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State and federal officials early this summer released a "draft preferred alternative" for the Calfed Bay-Delta Program, which officials inside the process contend will overhaul the plumbing system on which most California residents, farms and businesses rely. Many observers outside the program, however, struggle to determine how significantly Calfed will alter water and land use policies. Although the full plan weighs in at 40 pounds, it is light on some crucial details that might have major implications for land use planning. The plan, for example, does not recommend whether or not to build new reservoirs, and it postpones for up to seven years a decision on an "isolated conveyance facility" — better known as a peripheral canal. Still, water policy and politics appears likely to get more attention in coming months, as Calfed leaders have scheduled 15 public hearings around the state from August 18 through September 22. Plus, Gov. Gray Davis is receiving pressure, from Sen. Dianne Feinstein among others, to get more involved in state water negotiations. Calfed is a five-year-old effort involving 15 state and federal agencies, including the Resources Agency of California, U.S. Fish & Wildlife Service, U.S. Environmental Protection Agency, and the Army Corps of Engineers. Calfed is charged with developing long-term solutions to Bay-Delta system problems concerning fish and wildlife, water supply reliability, flood control and water quality. Calfed will not change local land use decision-making and it will not tie water supply to growth, Calfed spokeswoman Valerie Holcomb said. Still, she pointed to several aspects of the Calfed plan that should interest planners and developers. Enhancing water reliability and water quality remain a major part of Calfed's mission, which should affect local development decisions, she said. Byron Buck, executive director of the California Urban Water Agencies, said the argument within Calfed over additional surface water storage is a surrogate for the growth debate. Not even Buck's member agencies, which are the state's 12 largest water districts, can agree on how closely water should be linked to land use planning. Buck complained that the pace of traditional water development has slowed to a trickle, which could well affect future urban development. "We've been through five consecutive wet years, and that continues to mask the concerns we have with water in California," he said. Joan Dym, executive director of the Southern California Water Committee, said, "Let's recognize that growth will happen and let's plan for it. I think storage is obviously one way to do that. There are lot more underground storage opportunities than we are taking advantage of." Agriculture has an obvious stake in the debate, but other business interests are paying close attention, too. An extended shut-down of pumps in the Delta to protect the Delta smelt this spring raised water-delivery concerns among some Silicon Valley manufacturers. Businesses planning to relocate or expand are considering water reliability when weighing siting options for new plants, said Dym, who represents a coalition of businesses, cities, counties and water agencies. Dym said Calfed needs to go forward now on the peripheral canal. "We don't want to wait 10 years down the road and then say, oops, and have to start from scratch," she said. Peripheral canal proponents say a water delivery system that bypasses the Bay-Delta system would improve water quantity and quality for the central and southern parts of the state, and prevent fish from getting sucked into Delta pumps. Opponents, however, fear such a canal would take too much water, harming the Bay-Delta ecosystem and inducing Southern California urban growth. While delaying for now decisions on the peripheral canal and new reservoirs, Calfed's latest plan does address water transfers. Rather than relying on the overcommitted state water project or a local water district, some developers purchase agricultural water rights from another location. Thus, water that would have irrigated crops in one part of the state, instead flushes toilets and keeps lawns green elsewhere. Calfed proposes a water transfer clearinghouse and a process for protecting areas from which water is being moved. "We're not talking about prohibiting a free market," said Holcomb, "but putting in place some guidelines that make the free market work better and protecting third parties who don't have a say over the transfer." Leaders of far northern California's rural counties, which are at the beginning of the state's plumbing system, have committed money and staff to participating in the Calfed process "because of the threats to land use and property rights," said Patrick Minturn, Shasta County assistant public works director. Minturn said a number of land use measures are tucked away in the volumes of Calfed documents. Among the issues he sees are stricter grading and erosion controls, greater development setbacks from riparian areas, water-efficient development mandates, and tight restrictions on sewer and storm drain discharges. The erosion control mandates could increase the cost of development significantly, Minturn said. For example, "you may see a quarter-acre sedimentation basin next to the parking lot for the new Wal-Mart," he said. Whether friend or foe of Calfed, several observers are frustrated with the pace at which the process is moving. Dym, among others, said Gov. Davis and Interior Secretary Bruce Babbitt need to take a direct role to speed things along. A final programmatic environmental impact statement is scheduled to be adopted in summer of 2000. Contacts: Joan Anderson, Southern California Water Committee, (909) 980-4700. Byron Buck, California Urban Water Agencies, (916) 552-2929. Patrick Minturn, Shasta County Department of Public Works, (530) 225-5661. Calfed Web page, http://calfed.ca.gov.

