The Ninth U.S. Circuit Court of Appeals has ruled the City of San Diego’s method for suspending and revoking nude dancing licenses is unconstitutional because it allows an adult business to be closed down while the business appeals the city’s action. The Ninth Circuit said adult businesses have the right to prompt judicial review of suspensions and revocations. The court also ruled businesses that engage in protected speech, such as nude dancing clubs, must be allowed to stay open until a judge rules on the suspension or revocation. The court expanded on its 1998 ruling in Baby Tam & Co., Inc. v. City of Las Vegas, 154 F.3d 1097, in which the court held that a business had a right to prompt judicial review when a city denied a permit application. "We conclude that we must extend Baby Tam’s requirement of an opportunity for a prompt hearing and decision by a judicial officer in license denial cases to license suspensions or revocations as well," Chief Judge Procter Hug Jr. wrote for the unanimous three-judge panel. San Diego’s ordinance and California statutes do not contain "express time limits or guarantee of a prompt hearing or decision, and are therefore similar to the Nevada statute found to be inadequate in Baby Tam," Hug wrote. Moreover, under California law, the granting of a stay of the revocation or suspension pending a judicial decision is discretionary, not mandatory. Thus, San Diego’s scheme lacks sufficient judicial safeguards and could result in an unconstitutional suppression of free speech, the court ruled. Courts have consistently ruled that strip clubs, although they are often unpopular land uses, must be allowed to locate somewhere within a city. The San Diego case is another in which the courts scrutinized a method for a city to shutter a business with live adult entertainment. The case came about when San Diego cited 4805 Convoy, Inc., for violating two rules of its 1987 nude entertainment license. An inspector found that during an amateur night, unlicensed women danced topless within six feet of patrons. Under San Diego municipal code, nude dancers must be licensed by the city and they must remain at least six feet from patrons. On October 3, 1995, the city suspended Convoy’s license for 14 days. Convoy then proceeded through the city’s administrative appeal process — during which the 14-day suspension was held in abeyance — and it filed a lawsuit in federal district court. After the city reduced the license suspension to seven days, Convoy sued in San Diego County Superior Court. On April 7, 1997, the trial court ruled for the city, although the judge stayed the license suspension pending the outcome of the federal court lawsuit. In federal court, Convoy argued that San Diego’s provisions for the issuance, suspension and revocation of nude entertainment permit licenses were unconstitutional. Convoy argued that San Diego failed to provide adequate procedural safeguards to prevent suppression of protected speech. Southern District of California Judge Napoleon Jones disagreed and granted the city summary judgement on October 22, 1996. In reversing Judge Jones, the Ninth Circuit considered challenges to San Diego’s revocation and suspension procedures, but not its licensing provisions because Convoy was not subject to getting a new license. Hug cited the U.S. Supreme Court’s decision in FW/PBS v. City of Dallas, 493, U.S. 215 (1990). The ruling, on which the Ninth Circuit based its Baby Tam decision, mandated at least two procedure safeguards. "First ‘the licensor must make the decision whether to issue the license within a specified and reasonable time period during which the status quo is maintained.’ … Second, ‘there must be the possibility of prompt judicial review in the event that the license in erroneously denied.’" Cities may get around the prompt review mandate so long as the status quo is maintained indefinitely because then there is no risk of suppressing protected speech, Hug reasoned. However, the San Diego municipal code and state law do not guarantee the status quo will be maintained. The Ninth Circuit enjoined San Diego from enforcing license suspension or revocations during the 90-day period for filing suit, or from enforcing a suspension or revocation until a lawsuit has been decided. "This injunction will remain in place so long as the city’s ordinance and the California statutory scheme fail to provide for a prompt hearing and decision by a judicial officer, or for the maintenance of the status quo pending a judicial decision on the merit," Hug wrote. The Case: 4805 Convoy, Inc., v. City of San Diego, No. 97-55295, 99 C.D.O.S. 5594, 1999 Daily Journal D.A.R. 7159, filed July 14, 1999. The Lawyers: For Convoy: A. Dale Manicom, (619) 232-3255. For San Diego: Grant Richard Telfer, deputy city attorney, (619) 533-5800.

