA conference. This simply amazes me: 38 years after Ronald Reagan signed CEQA, and 36 years after the state Supreme Court issued its first CEQA decision, we're still arguing about which government activities are subject to environmental review. Neither Ouellette, of Best, Best & Krieger in Riverside, nor Manley, of Sacramento's Remy, Thomas, Moose & Manley, could explain the courts' sudden willingness to publish CEQA decisions at the rate of about one every two weeks. In recent prior years, courts have published in the neighborhood of 10 to 15 CEQA cases. But Ouellette and Manley did have some interesting observations: • The large number of cases concerning the definition of a "project" under CEQA suggests that local agencies are trying to avoid the environmental review process, Manley said. What's more, courts appear willing to let public agencies start down a path without applying CEQA if an agency promises to perform environmental review eventually and the agency maintains absolute discretion over the matter. Manley himself lost one of the cases, Friends of Sierra Railroad v. Tuolumne Park and Recreation Dist. , (2007) 147 Cal.App.4th 643, in which the court ruled that a park district's land swap with an Indian tribe was not a project because not enough was known about the tribe's plan for the land it wanted. Manley said everyone knows the tribe wanted the park district land for a casino. But the court said not enough was known about the casino project to commence environmental review. Ouellette said the "project" rulings suggest that if an agency uses lots of "weasel words" in its documentation, the agency may be able to avoid early CEQA review. • On the other hand, a court slammed the City of West Hollywood for delaying CEQA review of a project that involved a small housing development and re-use of an historic structure. Even though the city had certified an EIR by the time the Court of Appeal decided the case, the court said the EIR wasn't good enough and the city had to do it over, explained Ouellette, who was clearly astonished at the decision in Save Tara v City of West Hollywood . But the decision might not matter, because the state Supreme Court has accepted the case for review. (We wrote about both Friends of Sierra Railroad and Save Tara several months ago.) • Courts are showing more willingness than ever to engage in careful examination of environmental impact reports and the administrative record, according to Manley. Project opponents are winning these cases, even when there is "substantial evidence" supporting the agency's decision, he said. - Paul Shigley

A slew of land use issues are converging on Stockton, an older Central Valley city that is simultaneously struggling to revitalize its downtown and deal with a political environment that is both pro-growth and environmentally conscious. Stockton recently adopted a new general plan that permits expansive growth, at the same time that the city has invested roughly $200 million in a downtown revitalization effort that has yet to take off. City leaders have long been unabashedly pro-growth, yet environmentalists and farmland preservation advocates do have a voice. Stockton has provided a great number of housing tracts for Bay Area and Sacramento commuters, which recently resulted in Stockton having one of the highest foreclosure rates in the country. The City Council voted to ban new big-box stores only after Wal-Mart opponents exposed the city's awkward steps to approve a Wal-Mart where apartments had been planned. If all that were not enough, the city has an image problem. A recent National Research Center study ranked Stockton 230th out of 231 cities for quality of life. The ranking was based on a survey of Stockton residents, only 30% of whom rated the quality of life as good or excellent. "Obviously, we have some work to do," Ed Chavez, the mayor and former police chief, told the Record newspaper. It may not be entirely fair to tell a city's story via litigation. However, two recently filed lawsuits and three court decisions paint a picture of the issues Stockton faces, and how the city is dealing with them. General Plan The City Council in December concluded a sometimes-contentious, five-year process by adopting a comprehensive general plan update that could accommodate a doubling of Stockton's population to about 600,000 by 2035. The general plan, which replaced a 1990 plan, emphasizes growth in a series of new villages, primarily on the north and south edges of town. By providing for housing, retail uses, services and offices in fairly close proximity to each other, the villages may encourage a different style of development than the single-family housing tracts and power centers that have dominated Stockton development patterns. "We've ratcheted up the requirement for density by about 20%," said David Stagnaro, the city's planning manager. "We're really shooting for 6 1/2 to 7 units per acre." The plan mandates the incorporation of separated bike and pedestrian paths to encourage village residents to make short trips without driving, Stagnaro explained. Still, some of the villages could be quite large — as many as 25,000 to 30,000 people — so retail and services need to be sized accordingly, he said. Besides, allowing for extensive greenfield development, the plan also calls for continuation of a two-year-old program aimed at revitalizing older districts, Stagnaro said. Overall, the general plan anticipates up to 24,000 new infill housing units, including 4,000 units in or adjacent to downtown. To encourage infill, the city has cut in half building permit fees in redevelopment project areas. The city also is considering reducing impact fees for infill development. Environmentalists and farmland preservation advocates tried to