University of California, Santa Barbara, officials proposed building 200 dorm rooms a little too close to wetlands, the California Coastal Commission had decided. The commission approved the student housing but ordered the university to keep the planned construction at least 100 feet from a slough, coastal pools and other wetlands. The decision requires a major redesign of the San Rafael housing addition and will delay the project by a year, according to Tye Simpson, UCSB director of physical and environmental planning. University officials had hoped to have the dormitories ready for students in the fall of 2000. The UCSB proposal called for 200 dorm rooms in 18 buildings to house a total of 800 students. Housing is at a premium at the 20,000-student campus and in the neighboring unincorporated community of Isla Vista. University officials have agreed to build more housing, and the 10-acre site for the San Rafael addition is the last place on campus designated for housing by UCSB's Long-Range Development Plan, Simpson said. The San Rafael project is intended to house existing numbers of students, not additional UCSB students, he added. However, UCSB planners and the Coastal Commission differed over how best to protect natural resources. The university proposed a resource management approach that would have enhanced more valuable wetlands elsewhere, while the Coastal Commission took more of a preservationist approach, Simpson explained. Steve Hudson, a coastal program analyst for the commission, said the Coastal Act mandates protection of wetlands in general. Everyone involved agrees the wetlands involved are not pristine, but "even small and degraded wetlands serve an important environmental component," he said. Furthermore, UCSB's own Long-Range Development Plan — which the Coastal Commission approved in 1990 — requires a 100-foot buffer, Hudson noted. University planners had proposed buildings within 60 feet of wetlands, with grading even closer to the sensitive areas. Placing 800 students so close to the wetlands and to habitat for three rare plant species found on-site is bound to have an impact, but the revised project should offset those effects, Hudson said. While voting 9-1 in June to approve the dormitories, the Coastal Commission also required UCSB to provide better public access to a bluff and beach bordering the campus. The Coastal Commission decision may provide ammunition to environmental groups concerned about UCSB plans to build 500 faculty houses near a slough and nature preserve elsewhere on campus. The university has not officially filed those plans with the Coastal Commission yet, Hudson said. Contacts: Tye Simpson, University of California, Santa Barbara, planning director, (805) 893-8388. Steve Hudson, Coastal Commission analyst, (805) 641-0142.

It was bound to happen. The neo-traditionalist planning movement is making inroads into the most doctrinaire of planning dynasties – Caltrans. Late last year, in a little-noticed but potentially monumental policy shift, the state road bureaucracy issued Design Information Bulletin Number 80, thereby granting guarded approval of modern roundabouts as part of California's highway design toolbox. Now it's up to local governments to press ahead with a back-to-the-future concept: intersections where signalized or controlled stopping and multiple turning movement lanes are replaced with slowed, continuous, circular movement patterns around landscaped or art-bedecked center plazas. The concept of one-way circular intersections was probably invented by French architect Eugene Henard during the 19th century. His American counterpart William Eno was simultaneously proposing small circles to alleviate traffic congestion in New York City. But the idea never flourished, and implementation remained limited to grand urban design locations like Du Pont Circle in Washington DC. The notion that the roundabout could actually enhance intersection operation and safety really took root in England during the mid-1960s with the innovation of the "yield-at-entry" rule and the "angle-of-deflection" design. These features combine to slow entering cars, allow only one point of conflict, and keep traffic moving in accordance with its load characteristics. These minor but critical design improvements enabled the safe handling of much higher volumes of traffic. The roundabout concept has flourished in many countries since then – notably in France, the Netherlands, and Australia. But, interestingly, in North America the idea has been slow to take hold. One wonders if the simplicity of the concept offends our more techno-fix oriented engineers. But there is movement. Led by roundabout consulting crusaders like Florida-based Michael Wallwork and Santa Barbara-based Lief Ourston and Peter Doctors, the modern roundabout is an idea that is, well, coming around. And it's no wonder why. Not only do the roundabouts dovetail nicely with growing preferences for new urbanist design, but, importantly, they seem to really work. A growing body of empirical evidence suggests that roundabouts can handle more traffic, reduce injury collisions, and save capital and operational costs. Plus, they're fun to tool around in. In the mid 1990s, Vail, Colorado, took a groundbreaking risk in tackling the interchange design at Vail Road and Interstate 70, which is the freeway that funnels Denver's weekend skiers into the Rocky Mountain resorts. The solution was a double roundabout design that saved $3 million in capital costs by eliminating the need for a bridge widening and $85,000 per year in traffic police staffing. Interchange capacity grew by 56% while injury crashes have eased by 66%. California trails in the acceptance of roundabouts. Instead, Florida, Colorado, and Nevada are at the leading edge. With Bulletin 80, Caltrans has taken a baby step toward acceptance. But it will be the local jurisdictions that must take the lead. In California, Santa Barbara, Santa Maria, Carlsbad, and Arcata are at the forefront. In each case, local planners have served in advocacy and education-dispensing roles. In Santa Maria's case, the developer of an adjacent big-box center financed two roundabouts in 1998. Reluctant to be guinea pigs for an intersection experiment, the developer winded up benefiting from the cheaper cost and from the unique design features that serve as entry points. According to Jim Stern, city planner, the facilities are functioning well, but there were administrative bugs. "We had a bit of a problem with the signage component," Stern said. "Because there is no roundabout signage approved by Caltrans, we have not been able to install the internationally-accepted roundabout approach signage." Tiny Arcata in Humboldt County is the epicenter of California's roundabout trend. The city, which is proud of the fact that it has no traffic signals, has one circle on line, two beginning construction later this year, and three more scheduled for the summer of 2000. According to Dobie Class, assistant public works director, the city is retrofitting existing intersections to make them safer and to avoid the costs of signals and maintenance. Santa Barbara traffic consultant Scott Schell said the transportation community in the state is "cautiously optimistic" about the future of modern roundabouts. "We certainly look at them in specific instances where it appears to be a feasible alternative. The general feeling is ‘let's try them at smaller locations and see if they work,'" Schell said. He added that even though vehicle collisions have been reduced, engineers are insecure about data on the safety of pedestrians and bicyclists. But Ourston asserted that there have been no pedestrian collisions involving roundabouts in the U.S. As the new urbanist movement has demonstrated, sometimes what's old is what's new. And in matters of traffic, this may mean we will be going in circles.