The complex financial relationships among taxpayers, local governments and the state is receiving more study than at any time since the 1978 passage of Proposition 13. But "fixing" local government finance is turning out to be exceedingly complex and may require the approval of voters. Lawmakers threw a couple hundred million dollars worth of bones to local government with the $81 billion 1999-2000 state budget. But many people have their eyes focused on a state constitutional amendment that could appear on a 2000 ballot. The measure might cap a 1993 property tax shift, make structural changes to local government finance, and possibly even alter the existing method of allocating sales tax revenue. However, no one knows for sure because drafting the constitutional amendment had not begun as of late June, said Debbie Beltram, an aide to Senate Budget Committee Chairman Steve Peace (D-El Cajon), who has taken the leading role. Peace, who conducted local government finance hearings around the state earlier this year, and others were awaiting Gov. Gray Davis's action on the local government portion of the state budget. "We have to wait and see what the local government pieces look like. Then it will be a leadership discussion on who's going to carry it and what's going to be included," Beltram said of the constitutional amendment. Peace has assured Davis that he will not move forward with a constitutional amendment that Davis opposes, she added. While city and county officials continue to howl about getting shortchanged, the state budget adopted by lawmakers did slow the protest. The budget earmarks $220 million for cities, counties and special districts, but it makes no structural reforms. Most importantly, the Educational Revenue Augmentation Fund (ERAF) — which shifted property taxes from counties and cities to schools — remains unchanged. "It's certainly not everything we dreamed it would be, but it's a first step," David Jones, a lobbyist for the League of California Cities, said of the budget. "Our real hope in this budget is the promise of real reforms and real protections of our revenues in the future. … Having us live under the threat of a future property tax shift does not make sense. We're desperately seeking protection from future lawmakers." The California State Association of Counties also tried to put a happy face on the budget. For the first time, the budget contains local relief partially based on ERAF losses, CSAC noted. "CSAC is encouraged by the Legislature's action to move local government finance to the forefront," Executive Director Steven Szalay wrote after the budget passed. The budget approved by lawmakers provides one-time subventions to local government in the following forms: $75 million to cities and counties based on population; $75 million to cities, counties and special districts in proportion to ERAF losses; $50 million for jail booking fees cities are forced to pay counties; and $20 million for libraries. However, counties annually lose $1 billion because of ERAF, even with backfills such as Proposition 172 money for public safety. Cities lose $427 million a year and special districts are out $284 million. Thus, the one-time subventions amount to about 10% of what local government would have received without ERAF and subsequent backfills. For example, the Bay Area city of San Carlos will receive about $79,000 in property tax subventions and $30,000 for booking fees, Assistant City Manager Brian Moura said. However, ERAF costs the city about $750,000 annually. Shopping malls and big boxes (SUBHED) The advent of ERAF in 1993 only exacerbated what some observers call the "fiscalization of land use." When Proposition 13 eliminated the ability of City Councils and Boards of Supervisors to raise property tax by fixing tax rates statewide, local entities started aggressively pursuing sales tax generators at the expense of other development. Local government also began issuing bonds — some riskier than others — to help developers of desirable projects, jacked up impact fees and created various assessment districts. With ERAF cutting further into the property tax base, sales tax became even more important Land-use decision-makers need a different set of rewards than now exists, said Jones, of the League of California Cities. "Give local government the incentives to do the right things for the long-term health of this state," he said. The emphasis should be on high-paying jobs, not retail outlets, he said. But, Jones noted, the pursuit of sales tax is not always reduced to approving a Wal-Mart on the edge of town to the dismay of downtown's mom and pop merchants. Business to business sales can generate big amount of sales tax, as it does in Silicon Valley, he said. Among the entities considering state and local fiscal reform is the Commission on Local Governance for the 21st Century. The governor and Legislature appointed the commission late last year to examine the Cortese-Knox Local Government Reorganization Act of 1985, which guides Local Agency Formation Commissions. But the 21st Century commission has learned that dividing up the money may be the biggest factor in drawing jurisdictional lines. According to Ben Williams, the commission's executive director, several themes have emerged from testimony during hearings around the state, among them, the obstacle posed by revenue-neutrality. The 1992 revenue-neutrality law requires new cities to make counties fiscally whole. Revenue-neutrality, which arose because of county's fiscal plight, means communities that would like to incorporate would have to give property and/or sales tax revenue to the county for things like public health, welfare, elections and jails — thus decreasing the would-be city's funding for local law enforcement, parks and community planning that likely forced the incorporation effort. "The cities feel the counties are trying to hold them up to save money. But the counties make a valid point — most of a county's costs continue after an area incorporates," Williams said. Another common sentiment heard at commission hearings regards the missing connection between responsibility to provide a service and the ability to raise revenue for the service, Williams said. Also, local government leaders complain that the state has replaced discretionary property tax revenues with money that has strings, such as Proposition 172 sales taxes for public safety. Top Of The Agenda SUBHED Theories vary as to why local government finance has become a hot topic, but most people agree rapidly rising state revenues, and vocal campaigns from cities and counties have are factors. "We hear about it at every meeting either directly or indirectly," Williams said. It is not much of an exaggeration to say that everyone has a committee or task force examining local government finance. About 10 major efforts are underway, and various reports and recommendations are due during the last half of the year. Among the major groups in action are Williams' 21st Century commission, the State Municipal Reform Advisory Team appointed by Controller Kathleen Connell, Assembly Speaker Antonio Villaraigosa's Commission on State and Local Government, and the California Governance Consensus Project. The Legislative Analyst's Office focused attention on the issues when it issued a report in February called "Shifting Gears: Rethinking Property Tax Shift Relief." More than anything, the LAO report emphasized the complexity of the problem and the need for an overhaul. The Legislature appears to have ignored, at least for now, the LAO's bottom line. "We recommend the Legislature reject the notion of mitigating each local government's losses," the report stated. "Instead, we recommend the Legislature use any relief funds to help transform California's system of local government finance into one that reflects modern needs and preferences of local communities." A broad structural change appears likely to take the form of the constitutional amendment on next year's ballot. But packaging the amendment for voters will be "very difficult," Williams warned. "It's not clear that the voters think that there is a problem." Jones, from the League of California Cities, said support from the business community — and some sort of tax reduction — will be necessary to interest voters in this arcane subject. Contacts: Ben Williams, Commission on Local Governance in the 21st Century, (916) 322-9906. David Jones, League of California Cities, (916) 658-8200. Debbie Beltram, Sen. Steve Peace's office, (916) 445-6767. Brian Moura, City of San Carlos, (650) 802-4210.

