Search Results

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.

California's Sacramento-San Joaquin Delta region produces many things: more than $650 million worth of agricultural products annually; billions of gallons of fresh water for cities and farms; recreational opportunities that generate millions of dollars for the region's communities. It also generates studies, reports and white papers. Truckloads of them. The largest estuary on the West Coast is one of the biggest ecological train wrecks in the nation, the focal point of a tectonic smash-up between human needs and natural dynamics. In consequence, it also has become perhaps the most-studied and squabbled-over body of water in the West. Task forces, commissions and think tanks concerned about the Delta have cranked out enough legal briefs, policy papers, scientific reports and newspaper op-ed pieces over the past two decades to fill a library. The latest contributions to that voluminous body of work, the final report of a governor-appointed "Blue Ribbon Task Force," hit the streets in December, calling for a fundamental reshaping of the way California manages the Delta. That report was issued at about the same time a federal judge issued his final decision in a case that will result in significant reductions this year in Delta water diversions. Those milestones were followed, in turn, by new scientific assessments warning — again — of imminent ecological disaster in the Delta's convoluted waterways. Ecological warning bells and buzzers have been going off so continuously and for so long in the Delta that they've taken on the quality of blaring car alarms in a congested urban neighborhood: part of the background noise, ignored by passers-by even though they're loud enough to wake the dead. But there's a good chance that 2008 will be the year, after more than a decade of policy paralysis, that California finally responds in a comprehensive and pragmatic way to the Delta alarms. The Delta matters to California for many reasons, principal among them the region's role as a linchpin in two water-supply systems: the State Water Project (SWP), which pumps water from the Delta and sends it on its way to more than 20 million urban users in Southern California, and the Central Valley Project (CVP), which also pumps water from the Delta and delivers it by canal to irrigate several million acres of San Joaquin Valley farmland. Bay Area communities also rely heavily on Delta water, as do farmers cultivating about 600,000 acres in the Delta region itself. And the Delta is at risk, as numerous reports have detailed over the past decade. Salt and pollutants threaten water quality. Most of the land in the Delta is below sea level and sinking, at the same time that sea level is rising. The 1,100-mile network of earthen levees protecting farms, pumping plants and other critical systems is poorly built and poorly maintained. If the levees fail — and the Department of Water Resources concedes there is a two-in-three chance of multiple simultaneous failures during the next 50 years — it could halt water exports and cost the state as much as $40 billion. The native Delta ecosystem also appears to be collapsing, with several species continuing to decline despite years of study and an investment of millions of dollars in ecological restoration in the Delta and the rivers that feed it. Invasive species are believed to be partly responsible for the decline of native flora and fauna, along with pollution and climate change. But experts also point a finger at the operation of the SWP and CVP pumps, which suck up and kill fish directly, and which alter water flows to such a degree that fish become fatally confused trying to make their way between upstream tributaries and the sea. The magnitude and persistence of that ecological trauma was underscored in early January by a pair of scientific reports. The first, issued January 9, found that populations of three key Delta fish species — longfin smelt, Sacramento splittail and American shad — plummeted to record lows last year, while two others (Delta smelt and striped bass) reached near-record lows. The data were gathered during the fall trawling survey conducted by the California Department of Fish and Game. The second report, issued a week later, found the number of salmon returning to spawn in the San Joaquin River basin continuing to dwindle, dropping from 5,672 fish in 2006 to 1,158 adult salmon in 2007, according to the environmental consultant FishBio. Over the past seven years, counts on the Stanislaus River have dropped from 8,498 salmon in 2000 to 405 last year. There have been numerous efforts over the past