A new survey has documented what many planning and public policy experts have long suspected: California city managers prefer retail projects in their community over any other type of land use, and they least favor multi-family housing and heavy industrial projects. The survey — part of a study of land use and sales tax issues by the Public Policy Institute of California — was released just as the California Legislature considers a bill that would require cities that lure large retailers across jurisdictional lines to share tax revenue with the "losing" jurisdiction. The bill, AB 178, carried by Assemblyman Tom Torlakson, D-Contra Costa County, was approved by the Senate Local Government Committee on July 14. A similar Torlakson bill failed to pass the same committee last year. The PPIC study also emerged at the same time that a committee appointed by the Board of Supervisors in Humboldt County concluded that big-box retailers will bring few new jobs and little new tax revenue to the county. The city manager survey found that retail ranked significantly higher than office, mixed-use, and light industrial land uses, which also rated as city manager favorites. Surprisingly, the survey found little difference in city manager preferences for land uses inside and outside redevelopment project areas. "To be fair, cities are not one-dimensional in their policy orientation, and they're still pretty interested in other types of development," said Paul Lewis, a PPIC researcher and co-author of the study, California Cities and the Local Sales Tax. The PPIC study also found that even though cities are heavily focused on sales tax, the hierarchy of sales-tax "winners" and "losers" in the state has not changed significantly in the last 25 years. Furthermore, the study concluded, distributing sales tax on a population basis — either statewide or on a county-by-county basis — would not create significant change, as least on a macro scale. Approximately half the cities would be winners and half would be losers. Though individual cities would be heavily affected, there would be little difference, in the aggregate, between cities that win and cities that lose. Cities with a high Latino population would be winners — but so would extremely affluent cities, because they often have little retail base. Sales-tax revenue has been considered especially important to cities ever since the passage of Proposition 13 in 1978. According to the report, cities received about 20% of their revenue from property tax and only 10% from sales tax prior to Proposition 13. Today, the two revenue sources are approximately equal at about 10% apiece. Cities receive most of their revenue from public service enterprises (approximately a third) and licenses, fees, and assessments (including development fees), which have grown from about 20% of revenue in the pre-Proposition 13 era to about 30% to 35% today. Sales taxes are especially important, however, because there are no legal constraints to growth in revenue and because the funds may be used for any purpose. In tracking city sales-tax revenue, Lewis and his co-researcher, Elisa Barbour, examined statistics in the 1991-93 period (a recession, especially for retailing) as well as historical trends from the early 1970s to the early 1990s. Among other things, they found that per-capita sales-tax revenue is generally higher in cities with declining household sizes, cities that have not had rapid population growth, and — significantly — cities located outside the Central Valley. These cities were more successful not only during the 1991-93 period, but also over the entire 20-year period. In addition, PPIC found, cities active in redevelopment, those located near freeways, and those with a small African American population were also successful in the sales-tax game — but these differences only showed up during the 1991-93 period, not over the 20-year period. Significantly, however, researchers did find that central cities — defined as 36 older cities with established downtown areas — have lost considerable ground compared with suburbs. In 1971, central cities actually had greater sales-tax revenue per capita than suburbs did. Suburbs overtook central cities in the mid-'70s, and the gap has accelerated during the boom years of both the 1980s and the 1990s. Today, sales tax revenues in the central cities is about $90 per capital compared with about $110 in other cities. The study also found an increasing gap in per-capita sales-tax revenues between the Bay Area and the Los Angeles region. Los Angeles had higher per-capita sales-tax revenue until the early 1980s but has been losing ground ever since. Today, the figures are approximately $125 per capita in the Bay Area and $95 per capita in Los Angeles. The survey of city managers — to which about three-quarters of city managers in the state responded — measured not only land-use preferences but also factors reported by city managers that influence land use decisions. New sales-tax revenues came out as the most important factor, followed closely by city council support, eradication of blight (in redevelopment areas), infrastructure adequacy, and likelihood of job creation. With the exception of blight, these factors were not very different inside and outside redevelopment project areas. Meeting affordable housing needs, although higher in redevelopment areas, was among the least of city managers' concerns. However, city managers in different regions of the state had different attitudes. City managers in all parts of the state listed sales-tax revenue as an important motivation. But Bay Area city managers, unlike their counterparts elsewhere, listed city council support, traffic problems, and neighborhood concerns as top factors. By contrast, Central Valley city managers were far more likely to list job creation as a factor influencing their land use decisions. "If you're an isolated Central Valley city, you have to be concerned about jobs," Lewis said. Though PPIC released the study at the same time the Senate Local Government Committee considered the Torlakson bill, it is hard to say whether the study affected the bill's success. AB 178, which was opposed by the California Motor Car Dealers Association among others, requires that if a city offers a subsidy to a big-box retailer or auto dealer to relocate within the same market area, the city must offer a sales-tax sharing contract to the city from which the retailer is relocating. The contract must be approved by a two-thirds vote of the city council or county board of supervisors in each jurisdiction. The legislation defines a big-box retailer as a store of at least 75,000 square feet. Rex Hime, lobbyist for the California Business Properties Association, said opposition was muted by a number of changes from Torlakson's 1998 bill. Among other things, AB 178 limits the definition of a financial incentive so that some mitigation measures such as traffic improvements are not included and provides a specific definition of a "market area". As originally written, the bill defined "market area" as a 40-mile radius. At the July 14 hearing, the committee amended the bill to define the market area for big-box retailers as 25 miles, while retaining the market area for autos as 40 miles. "It's a much different bill than it was before," Hime said. The Humboldt County report was issued by a 10-member committee, including city managers and other prominent county citizens, appointed by the Board of Supervisors. The Ad Hoc Committee on Big Box Development concluded that because the county is isolated and its retail market is not growing very rapidly, any new big-box development would simply siphon jobs and sales from existing retailers. Supervisors created the committee in response to the pending question of whether to approve a Wal-Mart in Eureka. That question will be on the Eureka ballot August 24. The committee encouraged the county's cities to take advantage of the sales-tax sharing provisions in Proposition 11, passed by state voters last year. Contacts: Paul Lewis, Public Policy Institute of California, (415) 291-4400. Peter Detwiler, Senate Local Government Committee, (916) 445-9748 Rex Hime, California Business Properties Association, (916) 443-4676. California Cities and the Local Sales Tax is available on the PPIC web site, www.ppic.org.