Sewer connection fees and capacity charges are not the same as development fees imposed as a condition of project approval, meaning they are not subject to the conditions of the Mitigation Fee Act, The Fourth District Court of Appeal has ruled. The court decided that a hotel builder was not entitled to a refund of unspent sewer connection fees, as the developer might be to unspent development fees. The unanimous three-judge panel ruled that the Government Code (§ 66013) specifically excludes sewer connection fees and capacity charges from refund provisions of the Mitigation Fee Act, frequently known as AB 1600. In 1989, Taj Development Corp. and Chandulal Patel requested a sewer connection permit from Capistrano Beach Sanitary District for the Dana Point Hilton. Taj paid $393,000 to connect the hotel to the sewer system. Five years later, Taj sought a refund of the unexpended portions of the fee. The district rejected Taj's claim, and the two sides then sued each other. Taj argued it spent $750,000 to construct sewer and water lines and the $393,000 connection fee was "governmental greed." The district at first did not argue the Mitigation Fee Act did not apply to the connection fees. Later, the district did contend the connection fee was not a development fee and, therefore, Taj had no right of refund. Orange County Superior Court Judge C. Robert Jameson sided with the district, and, on appeal, so did the Fourth District, Division Three. The appellate panel noted two statutory schemes were in effect at the time Taj paid its fees. The Mitigation Fee Act (§§ 66000 — 66008) set rules for imposing development fees and includes a section that allows for the refund of the unspent portion of fees under certain circumstances. Also in effect in 1989 was a section of the Government Code addressing local agency service fees and charges (then § 54991, now § 66013). "This section did not authorize a refund for connection fees," wrote Presiding Justice David Sills. "Instead, it provided for a reduction of future connection fees if earlier fees created ‘revenues in excess of actual cost.'" In 1998, the California Building Industry Association sponsored legislation in response to the Taj case. As introduced, SB 1760 would have placed sewer and water connection fees in the same category as other development fees. However, the Assembly amended the bill to delete language requiring that water and sewer fees be treated similarly to development fees. Justice Sills quoted an Assembly Local Government Committee bill analysis which said, "‘This bill requires only that capacity charges be accounted for. It does not increase any restrictions regarding the imposition, use, or reporting of a connection fee, the type of fee at issue in Taj. This bill contains no provisions for the refund of either connection fees or capacity charges.'" The Legislature further amended and eventually passed SB 1760, which became Chapter 644 of the Statutes of 1998. "Although it provides for stricter accounting of capacity charges (but not water or sewer connection fees), it does not provide a refund remedy," Sills wrote. Taj argued that the sanitary district imposed the fee on the project as part of the development approval process to defray costs of public facilities related to the project. "Taj's argument," Sills wrote, "completely ignores the existence of former § 54991 (now § 66013) which specifically addresses the fee it paid. And Taj ignores the key language defining a ‘fee' subject to the refund provisions under the Act: The fee must be charged by the local agency in connection with approval of a development project. … No evidence in the record shows the District conditioned the approval of the hotel project on payment of the fee or in any way imposed the fee in connection with issuing or approving a permit for development." Sills continued, "The language in the Fee Mitigation Act is clear. The repetition of the phrase ‘as a condition of approval of a proposed development' throughout the chapter strongly suggests the refund provisions of the Act apply to ‘development fees.' Taj's fee is governed by § 54991 (now § 66013) which dealt with the rates imposed to connect the hotel to the public sewer system." The Case: Capistrano Beach Water District v. Taj Development Corp., No. G021735, 99 C.D.O.S. 3952, 1999 Daily Journal D.A.R. 5011, filed May 25, 1999. The Lawyers: For Capistrano: Gary Lee Gebler, (949) 833-3715. For Taj: Stephen M. McNamara, McNamara, Van Blarcom, McClendon & Leibold, (714), 639-6700.