two decades to better balance California's demand for Delta water with the ecological needs of the fish and wildlife species that live there, starting with the 1994 ratification of the Bay-Delta Accord. That agreement committed the state and federal governments to a collaborative process known as Cal-Fed, which funneled hundreds of millions of dollars into ecological restoration projects but failed in its primary — and perhaps unachievable — goals of boosting fish populations while simultaneously improving water quality and stabilizing the export supply. The Cal-Fed accord broke down amid escalating concerns about the failure of the ecosystem investment to produce tangible gains, as well as a growing frustration among urban and agricultural water interests over the lack of progress on increasing water yields from the system. That impasse became starkly visible during the 2007 legislative session, when proposals for bond measures to finance system improvements stalled during bitter arguments between Democrats and Republicans over how much money should be spent on dams and reservoirs, and who should foot the bill. But 2008 is shaping up as the year the logjam may finally be broken, and it has nothing to do with any sudden outbreak of cordiality among the battling parties. Instead, it is more likely to be the result of desperation. In December, U.S. District Court Judge Oliver Wanger finalized an earlier ruling ordering a significant reduction in Delta pumping to protect the threatened Delta smelt. As a result, SWP contractors are likely to lose as much as a third of their allocations this year, coming amid the likely continuation of below-normal precipitation that will further reduce supplies. Lofty rhetoric and good intentions have done little to solve the Delta crisis. But rationing, skyrocketing water bills and thousands of acres of fallowed farmland may just provide the incentive California's leaders need to finally make the hard decisions they've been putting off for nearly 20 years. Resources: Governor's Delta Vision Blue Ribbon Task Force report: http://www.deltavision.ca.gov/ Department of Fish and Game trawl data: http://www.delta.dfg.ca.gov/data/mwt/charts.asp Judge Wanger's decision in Natural Resources Defense Council v. Kempthorne, No. 1:05-cv-01207-OWW-GSA: http://www.earthjustice.org/library/legal_docs/delta-smelt-final-remedy-order.pdf

The California housing market crashed during 2007, and only true optimists and a handful of industry groups predict a turnaround this year. The halcyon days of the housing boom already seem like a long ways away. But while the downturn has reached nearly every corner of the state, some markets are stronger than others. In particular, exurban markets are weak, while urban markets focused on infill development are relatively strong. While the single-family market was starting to slip, multi-family construction held steady during 2006, accounting for 35% of all new housing starts, compared with 26% during 2005. Once the final numbers are in, multi-family units may have accounted for as much as 40% of total housing starts during 2007. According to market analysts, economists and planners, there are number of conclusions to draw, and interesting trends to watch for: • The downturn has been most significant in what had been the fastest-growing locations, mostly on the metropolitan fringes and in the Central Valley. • Construction of multi-family units (condominiums, townhouses and apartments) has not fallen off as sharply as single-family house starts. • Many national homebuilders have bailed out of Central Valley markets that they flooded with new houses as recently as two years ago. These builders are dropping unit prices, selling off land, and not starting new subdivisions. • Small, infill projects continue to go forward with and without government subsidies. • A sharp decline in land prices means that some builders are moving toward much smaller houses that are affordable to first-time buyers. • Entitlement activity is mixed, with some jurisdictions continuing to process as many applications as ever, while other jurisdictions report applications slowing. • The market has slipped little in desirable locations. First, a few important numbers: Housing starts for all of 2007 were about 116,000 units — down nearly 100,000 units from the peak of 2004, according to the California Building Industry Association (CBIA). The median price for single-family and multi-family units in California sank to $402,000 in December 2007, according to DataQuick Information Systems — a drop of 17% in less than one year. December was the slowest month for home sales since most outfits