Opponents of a 5,000-unit subdivision and golf resort in the western foothills of Stanislaus County continued their courtroom winning streak when Stanislaus County Superior Court Judge Donald Shaver ruled a supplemental environmental impact report was inadequate. In a July decision, Shaver said the county "failed to adequately evaluate the environmental impacts and the cumulative impacts, failed to accurately describe one portion of the project and failed to recirculate the SEIR." In the first round of litigation over the Diablo Grande project, the Fifth District Court of Appeal ruled that the county's EIR had improperly deferred analysis of water supply issues. The court in that case, Stanislaus Natural Heritage Project v. County of Stanislaus, (1996) 48 Cal.App.4th 182, said the county could not make an informed decision on the development when the EIR only addressed the first five years of water supply for a 25-year project. Because the area does not contain adequate on-site water, project proponents have pursued a water transfer from the valley floor. After that decision, now known as Diablo Grande I, the county issued a supplemental EIR. But judge Shaver punched holes in that document too. "Nowhere in the report does it consider or evaluate the impact, alternatives or mitigation of directing 13,000 acre feet per year of valley or outside water to the new community," Shaver wrote. Shaver said the county misinterpreted Diablo Grande I by discussing in the SEIR a variety of potential water sources, three of which he called "too speculative." "The purposes of CEQA would be ill-served if the act sanctioned a generalized discussion of a shotgun list of options which leaves the reader to wonder which might or might not be used," Shaver wrote. The Cases: Protect Our Water v. County of Stanislaus, Superior Court Case No. 181472, and California Farm Bureau Federation v. County of Stanislaus, Superior Court Case No. 181448. The Lawyers: For Protect Our Water: Rose Zoia, Brandt-Hawley & Zoia, (707) 938-3908. For Stanislaus County: E. Vernon Seeley, assistant county counsel, (209) 525-6376.

The Metropolitan Water District of Southern California has embarked on a major reorganization and a series of cost-cutting measures, partly in response to cost overruns for the construction of Eastside Reservoir in Riverside County. In July, MWD's new general manager, Ronald Gastelum, unveiled the first phase of a series of organizational reforms, calling for $10 million in immediate cost savings and perhaps as much as $100 million in cost savings in the coming years. Like the Calfed negotiations, the MWD's internal travails will not directly affect land-use issues in Southern California. But the agency supplies almost all the wholesale imported water in metropolitan Los Angeles and San Diego, providing water to 27 cities and water districts. Its boundaries have largely determined the boundaries of urban growth in Southern California over the past half-century. In recent years, the agency has had a series of internal problems, including a dispute with the San Diego Water Authority over whether San Diego will be able buy water directly from farmers in the Imperial Valley and have it shipped through MWD's Colorado Aqueduct. San Diego is MWD's biggest customer, and the possible loss of San Diego business could imperil the agency's capital program. The agency's largest capital project is the $2 billion, six-square-mile Eastside Reservoir project near Hemet, which is designed to increase surface water storage for the agency. Gastelum, a former official with the waste-management firm of BKK Corp., was appointed in March to replace John Wodraska, the MWD's previous general manager. The cost-cutting effort was initiated in the face of high-pressure criticism from the state Legislature regarding cost overruns and other allegations of mismanagement.

A 1998 law that builders hoped would keep a lid on school impact fees is instead becoming a tool for some districts to charge far higher fees than builders envisioned. The 1998 measure, known as SB 50, capped school fees at $1.93 per square foot. The Legislature passed SB 50 as part of a deal in which developers then agreed to support a $9.2 billion school facility bond on the November 1998 state ballot. Voters subsequently approved Proposition 1A. (See CP&DR June 1999.) However, SB 50 allows for school districts to charge "Level Two" fees in excess of $1.93 per square foot, and numerous school districts are going through the process. For instance, Modesto City Schools intends to adopt a fee of $3.73 this month, said Debbe Bailey, the district's director of planning and research. To go beyond the $1.93 limit, districts must prepare a five-year school facilities needs analysis as spelled out in the legislation, and must apply and be eligible for state funds. Then the district also must meet one of four criteria: 40 % of students enrolled in multi-track, year round school; or 50 % to two-thirds voter approval for a general obligation bond in the district during the last four years (meaning it failed); or 20 % of teaching stations in portable classrooms; or certain debt ceilings having been reached by the district. As of next year, districts must meet two of these criteria. Bailey's district cleared the portable classroom and bond indebtedness hurdles, but the required needs analysis was a challenge. "It's not a real needs analysis, it's a fee formula," she said. "Our district has probably one of the best data bases in the state, and it has taken us almost a year to get the information together." Several school districts in the San Diego area are preparing to levy Level Two fees of $2 to $5 per square foot, said Tom May, an attorney who assists with school financing. The requirements regarding portable classrooms and a failed local bond that got 50% of the vote are particularly easy to meet, May said. When Proposition 1A's $2.9 billion earmarked for additional K-12 schools runs out, districts may charge builders the full cost of new facilities, minus locally dedicated school monies, Bailey added.