Community empowerment appears to have been the overriding theme during June's local elections. Los Angeles voters approved a new city charter that calls for area planning commissions, Pleasanton and Scotts Valley voters rejected separate city council-approved subdivisions, and Ventura voters defeated a redevelopment area backed by the City Council. Meanwhile, school bond proposals had mixed results, with bonds in Northern California generally doing better than those in Southern California. Passage of the new Los Angeles City Charter is the most significant local government development of the year anywhere in the country, said Raphael Sonenshein, executive director of the Los Angeles Appointed Charter Reform Commission and a political scientist at California State University, Fullerton. Voters approved the new charter by a 60-to-40 ratio after both the appointed commission and the separate Elected Charter Reform Commission (the two had been rivals) backed the document. The new charter calls for creation of at least five area planning commissions and establishment of neighborhood councils. Supporters said the local bodies would allow citizens more input on development and other community issues. "I think it will have a dramatic impact on people's feelings about the land use process," Sonenshein said. "People won't have to go to as much trouble in order to be heard." Indeed, traveling across town and waiting through a giant agenda to provide testimony on a proposed variance discouraged average citizens, said David Diaz, policy analyst for the elected commission and an environmental planner at CSU, Northridge. "The meetings are going to be much more accessible," he said. The revised charter appears to give the five area commissions, which the mayor and City Council will appoint, authority over only minor land use issues, such as variances, conditional use permits and similar quasi-judicial matters. That is fine with Sonenshein. "It will not affect major projects that have citywide implications," he said. "It is not a regionalization of the Planning Commission. It is really a regionalization of the Board of Zoning Appeals." Besides the local planning commissions, the charter requires Mayor Richard Riordan to create the Office of Neighborhood Empowerment, name a general manager and select a seven-member commission, Sonenshein said. The goal is to complete criteria for appointments to neighborhood councils by July 1, 2000, the effective date for most provisions in the new charter. The neighborhood councils will be advisory only. However, Diaz noted, the new charter lets the City Council expand the mandatory powers of the area planning commissions and the neighborhood councils. "I view this as a major, historic victory for neighborhood groups, homeowner groups and environmental groups," Diaz said. Interestingly, proposals to expand the 15-member City Council to 21 or 25 members failed overwhelmingly at the polls. Each councilmember new represents about 235,000 constituents. The new charter's impact on the San Fernando Valley secession movement is unclear. The Los Angeles County Local Agency Formation Commission has begun preliminary steps for a massive study on the proposed break up of the City of Los Angeles. The vote for charter reform confirms secessionists are headed in the right direction, contended Jeff Brain, president of Valley Voters Organized Toward Empowerment. But, he added, "We feel the charter didn't go nearly far enough to satisfy the hunger in the Valley for change." Valley VOTE advocates self-governing boroughs, elected neighborhood councils and changes to the tax structure to help business, Brain said. He predicted additional charter revisions may arise as city leaders attempt to stave off Valley secession, as well as fledgling secession movements in Wilmington, San Pedro, Westchester and Playa Del Rey. Diaz, however, called the charter reform a defeat for Valley VOTE. If voters rejected the new charter, it would have given secession a green light. Instead, the election proved the city can come together to do something meaningful, Diaz insisted. Sonenshein predicted implementation of the new charter will focus attention away from secession for a while. "We've never billed this as the answer to secession," Sonenshein said. "We asked a different question: Can the city be better governed?" Participants and observers agree implementation of the new charter is key, especially because the majority of city councilmembers openly opposed or were ambivalent about the new charter. Riordan, however, championed charter reform, partly because it expanded his authority. Growth opponents win In Pleasanton, in Alameda County, 60% of voters rejected an 89-unit subdivision. The election was a referendum on a rezoning and planned unit development agreement for 46 acres that the City Council approved early this year. The developer, the DeSilva Group, poured $350,000 into a campaign to approve the referendum, or about $10 per registered voter. The DeSilva Group sent every voter a 100-page packet with aerial photos and numerous reports. However, anti-growth sentiment runs strong in Pleasanton these days. Pleasanton's vote on Measure P might be a precursor to balloting in several East Bay cities this November and in March of 2000 on a broad growth-control initiative backed by the Citizens Alliance for Public Planning. The measure would require a public vote for any general plan amendment, rezoning, specific plan or development agreement involving 10 or more dwelling units. Backers have submitted signed initiatives in Pleasanton, Livermore, Danville and San Ramon. A larger subdivision in Scotts Valley fared no better during June balloting when 61% of voters in the Santa Cruz County town rejected referendums on a general plan amendment and specific plan amendment that would have allowed 145 houses on a portion of 180 acres. Voters defeated the subdivision for three reasons, according to Stephany Aguilar, a councilwoman who opposed the project. The Glenwood development, proposed by Keenan Land Co. of Palo Alto, would have harmed rare plant and animal species, impacted a groundwater recharge