rein in Stockton's expansive growth ambitions but made little headway. The City Council did eliminate a proposed growth area east of Highway 99 and adopted a last-minute measure promising to "aggressively combat climate change" with land use planning. The council also made a late concession to A.G. Spanos Company by striking language that would have discouraged construction of a multi-screen cinema outside of downtown, even though the city has had such a policy in place to protect a 16-screeen downtown movie house. Spanos reportedly has plans for a large cinema in a shopping center on the north end of town. In January, the Sierra Club and the Morada Area Association (a group of unincorporated area landowners) filed lawsuits over the general plan and its environmental impact report. The Morada lawsuit argues that the city has not made adequate provisions for water and, as a result, the city may deplete groundwater resources on which the Morada homeowners rely. The Sierra Club lawsuit is much broader and attacks the general plan and the EIR's handling of climate change, traffic, growth inducement, housing, air quality and traffic. "Over 50% of the new development would occur on the outskirts of town, and that would create a host of impacts on traffic and air quality," said Amy Bricker, of Shute Mihaly & Weinberger, which is representing the Sierra Club. Stagnaro said the plan does not address climate change directly because the city is awaiting direction from the state. "Each city shouldn't be doing things independently for reducing CO2. It's an ad-hoc way of doing things. There should be some leadership from the state and federal and international bodies," Stagnaro maintained. "There should be some uniformity." Even so, Stagnaro noted that the general plan calls for all new municipal buildings to be LEED certified. Plus, he said, the city since the early 1990s has collected air quality fees from builders to fund bike lanes and alternative fuel city vehicles. Downtown Redevelopment Since the 1990s, Stockton has pressed ahead with downtown redevelopment more aggressively than all but a few California cities. One of the results is a restored waterfront lined with a new minor league baseball stadium, a new multi-use arena, a 180-room hotel that opened in November, and a 10-acre park with an open-air event center (see CP&DR Local Watch , December 2006; Economic Development, July 2001). In the works now are a $25 million marina and waterfront promenade extension funded primarily with state and federal grants, and the city's acquisition for $35 million of the eight-story Washington Mutual building that serves as a downtown anchor. WaMu is pulling out of Stockton, and the city intends to use most of the 250,000-square-foot building for city government offices. In addition, San Joaquin County is building a $110 million administrative office building, and a $230 million county courthouse is planned. The city has struggled, however, to attract private investment. One of the reasons, according to city officials, is the lack of readily available development sites and a parking shortage. Partly to address those issues, the city recently decided to demolish seven single-room occupancy (SRO) hotels to provide surface parking in the short-term, and building sites for the future. The decision drew a lawsuit from a group called Save Old Stockton (SOS). The lawsuit contends the city violating the California Environmental Quality Act (CEQA) by committing to the project before undertaking environmental review. The organization would like to see the hotels preserved and adapted to new uses, said Joy Neas, of SOS. "Our goal is for downtown to be an historic district with a restored Main Street and heritage tourism, with continued reinvestment for preservation from the city," Neas said. But the lawsuit frustrates Redevelopment Director Steve Pinkerton. "These are just decrepit, old, turn-of-the-century, working-man hotels," he said. They served as part of Stockton's huge skid row from the Depression until recent years, when the city bought the SRO hotels and began closing them down. "The folks who are suing us do not have businesses downtown," Pinkerton complained. Paul Rapp, chairman of the city's Cultural Heritage Board, said at least four of the structures may be worth saving. The city agreed to further investigate three of the structures, but only one of which the Cultural Heritage Board says might be worth preserving. "As far as them being too far gone, I think the city is using a blanket statement," said Rapp, who is not involved in the litigation. "We just want the council to explore housing, mixed-use, whatever the market will bear." Hotel Stockton One of the most high-profile redevelopment projects involves reuse of the Hotel Stockton, a landmark that was a center of activity for decades before it closed nearly 20 years ago. Today, the upper floors contain about 150 apartments for senior citizens, while offices and a much-anticipated new restaurant (scheduled to open in March) are going in on the ground floor, according to Pinkerton. But the project has had its setbacks, including a falling out with an earlier developer. In December, the state Supreme Court ruled unanimously for the city in the dispute, finding that developer Civic Partners Stockton, LLC, should have filed a claim for damages with the city before pursuing litigation. Although the court said the developer could still file a claim, such a move seems like a long shot now. The Stockton Redevelopment Agency originally signed two agreements with Civic Partners in 2000 — one for rehabilitation of Hotel Stockton and one for construction of a multi-screen cinema next door. By early 2002, though, the agency was dissatisfied with the progress Civic Partners was