DEALS: THE UNRAVELING OF DREAMWORKS AND WHAT IT SAYS ABOUT PUBLIC-PRIVATE ECONOMIC DEVELOPMENT DEALS Economic development and motion picture development are not alike. Economic development is a slow, often bureaucratic, process involving the collaboration of many people, including government, real estate interests, and big employers. Motion picture development, on the other hand, is dominated by a handful of powerful personalities, predominately studio heads, who can simply axe a project if they have second thoughts about it. End of story. On to the next project. The above observation is hardly original. Everybody knows that movie moguls are impulsive, willful and mercurial. The phrase, "as cooperative and public-minded as a studio executive" has never become a folk saying. Why, then, are we entrusting such people with an important part of our economic future? No doubt, this question was being repeated over and over in the minds of many Los Angeles residents in July, after DreamWorks co-founder and chief hatchetman Jeffrey Katzenberg wielded his axe. In a brief statement, Katzenberg said that DreamWorks was pulling out of its commitment to build the studio's long-anticipated headquarters in the Playa Vista development in the City of Los Angeles. Playa Vista, he said in the statement, was "no longer in the interests of DreamWorks." No apologies. No explanation. In other words, Katzenberg washed his hands of Playa Vista much as he would have rid himself of an unsatisfactory motion-picture development project. The problem is, building the studio was not a project that could be dropped without affecting many other people. Beyond the loss of potential jobs, the DreamWorks deal squandered a great deal of political capital and goodwill in Los Angeles. Katzenberg hung a lot of people out to dry, including Los Angeles Mayor Richard Riordan, who campaigned vigorously for the project and even changed the business tax code, in part, to accommodate DreamWorks. Riordan also helped round up $35 million in economic incentives for the film studio. Similarly hung out was City Councilwoman Ruth Galanter, who first came to office campaigning against an earlier version of Playa Vista. Galanter had spent most of her political resources backing this controversial project on the promise of hundreds of high-paying jobs to be delivered by the film studio, as well as the many entertainment and technology companies expected to cluster around it. It's not as if Katzenberg and his partners, director Steven Spielberg and entertainment mogul David Geffen, did not have some ambivalence about Playa Vista. They had threatened to pull out before. Still, DreamWorks fought — and I mean fought — for the project for nearly five years. Katzenberg's tactics showed just how much tougher the entertainment industry is than commercial real estate, or nearly any other business that operates lawfully. Katzenberg publicly feuded with (and humiliated) developer Rob Maguire in the pages of The Wall Street Journal, just as he would later use the same newspaper to pillory his former boss at Disney, Michael Eisner. DreamWorks seemed to get everything that it asked for, including very favorable terms for 47 acres of ocean-front real estate from Maguire, who complained that Riordan strong-armed him into accepting the deal. After persevering and winning all that, it seems strange that DreamWorks would bow out after being rejected by a single lender. According to the Los Angeles Times, the lender turned down the deal because DreamWorks needed more "mezzanine financing," which is usually a way of providing more equity to a project. In other words, the lender asked for a bigger downpayment. (Customarily, real estate developers need to borrow some equity to receive a construction loan.) Here is where the mystery starts. Why did DreamWorks take no for an answer? One thing is clear: The loan refusal was used as a fig leaf for the DreamWorks partners. Does anyone really believe the shuck-and-jive routine of "oh, we couldn't get financing, so I guess we can't build a studio, after all. Darn." As the Times observed, each of the partners is a billionaire, or nearly so, and each could afford to finance the entire $200 million construction project out of his pocket without giving up his ski vacation in Gstaad. More than one person has observed that Katzenberg could have paid cash for nearly the entire project out of his recent settlement with The Walt Disney Company over contested royalty payments. So why didn't they build? This is my theory: It is well known that DreamWorks has fallen far short of its financial goals. Although several of the firms' movies have been well-received critically, only a few have been box office winners. It is perfectly believable that spending $200 million for a film studio may not appeal to DreamWorks as much as it did five years ago. After all, if these guys really wanted to build it, they would find a way. But they have decided that they can rent studio space and defer the grandiose prize of a monogrammed water-tower on their own studio lot. If there are any lessons to be learned from the Playa Vista fallout, however, they are not being learned quickly by local government. Almost desperate not to lose DreamWorks, the mayor's office and the City Council are trying to dangle a different development project elsewhere in the city in front of Katzenberg, this time in North Hollywood. Meanwhile, in accordance with California's dog-eat-dog style of regional cooperation, surrounding cities — including Burbank, Glendale, Santa Clarita, Palmdale and Lancaster — immediately made offers to el Tres Caballeros. (Lancaster, a high desert suburb as far away in the mind of Hollywood as Juneau, Alaska, reportedly offered 47 acres for free.) But DreamWorks will probably not build a campus anywhere. Yet there's something else more important that all the other Hollywood wannabes do not seem to understand. Companies like DreamWorks — entertainment and other fast-growing entrepreneurial firms — are bad bets for public-private partnerships. Perhaps cities would be better off with more lumbering, more conservative, more — dare we say it? — corporate partners than with hot-shot outfits. Unfortunately, the fastest growing sector of California's economy is in entrepreneurial entertainment, bio-tech, and software businesses, and this cachet of companies looks very sexy to economic development types. But if you lie down with DreamWorks, you will likely wake up alone.