began keeping records. "It's very hard to know how bad this is until we see how far prices are going to drop," said Jed Kolko, an economist with the Public Policy Institute of California. During the recession of the early 1990s, housing prices fell about 20% in the Los Angeles area, he noted. Most of California has not seen a 20% decrease yet, although the California Association of Realtors (CAR) reports prices have dropped approximately 20% in the high desert, the Santa Maria-Lompoc area and the Sacramento region. Interestingly, CAR in October stopped reporting the median price for the San Joaquin Valley, where some builders have taken to auctioning new units. At the same time, prices in Santa Clara, San Mateo, San Francisco and Marin counties have either stayed the same or even increased. "There is a lot of geographic variation," Kolko said. "There are areas that are much harder hit than others." "It's pretty amazing what has happened," said Alan Nevin, chief economist for the CBIA. In the industry group's official 2008 forecast released in early January, Nevin predicted a modest uptick in residential building activity, mostly during the second half of the year. "There is life in spots," Nevin told CP&DR . Downtown San Francisco and San Diego, for example, remain very strong markets, he said. "We're going to see a lot of new, small projects and, from an aesthetic standpoint, I think that's nice," Nevin said. "All of the guys that got fired by the national public builders have decided to become developers on their own, and they have decided to do small, infill condominium projects." These projects are typically four to eight units apiece and are located in coastal urban areas, said Nevin, who pointed to several such projects in San Diego. "The difference," he added, "is total value, because all of these little projects in San Diego don't add up to one big high-rise." While Nevin predicts high-rise condo development will virtually cease in 2008, some jurisdictions — notably Los Angeles , Long Beach and Glendale — have continued to approve new residential towers. In Long Beach, all new housing is an infill or redevelopment project. In the last three months, developers have completed about 300 units, most of which are for-sale condominiums, according to city Planning and Building Director Craig Beck. More than 800 units of affordable housing are scheduled to come online this year, and roughly 400 to 500 more units of housing supported by the city's redevelopment agency are scheduled for construction over the next 12 to 15 months, he said. The demand for affordable units in Long Beach and almost everywhere else appears limitless. Of keen interest to Beck and other observers are two luxury condominium towers developed by Intracorp on Ocean Boulevard in downtown Long Beach. Sales have closed on about three-fourths of a 132-unit tower, which was completed in late 2007, Beck said. Intracorp reports that the second, 114-unit tower is 60% "pre-sold." The second tower is scheduled to be complete in March. "I think they are going to be a very interesting market study," Beck said. Long Beach is currently processing applications for another 3,500 residential units, only about 100 of which are single-family houses, Beck said. However, developers have withdrawn four higher-end downtown condo projects, including Molasky Pacific's proposed Oceanaire project. With towers of 45 and 55 stories, Oceanaire would have been the tallest buildings in Long Beach. In some urban locales, notably the East Bay and the Inland Empire, land prices have dropped dramatically. With lots available for $100,000 less than a year or two ago, builders are able to build 1,500- to 2,000-square-foot "starter" homes, rather than 3,000-square-foot monsters that were needed to recoup land costs, according to CBIA leaders. Nevin predicted that very few builders would pursue large speculative tracts and instead would build on an almost custom basis. "That most certainly in not the M.O. of the major public builders," Nevin said in the CBIA forecast, "but if they want to remain in the state, they will have to adapt to its quirky markets." During the housing slump of the 1990s, state lawmakers passed a measure automatically extending the life of subdivision maps for two years. The CBIA has requested similar legislation this year. The group is also asking lawmakers to pass a measure permitting builders to delay the payment of impact fees until the certificate of occupancy stage, and to streamline environmental review of new housing. Thus far, the Legislature has shown minimal interest in the CBIA agenda, but that could change if the housing slump drags on.