area and added more vehicles to an already congested road intersection, she charged. While voter turnout in most jurisdictions was in the 20% to 30% range, 60% of Scotts Valley voters participated in the June referendum. Community Development Director Laura Kuhn said a different project elsewhere in town — by Kaufman & Broad — has stirred public interest because it contains lots of 3,200 to 6,000 square. "People seem to be opposed to projects that have lots with less than 10,000 square feet," she said. That opposition evinced itself in the vote on the Glenwood project, which proposed lots of 6,000 to 20,000 square feet. Interestingly, the city had originally approved a 276-unit development and golf course on the Glenwood site. But the recession of the early 90s caused the project to fall apart, Kuhn said. Scotts Valley voters may face another referendum in the fall, this time regarding a 70-unit apartment complex. Redevelopment loses Voters in Ventura defeated a referendum on midtown redevelopment by a 57-43 ratio. The $53 million project would have focused on two aging boulevards lined with retail shops and offices, and a shopping mall that is undergoing a city-subsidized renovation. Redevelopment opponents raised fears about eminent domain, increased taxes and public debt. While the city countered those arguments, voters at the very least indicated they did not like the way the city handled the proposed redevelopment district. Allen St. James, a midtown Ventura merchant and member of Ventura Citizens Against Redevelopment Excess, said the vote was partly a reaction to corporate welfare. An existing downtown Ventura redevelopment district has subsidized a Century Theater and a Ben & Jerry's Ice Cream shop, he said. "It (redevelopment) is a perfect thing to use for slums or places that need renewing, but it's not what is needed in midtown Ventura," St. James said. Mixed bag for schools. Voters backed six school bond measures and defeated four others. The winners were: Union School District in San Jose ($92 million), Morgan Hill Unified School District ($72.5 million), Golden Valley Unified School District in Madera ($30 million), Orcutt Unified School District ($15 million), and Cloverdale School District ($4 million). The losers were: Vista Unified School District ($96 million), La Mesa-Spring Valley School District ($33 million), Santa Maria-Bonita School District ($33 million) and Folsom-Cordova Unified School District ($18 million). Voters in the Albany Unified School District approved a $120 annual parcel tax to fund additional school programs. Contacts: Raphael Sonenshein, Los Angeles Appointed Charter Reform Commission, (714) 278-3521. David Diaz, Los Angeles Elected Charter Reform Commission, (818) 677-2904. Jeff Brain, Valley VOTE, (818) 501-5862. Laura Kuhn, Scotts Valley Community Development Department, (831) 438-2324. Allen St. James, Ventura Citizens Against Redevelopment Excess, (805) 643-8454. Citizens Alliance for Public Planning: http://home.att.net/~alliance

Dairy expansions in the southern San Joaquin Valley have slowed after Attorney General Bill Lockyer submitted legal challenges and an environmental group filed lawsuits. Lockyer and environmentalists have forced local planning departments to examine their practices in approving dairies, and to begin preparing environmental impact reports. "The issue seems to be focussing on cumulative impact," said Leonard Garoupa, Madera County's planning director. Prior to Lockyer's involvement and lawsuits filed by the Center on Race, Poverty and the Environment, counties throughout the region approved giant dairies with mitigated negative declarations, instead of mandating EIRs. But now several dairy developers have begun EIRs, and some counties are pursuing program EIRs related to dairy expansion. A program EIR could focus on the cumulative impacts of dairy growth and suggest broad policy alternatives, and it could reduce the need for extensive environmental review of each new dairy. The reason for all the concern: cow manure from dairies is a major polluter of water supplies. The studies now underway are expected to consider how additional dairies will affect native grasslands and wetlands, and the impacts of cow manure on water quality. The dairy issue appears ready-made for the newly elected Lockyer, whose environmentalist supporters had encouraged him to allow his office to comment on the adequacy of local CEQA reviews. His predecessor, Dan Lungren, stopped this practice. (See CP&DR, March 1999.) In April and May, the AG's office filed two petitions for writs of mandate in Tulare County, asking that special use permits be revoked and that there be full compliance with CEQA. No court action has been taken yet on the petitions, but the filing sent a strong signal that Lockyer intends to play a bigger role in land use and environmental issues than Lungren. "We've asked that CEQA be followed," said Lockyer spokeswoman Sandra Michioku. "The review of environmental impacts should be looked at." The San Joaquin Valley is home to many of the state's dairies, many of which are factory farms containing thousands of cows. Dairies have moved to the Valley because of urbanization in San Bernardino County's Chino Basin, a dairy producing area for decades. Despite environmentalists' concerns regarding habitat for endangered species and traffic congestion, the City of Ontario is moving ahead with plans to annex 13 square miles of what has been farmland. Early development plans call for 31,000 houses and apartments on the land proposed for annexation. "The dairy farmers are getting pushed out of the Chino basin both by rising land prices and also by increased environmental scrutiny," said attorney Luke Cole of the Center on Race, Poverty and the Environment. "They're coming over to the wild, wild west, which is Kern County, Kings County, Tulare County, and they're really taking advantage of lax environmental enforcement and planning departments that don't really have the capacity to oversee major dairies." Cole's organization sued Kings County in April over four of the five dairies it had approved for the J.G. Boswell Co., an