Efforts to build a new ballpark for the San Diego Padres hit a snag when historic preservation advocates won a round in San Diego County Superior Court, potentially jeopardizing the project's targeted completion date of February 2002. Superior Court Judge Judith McConnell ordered the City of San Diego and its downtown redevelopment agency to halt eminent domain proceedings, land assembly and the awarding of a $50 million contract for infrastructure improvements until an environmental impact report is complete. A draft EIR is has circulated but City Council adoption of the study is not due until mid-September. The decision stalls a "critical path" item by three to four months, said Deputy City Manager Bruce Herring. Officials are still trying to determine if that time can be made up before February of 2002, he said. An organization called Citizens Advocating Redevelopment Excellence filed a lawsuit because it wants the city and the Padres to move the stadium location by two blocks to avoid an historic warehouse district. In June, the National Trust for Historic Preservation listed the arts and warehouse district as one of the 11 most endangered historical places in the country. City officials argued that the eminent domain, land assembly and public works projects were allowed under a 1992 downtown redevelopment plan. However, the plan does not contemplate a baseball stadium, said Susan Brandt-Hawley, the attorney for CARE. A paper trail made clear the city's actions were in preparation for a ballpark, she said. In her ruling issued in late June, Judge McConnell wrote, "The current activities being pursued by (the city) appear to be inconsistent with the Centre City Redevelopment Plan, and the master environmental impact report. The draft subsequent environmental impact report admits that the development site was intended to comprise primarily residential uses, and the proposed ballpark project is ‘currently not an allowed use within the area.'" Added Brandt-Hawley, "You wonder why they didn't do the EIR a year ago." Last fall, San Diego voters approved the 42,000-seat stadium for the rundown East Village, near the revamped Gaslamp Quarter and the expanding convention center. Funding for the $411 million ballpark is to come from city-issued bonds ($225 million) the redevelopment agency ($50 million) the port district ($21 million) and the Padres ($115 million). The ballpark is supposed to anchor a 26-block redevelopment area, with hotels, restaurants and shops completing the project. Brandt-Hawley said her clients are not trying to halt the ballpark, only to move it a few blocks toward vacant San Diego Gas & Electric property. The East Village is getting a second life as people create live/work units in the brick warehouses built early this century — just as envisioned by the 1992 redevelopment plan. However, Herring, the deputy city manger, said shifting the ballpark site would "change the project dramatically" because it would requiring altering plans for ancillary hotels and other developments around the stadium. Padres majority owner John Moores told the San Diego Union-Tribune that he would not consent to shifting the ballpark's location. He also said McConnell's ruling proves "it's impossibly difficult to get anything done in California." Complicating the stadium controversy further, the 1998-99 San Diego County grand jury charged two-term Mayor Susan Golding with civic misconduct. The grand jury alleged Golding offered to back a $4 million city appropriation to the San Diego County Hotel-Motel Association for tourism promotion in exchange for the association supporting last year's ballpark ballot measure. However, on July 20, District Attorney Paul Pfingst declared Golding had done nothing illegal and he sought dismissal of the charge. Golding denied any wrongdoing. Contacts: Susan Brandt-Hawley, attorney for Citizens Advocating Redevelopment Excellence, (707) 938-3908. Bruce Herring, San Diego deputy city manager, (619) 236-6363.

A proposed lot line adjustment constitutes a development under the Coastal Act of 1976, even though the proposal would not result in more parcels, the Second District Court of Appeals has ruled. The decision means the Coastal Commission has jurisdiction over the proposed lot line adjustment. The unanimous three-judge appellate panel upheld the decision of Los Angeles County Superior Court Judge David Yaffe, who compared a lot line adjustment to a lot split. "In either case, the reconfiguration of the land can facilitate a development in ways that impact upon the interest of the Coastal Commission," wrote Yaffe, who was quoted in the appellate court opinion. The case centers on 16 parcels on 92 acres in the rugged, fire-prone Topanga Canyon. La Fe, Inc. and six individuals — including Robert S. Rein, who served as the proponents' attorney — sought the county's permission to adjust lot lines for the 16 parcels. The county approved the proposal in concept but said the landowners needed a coastal development permit from the Coastal Commission. Prior to the Coastal Commission making a decision, the Los Angeles County Regional Planning Commission rejected a proposal to subdivide one of the 16 parcels into three lots because the lone fire access route — provided by Hillside Drive — was inadequate. The Coastal Commission focused on the same when it denied the proposed lot line adjustment in April of 1997. According to Fire Marshal Jesus Burciaga, the lot line adjustments would move building sites away from street frontage "‘further into an extremely dangerous area without any form of mitigation.'" The commission found the proposal would increase the number of lots in a mesa from five to 15, thus increasing by 10 the number of parcels taking access from Hillside Drive. The commission, therefore, could not make the necessary finding that the proposal would not minimize risks to life and property in a high fire hazard area. Improving Hillside Drive or creating a secondary access would require "excessive landform alteration" contrary to the Coastal Act. The commission also determined the proposal would increase building density in the mesa. The proponents then sued, seeking preemptory writs of mandate ordering the county to record a certificate of compliance for the lot line adjustment and ordering the Coastal Commission to grant a permit waiver. Judge Yaffe refused to issue the former writ of mandate because, he ruled, the Coastal Commission has jurisdiction, not the county. He then ruled that the Coastal Commission could consider the lot line adjustment as a "development." On appeal, the proponents argued only that the lot line adjustment that created no additional lots was not a development within the meaning of the Coastal Act, and, therefore, the Coastal Commission had no jurisdiction. The Second District Court of Appeal, Division Five, rejected that argument. Citing extensively from California Coastal Commission v. Quanta Investment Corp., (1980) 113 Cal.App.3d 579, Presiding Justice Paul Turner wrote that the Coastal Act "by its terms recognizes that a subdivision of land or a lot split can result in changes in the density or intensity of use of property. A lot line adjustment can, as here, have the same effect. More to the point, though, § 30106 explicitly applies to a ‘subdivision … and any other division of land.' A lot line change constitutes a ‘division of land.'" In Quanta, Turner noted, the court ruled that conversion of existing apartment units into a stock cooperative form of ownership qualified as a division of land and, thus, was a development. In Stanson v. San Diego Coast Regional Commission, (1980) 101 Cal.App.3d 38, the court ruled that remodeling a supermarket into 16 small retail shops and a restaurant constituted a development within meaning of the Coastal Act. In an unpublished portion of the opinion, the court rejected the proponents' argument that the Subdivision Map Act exempted lot line adjustments from the discretionary approval process. "The legislative concerns addressed by the Subdivision Map Act and those underlying the (Coastal) Act are not the same," Judge Turner wrote in the unpublished part of the opinion. The Case: La Fe, Inc., v. Los Angeles County, No. B119186, 99 C.D.O.S. 5299, 1999 Daily Journal D.A.R. 6715, Filed June 30, 1999. The Lawyers: For La Fe: Robert S. Rein, Saphier, Rein & Walden, (310) 556-0100. For the Coastal Commission: Jamee Jordan Patterson, deputy attorney general, (619) 645-2001. For Los Angeles County: Thomas Faughnan, deputy county counsel, (213) 974-1811.