An appellate court has blocked a controversial subdivision at the eastern base of Mt. Whitney because the project's environmental impact report did not adequately consider a potential land swap between the developer and the Bureau of Land Management. The court agreed with project opponents that the EIR lacked details necessary to determine that the land swap was an infeasible project alternative. " his EIR includes only the barest of facts regarding the BLM parcel, vague and unsupported conclusions about aesthetics, views and economic objectives, and no independent analysis whatsoever of relevant considerations," the court ruled. The court rejected opponents' arguments that the EIR's project description was inadequate, and that the study failed to analyze potential impacts on rare species and aesthetics. The project has been a lightening rod since landowner Jim Walker proposed it. In 2004, Walker, a Loma Linda University professor and Sierra Club member, purchased a 125-acre ranch on either side of Whitney Portal Road, roughly four miles west of the Inyo County town of Lone Pine. The ranch is bordered on three sides by public land, and there is no significant development within three miles. Environmentalists called the project "leapfrog development" that would mar a landscape visited by tens of thousands of people every summer. Still, the property is zoned rural residential with 2.5-acre minimum lot sizes. Walker proposed a 27-lot subdivision on 74 acres on the south side of Whitney Portal Road. The Planning Commission certified an EIR for the project and approved the subdivision in May 2005. Two months later, the Board of Supervisors denied an appeal from a group called Save Round Valley Alliance (SVRA) and approved the project. The SVRA sued, arguing that Inyo County failed to comply with the California Environmental Quality Act. Shortly thereafter, Walker and his opponents faced off when Walker began grading the site, apparently without proper permits. Walker halted construction pending a court decision. In May 2006, retired appellate court Justice Harry Brauer, sitting by assignment to Inyo County Superior Court, ruled against SVRA. On appeal, a unanimous three-judge panel of the Fourth District Court of Appeal, Division Two, overturned Brauer on the issue of project alternatives. During the environmental review process, BLM Field Manager Bill Dunkelberger said the agency might be willing to swap a 100-acre parcel adjacent to the Alabama Hills subdivision, about three miles away from Walker's land, for the 74-acre development site. But Dunkelberger worried that it was late in the entitlement process and that Walker was not interested. The final EIR concluded this project alternative was environmentally superior but infeasible. The Fourth District, citing Laurel Heights Improvement Assn. v. Regents of the University of California , (1988) 47 Cal.3d, 376, 404, found that the EIR did not disclose "‘the analytic route the agency traveled from evidence to action.'" The EIR said the land swap alternative was infeasible because the BLM parcel was not designated for residential development, the quality of the BLM parcel was inferior "due to aesthetic/view reasons," and the developer could not achieve the same economic objectives with the BLM parcel as with his own land. The court said the BLM parcel could be rezoned, the conclusion regarding aesthetics was based solely on the developer's input, and the fact that the developer may not make the same amount of money with the BLM parcel was not determinative. "The agency preparing the EIR may not simply accept the project proponent's assertions about an alternative; rather, the agency ‘must independently participate, review, analyze and discuss the alternatives in good faith,'" the court ruled, citing Kings County Farm Bureau v. City of Hanford , (1990) 221 Cal.App.3d, 692, 736. The court added, " here is no evidence or analysis whatsoever of the comparative costs or profitability of developing the two parcels." The county argued that a 1931 federal law blocked BLM from disposing of the parcel in question in order to protect the watershed from which the City of Los Angeles exports water. But the court rejected the argument, noting that the BLM representative said a land exchange was possible and the EIR did not indicate the BLM parcel was unavailable for trade. Project opponents lost three other arguments, the most important of which concerned the EIR's project description. Opponents contended the project description should have treated the subdivision as a 54-unit project because future homeowners could build second units on their lots. All those second units would increase impacts related to runoff, traffic, air quality and public services, environmentalists argued. The court concluded the second units were too speculative to be considered at this stage. " he possibility that future lot owners will or will not build a second unit is extremely uncertain, and any impacts of such second units is highly speculative," the court ruled. The court also determined that the EIR's handling of species and aesthetic impacts was acceptable. The ruling cheered environmentalists, who said they would continue to press for a land swap or even for outright purchase of Walker's land for preservation. Walker, however, said a supplemental EIR would document the infeasibility of the land swap. The Case: Save Round Valley Alliance v. County of Inyo , No. E041364, 07 C.D.O.S. 14412, 2007 DJDAR 18555. Filed December 17, 2007. The Lawyers: For SRVA: Tamara Galanter, Shute, Mihaly & Weinberger, (415) 552-7272. For the county: James S. Reed, Liebersbach, Mohun, Carney & Reed, (760) 934-4558. For the developer: E. Nathan Schilt, Schilt & Heinrich, (909) 558-3355.