international agricultural company based in Pasadena. Boswell officials then asked the county to rescind its approval of conditional use permits and said it would do an EIR instead. Boswell planned to build dairies for 55,000 cows on 7,000 acres in Kings County, according to the Fresno Bee. The reason for the change, Boswell's general counsel Edward Giermann said in a letter to the county, was "because of the California Attorney General's recent expressions regarding the need for Environmental Impact Reports in Tulare County. We think it is entirely possible such expressions could affect Kings County dairy activities too." In Kern County, a similar lawsuit was settled when Borba Dairies agreed to prepare an EIR, according to Planning Director Ted James. Ironically, the two proposed dairies in Kern County are for an area that had previously been designated for urban use. In Madera County, the situation caused that county's planning commission to delay a dairy approval recently, Garoupa said. In Tulare County, the attorney general's actions threaten plans for the Costa and Airosa dairies. Each dairy would be located on more than 500 acres, with most of the land used to spread cow waste. The Costa facility, for example, would use 577 acres, but only 164 acres would be for the dairy. Tulare County is the leading dairy county in the nation, with nearly 300 dairies in operation. There are 20 applications for new and expanded dairies pending, according to George Finney, assistant director of the county's resource management agency. Finney said a program EIR for dairies should be completed by the fall, which ought to help the county process applications faster. Most of the applications for dairies, he said, are in the remote parts of the county where there are few residences, a low water table and farmland is considered marginal. "There's nothing to harm by putting it there," he said. At the state level, the dairy industry is hoping that a proposed $1.8 billion state water bond will include money to help Central Valley counties grapple with the clean water issues raised by dairies' growth. The industry is asking for $20 million to help counties cover the costs of preparing program EIRs, and for help setting up a revolving fund for dairy and other animal farmers to improve pollution control activities on their properties, according to Gary Conover, a lobbyist for the Western Dairymen's Association. Money from the revolving fund would pay for such things as tailwater recycling systems, larger holding lagoons and better manure control systems. An earlier water bond failed to make it onto the November 1998 ballot. At that time, dairy groups were only asking for $10 million. But in light of the increased pressure placed on them to get their manure together — including recent inspections of farms by the federal EPA — that money request has doubled. As of mid-June, none of the money had been included in the water bond measure. Dairy operators "are beginning to have difficulty with banks funding new or expansion dairies ... due to the heightened environmental publicity," Conover said in a recent memo. Contacts: Gary Conover, lobbyist, Western Dairymen's Association, (916) 447-0700. Leonard Garoupa, planning director, Madera County, (559) 675-7821. George Finney, assistant director for long range planning, Tulare County Resource Management Agency, (559)733-6291. Ted James, planning director, Kern County, (805) 862-8616. Luke Cole, lawyer, Center on Race, Poverty and the Environment, (415) 495-8990. Bill Zumwalt, planning director, Kings County, (559) 582-3211.

A city may not use an interim ordinance to suspend the processing of development applications during a general plan update, the Fourth District Court of Appeals has ruled. The appellate panel threw out a City of San Juan Capistrano interim ordinance that stopped the processing of applications for certain large parcels. The ordinance, first adopted in June 1998, stalled Concorde Development's application for the 356-unit Whispering Hills subdivision and golf course on the eastern edge of the south coast city. The city can use an interim ordinance to deny subdivisions, use permits, variances, building permits and other entitlements if the public health, safety and welfare is at risk, the unanimous appellate panel said. However, Government Code § 65858, which authorizes interim ordinances, does not permit the city to stop the processing of applications. "A tentative subdivision map is by definition tentative," Presiding Judge David Sills wrote for the unanimous court. "Formal submission of the application to the city's planning department merely starts the wheels rolling and allows the city, the developer and the public to begin the environmental review process. It does not guarantee the landowner any right to an approval of the proposed project. As always, the city retains the power to deny it. (Govt. Code § 66474.)" Concorde in 1997 submitted its application for Whispering Hills, a development of $500,000 to $850,000 houses on 156 acres, with a golf course on the remaining 200 acres. Although the project fit with San Juan Capistrano's general plan, residents quickly complained about grading that the construction would necessitate, as well as traffic and density once houses were built. The City Council responded on April 21, 1998 by telling the planning department to begin studying possible amendments to the general plan's land use element. Two months later, the City Council adopted an interim, 45-day ordinance to suspend processing of certain development applications pending a comprehensive review and update of the general plan. The measure allowed special studies and environmental impact reports to go forward on effected projects, but it barred public hearings. The interim ordinance exempted developments with vested rights, subdivisions of 50 or fewer lots, senior citizen developments, commercial projects of less than 10 net acres, institutional projects, and agricultural operations permitted by underlying zoning. "While the city denies it," Judge Sills wrote, "Concorde argues the effect of the exemptions was to exclude every parcel