The next big thing in water quality management — measuring specific pollutants in bodies of water and setting limits for those pollutants — is likely to impact land use and planning, but the exact ramifications remain unclear. After years of delay, federal and state agencies are developing definitions to show how much pollution can be allowed in a water body before it becomes polluted. These definitions are known as total maximum daily loads, or TMDLs. Section 303(d) of the federal Clean Water Act mandates the TMDL process, which requires states to identify all water bodies that do not meet water quality standards, and then create TMDLs for them. Although Congress approved the Clean Water Act in 1977, states ignored TMDLs for years while cleaning up obvious sources of pollution, such as sewage treatment plants. But following a series of lawsuits and the progress made cleaning up some pollution, the focus has now shifted to cleaning up pollution from other sources, such as agriculture, forestry operations and stormwater runoff. TMDLs will play a big part in this latest effort. California currently has more than 500 water bodies that fail to meet federal water quality standards. And according to a recent state report on TMDLs by the California State Library's Research Bureau, TMDLs have "a long reach into the realm of land management practices." " he TMDL program is to become a basis for not just NPDES (National Pollutant Discharge Elimination System) permit effluent limits and conditions, but also many other water pollution control efforts that fall outside the traditional realm of water quality regulation," said the report, which pointed to watershed protection efforts. According to the Research Bureau report, "TMDL requirements may prove to be the most important change in environmental law in California since the Endangered Species Act, and the most significant change in water quality control since the Clean Water Act itself." The state government has taken notice. According to a recent California legislative analysis, "TMDL requirements have the potential to greatly expand the scope, impact, and economic cost of water quality regulations, and could change the way that the agriculture, forestry and construction industries do business." Still, it may be many years before the full impact of TMDLs are felt. "It's really at the embryonic stages," said Mark Gold, executive director of Heal the Bay, an environmental group focused on Santa Monica Bay. "It's too early to say," what the impact will be, said Doug Brewer, a water quality specialist with Jones & Stokes, an environmental consulting firm in Sacramento. Efforts to create TMDL standards are under way, driven by litigation from environmental groups as well as direction from the federal EPA. Development of the actual TMDL standards could take several years as scientific data is examined. In a recent lawsuit settlement involving TMDLs for 156 waterways in Los Angeles and Ventura Counties, the EPA was given 13 years to develop 92 TMDLs, although the first TMDLs are due next year, Gold said. Still, TMDLs are an important tool for environmental organizations like Heal the Bay. Gold called TMDLs "a tool to ensure that watershed protection is a high priority in planning decisions." For example, the TMDL program could restrict or prevent the discharging of additional treated wastewater into a river with high pollution levels — thus halting a proposed development. TMDLs, Brewer said, will "hopefully shed some light or understanding on the assimilative capacity of a river to accept waste material." Brewer is currently working on a TMDL project for the San Joaquin River, which catches wastewater from farms and cities in the San Joaquin Valley. TMDLs will focus more attention on agricultural activities, Brewer said, because they will show measurements of pesticides and herbicides in water supplies. If wastewater can't be sent into a river, cities will have to curtail development, or more likely, to reuse and recycle their wastewater. That could bring added costs to development or resistance from citizens who are uncomfortable about reusing wastewater. According to the state report, regulators of many of the state's coastal waterways are either being required to develop TMDLs, or are likely to get hit with lawsuits demanding they set TMDLs. These waterways include 18 north coast watersheds, Newport Bay, portions of Santa Monica Bay, San Francisco Bay and the Sacramento/San Joaquin Delta. California lagged in doing much about TMDLs until this year, when Gov. Gray Davis' budget included $9.9 million for them. Of that figure, $6 million was provided by the federal government. The money will be used by the state's nine regional water quality control boards to develop TMDLs. It is the first time money has been specifically allocated for such work. But based on the number of waterways that need to be studied, "that's a drop in the bucket," said Brewer. The state Legislature also is beginning to deal with TMDLs. AB 982, introduced by Assemblywoman Denise Ducheny, D-National City, was approved by the Assembly and passed the Senate Committee on Environmental Quality before the summer recess. The measure would set up an advisory group to help the State Water Resources Control Board as it develops a more comprehensive TMDL program, and ensure the Legislature is kept up to date on the board's activities. An analysis of AB 982 said that "the regulatory cost of this program ranges from $5 million to $1 billion, excluding the cost to industries and urban areas of pollution controls needed to meet more stringent standards." EPA regulations do not specify the process by which states should develop TMDLs. Furthermore, the state has not adopted guidelines for TMDL development, according to the Research Bureau. The Research Bureau report stated, "The costs of additional pollution controls to meet the load allocations and wasteload allocations could be very high." The report noted that municipal and industrial dischargers are worried that they will get stuck with the costs of cleaning up waters to meet TMDLs. The Sacramento Regional County Sanitation District filed suit against the State Water Resources Control Board in June 1998 over TMDLs, alleging that the state did not consider the economic costs when it adopted its Section 303(d) list of polluted waterways. The California Association of Sanitation Agencies has intervened in the Sacramento district's suit, while the Natural Resources Defense Council, and Santa Monica and San Francisco Baykeepers have joined the state's defense. Contacts: Fran Vitulli, spokesperson, State Water Resources Control Board, (916) 657-0941 Mark Gold, Heal the Bay, (310) 581-4188 Doug Brewer, Jones & Stokes, (916) 737-3000 The report: TMDLs: The Revolution in Water Quality Regulation, www.library.ca.gov/html/statseg2c.cfm