making. So the agency handed over the project to a development team headed by Sacramento's Cyrus Youssefi. Contending that the city improperly reneged on the contracts and agreements to reimburse expenses, Civic Partners sued the redevelopment agency for breach of contract, and sued the city and Youssefi for interfering with the contracts. In 2004, a trial court judge ruled the lawsuit could go forward. However, the Third District Court of Appeal ruled against Civic Partners because it never submitted a claim for damages to the city or redevelopment agency, as required by the Government Claims Act. At the state Supreme Court, Civic Partners attorney Malcolm Misuraca argued that breach of contract claims are exempt from the claim requirement. But a unanimous state high court disagreed. "Contract claims fall within the plain meaning of the requirement that ‘all claims for money or damages' be presented to a local public entity," Justice Carol Corrigan wrote. Filed December 3, the case is City of Stockton v. Superior Court , No. 139237, 2007 DJDAR 17723. Overly Aggressive Redevelopment? Stockton's victory at the state Supreme Court followed by one month a sharp rebuke from the Third District Court of Appeal in another case involving downtown redevelopment. This lawsuit was filed by the Wong family, which owns two downtown parcels, one of which contained an old hotel and one of which was a surface parking lot. During the late 1990s, the city began a code enforcement crackdown on downtown property owners, including the Wongs. The city ordered the property owners to demolish the building. When they refused, the city tore down the structure and ripped apart the parking lot in January 2001. In September 2005, the Wongs filed suit, seeking compensation for inverse condemnation. A San Joaquin County Superior Court Judge dismissed the suit, but the Third District reversed the lower court and reinstated the suit. The city contended there was no taking (or inverse condemnation) because it demolished the building and parking lot pursuant to the city's police power. The Wongs countered that the city razed the building and removed the parking lot in order to diminish the property value so the city would not have to spend as much when taking the property by eminent domain. The court did not rule on the merits of the lawsuit, but it clearly sympathized with the property owner. In an unpublished opinion, the court said the city had wrongly denied the Wongs the ability to remedy the alleged code violations " here are no facts to support a legal determination that the demolition was a lawful exercise of the city's police power," Justice Coleman Blease wrote for the court. Instead, the court said, the "city created an inventory of cheaper raw land available for redevelopment and avoided having to pay for existing improvements in eminent domain. … Less drastic means could have been employed to correct the dangerous conditions." The case is Wong v. City of Stockton , No. 053601. The unpublished decision was filed on November 5, 2007. Big-Box War Last year, the Stockton City Council adopted a policy prohibiting new stores that exceed 100,000 square feet and also sell groceries, with the exception of membership stores. The policy essentially outlaws Wal-Mart Supercenters and SuperTargets, and it caused the city to drop out of litigation over a Wal-Mart Supercenter proposed by Spanos in the north part of town. Still, Spanos fought the lawsuit filed by a group called Stockton Citizens for Sensible Planning. In late November, the Third District ruled for the Wal-Mart opponents. In 2002, the city approved a master development plan for the 560-acre Spanos Park West. The plan listed multi-family residential development as the primary use of four parcels consisting of 43 acres. The plan envisioned 935 multi-family residences on those parcels. Instead, less than two years later, Spanos sought permission to build a 207,000-square-foot Supercenter on 22 acres designated for residential development. In a December 15, 2003, letter labeled "status report," the city's community development director said the proposed Wal-Mart was in compliance with the master plan. Spanos then requested, and apparently received permission, to transfer its obligation to build 627 residential units to anywhere else in town. In February 2004, the city filed a notice with the county clerk that the Wal-Mart decision was a ministerial action not subject to environmental review. Not until July 2004 did Wal-Mart opponents file their suit. They argued that they were unaware the city had made any decision until Wal-Mart filed an application for a liquor license. Spanos and the city argued that the lawsuit was filed after the statute of limitations had expired — an argument rejected by a trial court and by the Third District. In a 2-1 decision, the appellate court panel determined that the statute of limitations never commenced because there was no valid project approval. The court found that the director's non-public decision on the Wal-Mart violated the master development plan, violated the limited authority delegated to him by the city, and "violated the provisions of CEQA that preclude the delegation of a public agency's authority to review a project that may have environmental consequences." In a dissenting opinion, Justice George Nicholson said the statute of limitations started running when the city filed the notice of ministerial approval, so the opponents filed their suit too late. The ruling combined with the city's new big-box limitations appear to eliminate the possibility of a Wal-Mart Supercenter at the Spanos development. Published on November 28, 2007, the case is Stockton Citizens for Sensible Planning v. City of Stockton , No. C050885, 2007 DJDAR 17567.