Winter and Spring Course Highlights: A Low Impact Design Approach to Storm Water Management Annual Land Use Law Review and Update Annual Water Law Update CEQA Update, Issues and Trends Clean Water Act Section 404: Nationwide and Other Specialized Permits Conjunctive Use of Groundwater and Surface Water Effective Code Enforcement Programs: Development and Implementation Endangered Species Regulation Protection Environmental Issues on the Farm: An Overview of Problems and Solutions for Production Agriculture Environmental Review of California Water Projects: Legal Requirements, Approaches and Techniques GIS Data Development and Integration Green Architecture Green Building Materials and Construction Methods Implementing Planning Law Improving Public Transportation: Principles and Strategies Making Effective Use of Mitigated Negative Declarations Planning for Rural Community Sustainability Planning in California: An Overview and Update Project Planning: Integration of Environmental Permits Role of the Planning Commissioner Surface Mining and Reclamation Act Thresholds of Significance in Environmental Planning Urban Planning Design Studio Urban Site Design Water Resources Planning and Urban Growth For a complete list of course offerings visit www.extension.ucdavis.edu/cpdr . 2008 Spring Conference: Climate Change: A Regional Perspective of a Global Issue This two-day conference will explore how climate change is affecting the environment and what society can do—and is doing—to minimize the negative effects. Experts from the scientific and public health fields, planners, decision makers and water resources professionals will discuss topics such as air quality, transportation, land use planning and the best practices cities and counties have adopted to combat this global issue. Reserve your space today! Click here to learn more or to enroll. http://extension.ucdavis.edu/cpdr

A statewide cap on driving? Here's the thing nobody is quite willing to say out loud about implementing California's climate change law in the land use arena: The state may have to place an overall cap on vehicle miles traveled (VMT), even as it must accommodate more growth. Last Friday at UCLA Extension's annual Land Use Law and Planning Conference , keynote speaker Anthony Eggert , senior policy advisor at the California Air Resources Board, issued what amounted to a plea for help from the 400 land use practitioners gathered in the room. CARB is charged with implementing AB 32. Land use is presumed to be part of the solution , but no specific implementation plan for land use has been adopted. Pinch-hitting for his boss, CARB Chair Mary Nichols , Eggert said it is not clear to CARB how much reduction in greenhouse gas emissions can come from reducing VMT, or from limiting VMT increase on future development projects. Without quite saying that there should be an overall restriction on VMT, he asked the land use practitioners for help in determining what level of greenhouse gas , Eggert said there are three ways to reduce transportation-related greenhouse gases: 1. Regulating vehicles 2. Regulating fuels 3. Changing or reducing vehicle usage as measured by VMT. He acknowledged that it's unlikely that the state will hit the greenhouse gas emissions reduction targets contained in AB 32, the state's climate change bill, without attacking the question of VMT. Like everybody else who's addressed the question in public, Eggerts stopped short of saying that VMT will have to be capped and/or reduced in order to meet the AB 32 target. But he did say that CARB is still working on "the best mix of incentives and requirements" that will limit VMT – or, at least VMT growth – as a way of tackling the greenhouse gas problem. He was not specific about what these carrots and sticks would be, but he did say that CARB supported strengthening the role of regional planning agencies in forcing land use change that will limit VMT. This is essentially the same approach contained in SB 375 (Steinberg), which is likely to be the legislative vehicle that will lay out the way AB 32 will be implemented in the land use arena. Again without being specific, SB 375 calls for regional planning agencies to create a "preferred growth scenario" that would meet AB 32 targets. Most experts believe that land use change must account for 10-15% of greenhouse gas reduction. It's hard to imagine how this would happen without creating a target – or maybe a cap – on VMT in each region around the state as a way of meeting a land use-related greenhouse gas emissions reduction goal. Eggert and other speakers on Friday indicated that more aggressive use of the California Environmental Quality Act is part of the solution , but CEQA analyses are likely to identify how to limit growth in VMT, not how to reduce it. -- Bill Fulton