The City of Anaheim's attempts to bar a proposed adult cabaret from an industrial area were unconstitutional and the city must approve the business's permits, the Fourth District Court of Appeals has ruled. According to the unanimous appellate court decision, three city actions failed constitutional muster: an attempt to prevent "secondary effects" of an adult business, a retroactive amendment to the zoning ordinance, and denial of the strip club to protect the city's image. Presiding Justice David Sills ridiculed the amended ordinance that prevented adult businesses within 100 feet of a freeway to protect the image of the city that is home to Disneyland and the Anaheim Angels. " city's image is more a matter for the poets and journalists than the courts," Sills wrote. Badi Abraham Gammoh had proposed opening the Funtease theater on a site visible from the Riverside Freeway. "Signs and outward appearances can, of course, be regulated," Sills wrote. "But ‘visual blight' can easily be prevented by lesser intrusive means than the complete preclusion of an adult business from any major roadway. … No issue of compliance with a city sign ordinance is before us, and the record indicates that Gammoh is not proposing to construct a huge billboard with pictures of scantily-clad woman in tacky pink flashing neon, ‘Come to Gammoh's Flesh Emporium.'" Anaheim has spent much of this decade in court over its attempts to preclude adult businesses. In 1993, a federal district court struck down a provision in the city's zoning ordinance because it gave the Planning Commission so much discretion in granting use permits for adult entertainment businesses that the measure functioned as an illegal prior restraint on free speech. After the decision in that case, Dease v. City of Anaheim (C.D. Cal 1993) 826 F.Supp. 336, the city eliminated the discretionary features from its ordinance and required the Planning Commission to approve an adult cabaret that met the criteria. The new ordinance required adult businesses to be more than 400 feet from any residentially zoned area. In August of 1994, Gammoh submitted an application for business featuring "exotic strip tease dancers" in an industrial section of Anaheim next to the Riverside Freeway. The city responded within days by implementing a 45-day moratorium on adult business permits in an industrial zone. During the moratorium, Gammoh filed a lawsuit for a write of mandate and for damages to his civil rights. On October 10, 1994, the city denied Gammoh's application because his site was within 400 feet of a slender and vacant residentially zoned lot, and because it had inadequate parking. Two weeks later, to satisfy the parking concerns, Gammoh proposed scaling down the operation in what the city treated as a new application. In December of 1994, the city rejected the new application because the site was 150 feet from a residentially zoned property, and because it conflicted with a brand new ordinance that made the area off-limits to sex-oriented businesses and prevented adult entertainment within 100 feet of a freeway. The following month, Orange County Superior Court Judge Donald Smallwood denied Gammoh's request for an injunction. When the matter came up for trial a year later, Orange County Superior Court Judge Tully Seymour ruled that Smallwood had decided the issues and there was nothing left to litigate. Gammoh then appealed for permission to open the Funtease theater in what he described as a "God-forsaken industrial wasteland." The city argued that it was trying to protect surrounding residential areas from an adult business's secondary effects, a concept the U.S. Supreme Court upheld in City of Renton v. Playtime Theaters, Inc., (1986) 475 U.S. 41. But the appellate court said the city's ordinance — as applied — was unconstitutional. The only nearby residential property was "a single wedge-shaped vacant lot next to a freeway on which no one in his or her right mind would ever construct a residence," Sills wrote. Furthermore, since Gammoh filed his initial application, the city had rezoned the parcel for industrial use. "The salient fact in the present case, of course, is that no ‘secondary effects' on real human beings living in a real residential area were ever realistically possible when Gammoh first applied for his permit, and any doubt was later removed when the property was rezoned," Sills wrote. After Gammoh filed his first application, the city announced plans to revitalize the area with "upscale" industry, thus precluding a strip club. The appellate panel did not address whether a city could legitimately bar an adult business in a redevelopment zone, although Sills pointed out in a footnote that "cities cannot, consistent with the First Amendment, use redevelopment zones as a creative way to censor speech about sex." Instead, the court struck at the city's after-the-fact preclusion. "Essentially, it rezoned Gammoh's property to preclude any kind of adult businesses on the ground that they would hinder ‘redevelopment.' If a city can do that, then a city has the de facto discretionary power to deny an otherwise nondiscretionary permit by the simple expedient of saying that an adult business would be inconsistent with some hoped-for ‘upscale' development," Sills wrote. The court called Anaheim's freeway exclusion "unconstitutional on its face." A city may crack down on visual blight, but the mere existence of an adult business does not constitute blight. City officials have since petitioned the court to reverse the ruling, and they vowed to seek a state Supreme Court hearing if the appellate court refused to reconsider. The Case: Badi Abraham Gammoh v. City of Anaheim, No. G020502, 99 C.D.O.S. 5247, filed June 29, 1999. The Lawyers: For Gammoh: Roger Jon Diamond, (310) 399-3259. For Anaheim: Jeffrey A. Goldfarb, Rutan & Tucker, (714) 641-5100.