Courts have issued four recent court decisions regarding eminent domain that suggest that acquiring property through eminent domain is an increasingly costly prospect for the government. None of the four decisions addressed whether the government had the right to take the property in question. Rather, the cases dealt with procedure and valuation: • A state appellate court ruled that the valuation date of condemned land was delayed because the government agency deposited "substantially less" than probable value when filing condemnation proceedings, resulting in a larger award to the property owner. The decision appeared to erase a bright-line rule established last year by the state Supreme Court. • An appellate court rejected a business's request for relocation payment because the business filed its claim too late. However, the court may have eased the process by which property owners seek relocation expense reimbursement. • An appellate court overturned an award of attorney's fees to a property owner because the court found that the public agency did not abide by the advice of its appraiser, who apparently made a number of errors. • A San Diego County jury awarded a property owner $26.5 million for Caltrans' taking of 2.8 acres of vacant land needed for a State Route 905 freeway project. The award included $25.2 million in damages because the jury found that Caltrans' taking eliminated development potential on the property owner's remaining 55 acres, and the taking cost the property owner an earlier potential business deal. Perhaps the most important decision is the one regarding valuation dates. In 2007, the state Supreme Court ruled the valuation date in a "quick take" proceeding is the date on which the government agency deposits probable compensation with the court, even though that date might be months or years before commencement of a trial. ( Mt. San Jacinto Community College District v. Superior Court , (2007) 40 Cal.4th 648; see CP&DR Legal Digest , April 2007 ). The distinction in dates is important because it can mean a great deal of money during times of rising real estate values. Although the state Supreme Court appeared to establish a bright-line rule, the Fourth District Court of Appeal declined to apply it in a case from San Diego. In September 2001, the San Diego Metropolitan Transit Development Board (MTDB) filed a complaint in eminent domain against RV Communities and deposited $79,000 as the probable amount of just compensation. The MTDB sought about an acre of property for the Mission Valley East trolley line, plus a 50,000-square-foot temporary construction and grading easement, and a 5,000-square-foot drainage easement. RV Communities filed a counter-suit and there was extensive procedural activity before RV Communities in February 2003 asked that the deposit of probable compensation be raised to $300,000. The board deposited the money and the trial began. First, San Diego County Superior Court Judge Thomas Lavoy ruled that MTDB had taken 20,000 square feet by inverse condemnation because of grading. A jury then considered the valuation issues and ultimately awarded the property owner $1.1 million for the directly condemned land, $576,000 for land taken by inverse condemnation, $140,000 for the temporary construction easement, $78,000 for the drainage easement, and $470,000 in severance damages for the loss of future use of the property — a total of nearly $2.4 million. On appeal, MTDB argued that the trial court had improperly changed the date of valuation from September 2001, when the board deposited probable compensation, to February 2003, when the trial started. During the interim, property values skyrocketed in San Diego. In a 2005 decision, the Fourth District Court of Appeal, Division One, upheld the lower court. However, the state Supreme Court ordered the appellate panel to reconsider in light of Mt. San Jacinto . The Fourth District did so, but did not change its conclusion. " Mt. San Jacinto is distinguishable from the instant case because here it is undisputed that MTDB's deposit was substantially less than the probable amount of RV's just compensation for the condemned property," Justice Richard Huffman wrote for the court. Instead, because the amount the board deposited was less than one-third the amount awarded for the condemned land, it was as if there had been no up-front deposit of probable compensation, the court found. Moreover, the board's own appraiser conceded that the original deposit should have been $300,000, not $79,000, and MTDB did not deposit the larger amount until just before the trial commenced. " f under the circumstances of a particular case, using the valuation date prescribed by law for condemned property will not satisfy the constitutional requirement of just compensation, the court has inherent authority to use a valuation date that will satisfy that constitutional requirement," Huffman wrote. While the government lost the San Diego case, it won one from Hawaiian Gardens — for the most part. In 1993, the Hawaiian Gardens Redevelopment Agency acquired a Plowboy grocery store under threat of eminent domain. Two years later, the Plowboy store closed. At about that time, Bi-Rite Meat Provisions, which operated a specialty meat and fish market within Plowboy, filed an inverse condemnation suit against the redevelopment agency as a result of Bi-Rite's displacement. In 1996, a jury awarded Bi-Rite $800,000 for loss of