Can "the Desert" handle a million people? More to the point, can the Palm Springs/Coachella Valley region handle a million people without creating a huge mismatch in jobs and housing that will create a swell of outcommuting from the area into the more job-rich parts of Southern California. At a Lincoln Institute conference in Riverside on Thursday, January 24, John Wohlmuth, executive director of the Coachella Valley Association of Governments , outlined the daunting challenge facing the Palm Springs are in the years ahead. The Coachella Valley has doubled in population since 1990, to more than 400,000 people. It's expected to hit a million people within 25 years. Currently, the Coachella Valley is blessed with with short commutes – some 60% of workers in the area commute 15 minutes or less to work. But that's mostly because the job growth is in low-paying hotel, service and construction jobs. The blue-collar workforce drives from Indio or Coachella to Indian Wells or Palm Desert. The Coachella Valley is among the most inequitable regions of the state, with many high-income retirees and low-income workers But as the population increases – and the indigenous working-class population seeks to increase wages in order to buy houses – where will the workers go for higher-paying jobs? Probably not somewhere in the Coachella Valley.  They'll have to drive to Riverside, Ontario, and beyond for good pay. So there's the dilemma for the Coachella Valley: Low-wage jobs equals less commuting; the desire for higher wage jobs is going to extend the Southern California metropolitan commuting pattern from Moreno Valley out to Beaumont, Palm Springs, and beyond -- Bill Fulton

An initiative that would prevent the use of eminent domain for economic development purposes and ban local rent control laws has qualified for the June ballot. The Howard Jarvis Taxpayers Association and the California Farm Bureau Federation are the primary proponents. In addition, a competing, more limited measure that would prohibit the taking of owner-occupied, single-family houses for economic development has also qualified for the same June ballot. The League of California Cities and the California Redevelopment Association are the primary proponents. The Jarvis group and the Farm Bureau contend that their "California Property Owners and Farmland Protection Act" is a response to the U.S. Supreme Court's Kelo decision that upheld the ability of the government to seize private property for economic purposes. The organizations say the state Legislature's post- Kelo eminent domain reforms — which tightened blight finding requirements and eased the ability to challenge redevelopment decisions — were inadequate (see CP&DR , October 2006 ). "Government should not be able to profit by seizing private property from unwilling sellers for retail or commercial projects," said Sacramento developer Doug Ose, the initiative's campaign finance chairman and a former Republican congressman. Farm Bureau President Doug Mosebar has said that the measure is necessary to prevent government from taking farmland in order to acquire water rights. Local government organizations, affordable housing advocates and environmentalists offer a different view and have started calling the initiative the "hidden agendas scheme." They contend that the measure is so broadly written that it would undermine not only rent control laws, but nearly all state and local laws that seek to protect the rights of tenants. They further argue it would outlaw inclusionary housing ordinances, and might prevent use of eminent domain for water projects. They contend the alternative "Homeowners Protection Act" is a more direct response to Kelo . For opponents of the Jarvis measure, one of the key provisions is a prohibition on "regulation of ownership, occupancy or use of privately owned real property or associated property rights in order to transfer an economic benefit to one or more private persons at the expense of the property owner." The Western Center on Law & Poverty recently produced a 17-page analysis detailing the potential impacts of the initiative. "Whatever the merits of limiting government's right to seize a person's home and transfer it to a developer as the city government did in Kelo , it is difficult to see how invalidating long-standing laws regarding rights of tenants would advance that goal," the analysis states. The Jarvis group has responded in part by drafting an initiative that would prevent organizations funded by local government agency dues from spending money to promote or oppose ballot measures. The initiative is a direct shot at the proponents of the alternative eminent domain initiative. Advocates have until June 9 to collect signatures on "The Taxpayer Protection Act of 2008."