within the city except a small handful that have no present development plans — and, of course, the Whispering Hills project." In July 1998, the City Council extended the ordinance for 10 months and 45 days. (In May of this year the city extended the ordinance for another year.) Concorde filed a complaint for declaratory relief and a petition for writ of mandate and prohibition. But Orange County Superior Court Judge Barbara Tam Nomoto Schumann denied the petition. The Building Industry Legal Defense Foundation then filed a petition for writ of mandate in the Fourth District Court of Appeal, Division Three. The appellate court set aside Schumann's ruling and issued a preemptory writ of mandate declaring the city's ordinance invalid. At the appellate court level, the city argued that processing specific proposals during the general plan update was pointless. The city also contended Government Code § 65858 authorizes the city to stop formal processing of development applications. Not so, said the appellate court. The statute providing for "temporary interim zoning ordinances" has been around for decades with only minor amendments. "Although the Legislature could have tied adoption of an interim ordinance to the submission or processing of a development application, it chose to set the bar higher, restricting its application to situations where an approval of an entitlement of use was imminent," Sills wrote. The opinion continued: "Interim ordinances, often referred to as ‘stop-gap' or ‘incubation period' ordinances, prohibit a property owner from using his or her property for a specified use for a limited period of time. (CEEED v. California Coastal Zone Conservation Commission (1974) 43 Cal.App.3d 306, 314.) They protect and promote the planning by, among other things, prohibiting the introduction of potentially nonconforming land uses that could defeat a later adopted general plan or zoning ordinance. (216 Sutter Bay Associates v. County of Sutter (1997) 58 Cal.App4th 860, 869.)" The Subdivision Map Act establishes the procedure for processing development applications and "a city cannot use an interim ordinance as a backdoor method to modify the rules," the court said. The Case: Building Industry Legal Defense Foundation v. Superior Court of Orange County, No. G024456, 99 C.D.O.S. 4776, 1999 Daily Journal D.A.R. 6133, filed June 17, 1999. The Lawyers: For BILT: Robert I. McMurry, Nossaman, Guthner, Knox & Elliott, (949) 833-7800. For City of San Juan Capistrano: John R. Shaw, Woodruff, Spradlin & Smart, (714) 564-2603.

RICHMOND RE-INVENTS A FORD PLANT AS HOUSING Thirty years after the start of the historic preservation movement, a debate has arisen in the preservation community on how best to save old buildings. Two camps have emerged: let's call them the Authenticizers and the Pragmatists. The Authenticizers are purists in preservation matters, and believe that buildings should be maintained, or returned, as closely as possible to their original condition and use. The Pragmatists, for their part, see the old building as a point of departure for adaptive reuse. Pragmatists see nothing wrong in making alterations here and there, although such projects, in their most extreme form, risk remodeling the building so dramatically that its historic form may be obliterated. Extreme examples of adaptive reuse cited in Stewart Brand's excellent book, How Buildings Learn, include the group of Quaker Oats grain silos in Akron, Ohio, that were converted into a hotel, and an Italianate house on the East Coast that became a McDonalds. Another example of extremity here in California is the proposed Ford Point in the waterfront area of the City of Richmond. In this extraordinary project, a mothballed Ford factory dating from 1931 is to be converted into 213 units of live-work housing, with some extra space left over for office space and a museum of the building's earlier career as an automobile assembly plant. The building is the last remaining structure on the West Coast designed by Albert Kahn, a prolific Detroit architect who provided both fancy-dress corporate buildings — including the immense, former General Motors headquarters building in Detroit — as well as countless factories that are notable for unpretentious elegance. Beyond its interest as adaptive reuse, Ford Point might symbolize another ongoing phenomenon of recent years: the gentrification of California's industrial waterfronts. Richmond is among a number of cities, including Long Beach, Suisun City and Monterey, that have put a great deal of energy into redesigning their outdated waterfronts into places of recreation, tourism and up-scale housing. We're not going to spend much time on Richmond's waterfront site plan. The plan is admirable in its intent to create a stimulating community on and near the waterfront with an array of uses, including a commercial/industrial park, a shopping center, a mixed-use residential community with 2,200 housing units, the Regatta Center for Research and Development, laboratories for the state Department of Health Services, and a UC Berkeley research field station. The bad news is the physical planning itself is improvised and casual. Here, history has been both a villain and a hero. It was probably difficult or impossible to superimpose a more regular pattern of streets onto the large, irregularly shaped waterfront parcels that are the vestiges of Richmond's industrial past. Still, there is something suburbanizing about some of the parcels, with inward-looking circulation systems, that are regrettable, if not entirely avoidable. There is little cause for regret, however, at Ford Point. Although the proposal may seem improbable at first glance, the actual diagram of the project is convincing as housing. The design is notable for finding new possibilities in the building's existing shape. Particularly ingenious is the way in which designers have fit the units inside the former Ford plant. The live-work units are arranged like rowhouses inside the immense shell of the automobile factory, with pedestrian alleys in front and behind. Each unit is located directly under one of the "teeth" atop