goodwill, and the city agreed to pay another $93,000 to compensate Bi-Rite for immovable property and improvements. The city paid the money in full on July 6, 2000. Plowboy and Bi-Rite eventually opened a new store in Fountain Valley in May 2003. Bi-Rite sent the redevelopment agency a number of letters regarding relocation reimbursement and in late 2004 sued. The agency contended Bi-Rite sought reimbursement too late, and a trial court judge agreed. On appeal, a three-judge panel of the Second District, Division Seven, wrestled with the administrative record before concluding that a September 2004 letter from Bi-Rite substantially complied with the statutory claim procedure requirement. But the letter was too late, the court ruled, because a claim for relocation expenses must be filed within 18 months of final payment of judgment (January 6, 2002) or 18 months from when the claimant moves out (about April 1997). That part of the ruling was not a major surprise. However, the court's determination that a September 3, 2004, letter to the agency "substantially complies with the claim procedure" appeared to break new ground. Typically, a claimant must file forms specifically created to begin the process. An analysis by Nossaman, Guthner, Knox, Elliott attorneys Karen McLaurin and Kathlynn Smith said, "After this decision, agencies must be aware that correspondence sent to them on behalf of a displacee may be construed as a ‘claim' under the state relocation assistance program if it sufficiently describes the claim and the basis for it." The third case involved attorney's fees. The Long Beach Redevelopment Agency used eminent domain to acquire about an acre and a half of land owned by Lewis and Nancy Morales. The agency's appraiser valued the property at $2 million; the agency ended up offering $2.7 million. The Moraleses demanded $3.5 million. In 2005, a jury settled on $3.45 million as just compensation. The property owners then sought attorney's fees, which the court awarded. The agency appealed, and the Second District, Division Four, threw out the award. Typically, the court noted, attorney's fees are awarded in eminent domain cases where the government offers less than 60% of the jury's verdict. Attorney's fees are not awarded where the government offers more than 85% of the eventual verdict. In this case, the public agency offered about 78%, so it fell in a gray area. The trial court and the property owners said errors by the agency's appraiser provided evidence of a lack of good faith, care and accuracy, and, therefore, attorney's fees were warranted. But what mattered, the Second District ruled, was the actual offer from the agency's board, not the appraiser's recommendation. "The court was required to evaluate the good faith and accuracy of the agency in formulating its final offer," the court ruled. "It was not called upon to evaluate the agency's appraiser or his early appraisals, particularly where the agency rejected his recommendation and independently formulated its final offer." The Second District returned the case to the trial court for reconsideration of attorney's fees. The final case was decided only at the trial court level, but it has already gained attention because the jury's award so far exceeded the government's offer of compensation. It involves Caltrans's acquisition by eminent domain of 2.8 acres in Otay Mesa from Anderprises, Inc. for the 905 freeway. In 2006, Caltrans offered $172,000 for the vacant land. The property owners argued that Caltrans had delayed the project for nine years, costing them rental income from a trucking company, which reportedly backed out of a deal because of the potential freeway. The landowners also argued that Caltrans' condemnation would make their property worthless because the new freeway would cut off the property's only access to a public street. Caltrans countered that the property is zoned for open space and has alternative access. In late December, a jury awarded Anderprises $1.3 million for the land, $5.1 million for lost rent due to Caltrans delays, and $20.1 million in severance damages for leaving Anderprises with a landlocked 55-acre parcel, which the property owner argued could have been developed. The agency said it would appeal. First Cases: San Diego Metropolitan Transit Development Board v. RV Communities , D042545, 07 C.D.O.S. 14656, 2007 DJDAR 18826. Filed December 21, 2007. The Lawyers: For MTDB: Bruce Beach, Best, Best & Krieger, (619) 525-1300. For RV Communities: Charles Bird, Luce, Forward, Hamilton & Scripps, (619) 236-1414. Second Case: Bi-Rite Meat Provisions Co. v. Redevelopment Agency of the City of Hawaiian Gardens , No. B190481, 07 C.D.O.S. 13267, 2007 DJDAR 17181. Filed October 24, 2007. Ordered published November 19, 2007. The Lawyers: For Bi-Rite: Tina Sibbit, (505) 841-6729. For the agency: Linda Daube (707) 578-9530. Third Case: Redevelopment Agency of the City of Long Beach, California v. Morales , No. B190552, 07 C.D.O.S. 13567, 2007 DJDAR 17541. Filed November 28, 2007. Modified December 18, 2007 at 2007 DJDAR 18571. The Lawyers: For the agency: Don Mike Anthony, Hahn & Hahn, (626) 796-9123. For Morales: Samuel Salmon, (562) 430-2800. Fourth Case: State of California v. Anderprises, Inc. , San Diego County Superior Court No. GIC 865762. The Lawyers: For the state: Glenn Mueller, Caltrans, (619) 645-2412. For Anderprises: Vincent Bartolotta Jr., Thorsnes, Bartolotta & McGuire, (619) 236-9363.