A county cannot employ a development agreement to permit a use not otherwise allowed by zoning, the Fifth District Court of Appeal has ruled. In the first published decision to find a substantive limit to the development agreement law, the court said Tuolumne County could not use a development agreement allowing one agricultural property owner to conduct weddings and other events that are not allowed by the applicable zoning district and county zoning ordinance. The county violated the uniformity requirement in Government Code § 65852, which requires that regulations within a zone be the same, according to the court. The fact that the county used a development agreement did not change the uniformity mandate. "The development agreement law does not authorize cities and counties to create forms of zoning disunity they otherwise lack authority to create," Justice Rebecca Wiseman wrote for the unanimous three-judge panel. Five years ago, Ronald and Lynda Peterson filed an application with the county seeking to use their 37-acre parcel for hosting weddings and similar events. Their property was zoned Exclusive Agriculture, 37-acre minimum (AE-37), a zoning that did not provide for weddings and other commercial events with or without a conditional use permit. Some neighbors submitted opposition letters to the application because of noise and parking concerns. County planners and the Planning Commission recommended denial of the application, and during a September 2003 meeting of the Board of Supervisors, the Petersons withdrew their application. One month later, they submitted a revised application that relied on proposed ordinance amendments that would have permitted weddings, lawn parties and similar outdoor business activities in the AE zoning district. Supervisors declined to approve these amendments, but they did agree to create a special exemption for the Petersons by way of a development agreement approved in July 2005. The ordinance approving the development agreement granted the Petersons the right to have "weddings, retirement or birthday parties, service club functions, and similar activities as conditional uses." At the same time, the board approved a conditional use permit allowing the uses, and a mitigated negative declaration. A group called Neighbors in Support of Appropriate Land Use sued, arguing that the county lacked authority to approve the Petersons' application and violated the California Environmental Quality Act. Tuolumne County Superior Court Judge James Boscoe agreed with the former claim, and he declared the development agreement and conditional use permits void. Judge Boscoe determined the CEQA claim was not ready for judicial review. The county appealed, and the Fifth District upheld the lower court. The question, according to the appellate court, was this: " an a county approve an application to devote a parcel of real property to a use disallowed by the applicable ordinance even though the county does not rezone the property to a district allowing the use, does not amend the text of the zoning ordinance to allow the use in the existing district, does not issue a conditional use permit consistent with the zoning ordinance, and does not grant a variance?" The court's answer was no. "If a zoning scheme is like a contract, the uniformity requirement is like an enforcement clause," Wiseman wrote. "By creating an ad hoc exemption to benefit one parcel in this case — an exception that was not a rezoning or other amendment of the ordinance, not a conditional use permit in conformance with the ordinance, and not a proper variance — the county allowed this ‘contract' to be broken." "Instead," Wiseman summed up, "the county simply let one parcel and property owner off the hook." The county argued that the development agreement law (Government Code § 65864 et seq.) lets development agreements specify uses not allowed by a zoning ordinance, that the county can use the law to permit exceptions, and that a development agreement need not be consistent with zoning ordinances. But the court again emphasized the uniformity requirement. The requirement, the court said, trumped any exceptions to the requirement that the county claimed are contained in the development agreement law. The Case: Neighbors in Support of Appropriate Land Use v. County of Tuolumne , No. F051690, 07 C.D.O.S. 14060, 2007 DJDAR 18104. Filed December 7, 2007. The Lawyers: For Neighbors: J. William Yeates, Kenyon Yeates, (916) 609-5000. For the county: A. Paul Griebel, county counsel's office, (209) 533-5517.

Sacramento may be flooded with red ink these days – after all, the state's grappling with a $14 billion budget deficit – but that's not the only immersion the locals are talking about. As the feds get tougher about flood hazards, should the city go back to living on stilts, as it did in the old days? California's capital city is one of the most flood-prone metro areas in the nation – and Sac-town's characteristic state of denial got harder to maintain last week, when the Federal Emergency Management Agency announced it would designate the Natomas area as a flood hazard zone. That designation – long forestalled by the efforts of Sacramento's congressional delegation – will require residents to get flood insurance and could well force a de facto building moratorium . Mayor Heather Fargo, who's currently running unopposed for re-election, has been complaining about FEMA and as a result is getting hammered in the local paper for supposedly putting the city's development plans over public safety. Congresswoman Doris Matsui has said she's not going to try to overturn FEMA – something Bob Matsui, her predecessor and late husband, did successfully back in the ‘80s. There's no doubt that the FEMA move puts Sacramento in a tough position. Located on the north side of the American River, between downtown Sacramento and Sacramento International Airport, Natomas is just about the last undeveloped area in the City of Sacramento. It's the home of Arco Arena, where the Sacramento Kings basketball team plays. Development was held up for many years in the 1990s because of flood concerns but in the recent housing boom it's been a cash cow for Sacramento developers, and the city. During recent years, about half of the new housing in Sacramento has been built in Natomas, and a lot more development is in the pipeline . So what's a flood-prone city to do? Maybe Sacramentans should go back to building houses the way they used to – and, apparently, the way their Delta neighbors are beginning to do again. Back in the 19th Century, most Sacramento houses were built on the assumption that the ground floor would flood sooner or later. Sure, there was a ground floor. But the main floor was actually the second storey, and the main entrance was a stairway from the street up to the second floor. Many of these old houses still exist , especially in the Midtown neighborhood of Sacramento. Should the flood-prone Sacramento area go back to building houses that start on the second floor? Actually, it's already happening. One of the standard infill housing types throughout California today is the tall, skinny three-story residence (either a townhome or a Although they look odd , these new houses with raised living spaces in Isleton may provide a model for flood-prone Sacramento. single-family house designed like a townhome) with a garage on the ground floor and living space on the second and third floor. It's practically infill on stilts. I've seen these projects all over the place. There's one about a block from our office in Downtown Ventura. But the flood-resistant nature of this particular housing type didn't really strike me until Saturday, when I stopped by the Delta town of Isleton – 30 or so miles down the Sacramento River south of the capital – and checked out the first new subdivision built in the city in something like 80 years. The old Delta cities in this area – Isleton, Walnut Grove, Locke – are tightly laid out in the late 19th Century style, and they're separated from the river by a major levee, which doubles as a road. In Walnut Grove, some of the buildings have a ground floor that fronts on a downtown street and a second storey that fronts on the levee road. But this new development is something … um … different , as this photo taken by Allison Joe suggests. I'm not sure whether Isleton actually required Renovo Communities to use the first-floor garage approach for the 331-unit "Village on the Delta" . But all the models included in the subdivision are three stories with garage on the bottom. Weird-lookin'? Yeah. But flood-proof for sure! So maybe Mayor Fargo could blunt some of the criticism she's been getting by adopting the Isleton approach. After all, does it really matter if you car floods – so long as your living space is high and dry? -- Bill Fulton

In almost shockingly candid interview with the Los Angeles Times , Gov. Arnold Schwarzenegger concedes that his earlier answers for solving the state's budget and governance problems were based on his poor understanding of the problems and the system. You might recall the 2003 recall campaign, when Schwarzenegger said he could solve the state's budget problems simply by eliminating "waste, fraud and abuse." He now says these things are not a factor in the state's projected $14.5 billion budget deficit. The governor also has changed his mind on term limits. Here's what the former term limits supporter has to say now: "The special interests and lobbyists up there are so much more sophisticated and so much more advanced than the politicians are. ... So who is it really helping? I am seeing this firsthand. The people I finally got used to working with now will be kicked out." What is most remarkable to me is not Schwarzenegger's new positions, but his willingness to admit publicly that governing California is not the piece of cake that he said it would be. Long-time Sacramento insiders and observers might respond, "No kidding." You can read the full interview here . - Paul Shigley