the saw-tooth roof of the Ford building, which originally provided natural light to the factory. The added ceiling height provided by the old vertical skylights allows the designers to give each live-work unit a bottom floor, a mezzanine level up half a flight of stairs, and an upper loft space up another half flight of stairs. To provide light and air, the designers have removed part of the roof while leaving the structural skeleton intact. This concept makes the pedestrian alleys into open-air spaces without changing the façade or the basic shape of the building. These alleys form the public or semi-public circulation system inside the immense building. On the exterior, architects have marked these pedestrian entrances with tower-like "way-finding beacons" that stand forward from the historic façade. These are the most conspicuous changes to the original building. The plan also calls for 129,000 square feet of office space, 13,000 square of "specialty retail," the museum and leasing offices. Johnson Fain Partners is the managing architect for Ford Point, and has assistance from Michael Willis & Associates, David Baker Associates Architects (loft design) and Carey and Co., Inc (restoration architecture.) The developer is Forest City Enteprises of Cleveland, Ohio. Despite the creativity of the reuse, Ford Point is one of those rare projects that succeeds as both historic preservation and adaptive reuse. Here, perhaps, is one place where the Authenticizer and the Pragmatist camps in the preservation movement are reconciled. Admittedly, it is easier to build new uses inside the immense shell of a former factory or warehouse than it would be inside a Victorian house. Still, there is more to admire in Ford Point than ingenuity. The scheme has created, at least on paper, a place that looks like a good place to live and start a business. It has found a manner to use the existing spaces and profile of the building in ways that were never imagined by the original architect. And if the housing is successful commercially, the building will be safe for decades. The "extreme" solutions of adaptive reuse don't always work well with the original structure. In the case of Ford Point, however, the extreme solution is also the best fit.

Although they appeared to lose on the most basic issue, municipal and environmental lawyers are claiming victory in the U.S. Supreme Court's recent Del Monte Dunes case. They claim that government agencies dodged a bullet when the Supreme Court refused to extend the so-called Nollan/Dolan test to takings cases. In Del Monte Dunes v. City of Monterey, 99 C.D.O.S. 3846, the Supreme Court granted property owners the right to a jury trial in some regulatory takings cases if they are brought against state or local governments under federal civil rights law. On a 5-4 decision, the court upheld a $1.45 million jury award against the City of Monterey, which denied an oceanfront residential development in 1986. No sooner had property-rights advocates claimed victory, however, than municipal lawyers, the American Planning Association and other groups sympathetic to the City of Monterey's case began arguing that they had won as well. The reason? The Supreme Court had rejected that portion of the Ninth U.S. Circuit Court of Appeals' ruling concluding that the Nollan/Dolan "rough proportionality" rule should be applied to takings cases in which the government agency actually denied development permits. The day after the ruling was handed down, the American Planning Association issued a press release headlined: "Supreme Court Upholds Land-Use Planning Authority." And land-use law guru Daniel J. Curtin, author of Curtin's California Land Use and Planning Law, also hailed the court's ruling, calling it "the first unanimous decision in years by the high court on such an important takings issue." When the Supreme Court's ruling in Del Monte Dunes was first handed down on May 24, it appeared to be a clear victory for property owners. Monterey had denied five different applications for the property, even though the proposed project got smaller each time. The property owner sued in federal court under the federal civil rights act, 42 U.S.C. § 1983. A judge ruled that the property owner had the right to a jury trial. The jury found a temporary taking and awarded $1.45 million in damages. The Ninth U.S. Circuit Court of Appeals affirmed the judge's ruling and the $1.45 million award. In a narrow decision, the Supreme Court did the same. Property-rights lawyers hailed the ruling as a clear victory. "It's going to make people take notice that when they act this way, there is a penalty," proclaimed Michael Berger, a prominent property rights lawyer who represented Del Monte Dunes. (CP&DR Legal Digest, June 1999.) Underneath the obvious victory, however, was a broader-based ruling on the part of the Supreme Court to reject the Ninth Circuit's decision to apply the Nollan/Dolan doctrine. Based on two Supreme Court rulings (Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374), the Nollan/Dolan doctrine imposes a higher level of judicial scrutiny in exactions cases. The critical concept is "rough proportionality" — that is, when imposing a "physical" exaction such as an easement, a government agency must ensure that the impact of the exaction is approximately proportional to the impact of the project on the problem that the exaction is trying to ameliorate. In the case of Dolan, the Supreme Court threw out a requirement that an appliance store provide a bike path across its property in exchange for a building permit, claiming the city had done no analysis on the relationship between the expanded store and potential bike traffic. Since 1992, the Nollan/Dolan doctrine has been applied only to exactions cases, not takings cases. Ruling in the Del Monte Dunes case after Dolan was issued, the Ninth Circuit applied the Nollan/Dolan doctrine in the takings context — stating, essentially, that the denial of the Del Monte Dunes project was not "roughly proportional" to the potential impact the project might have on the environment and the community. "The government agencies were very scared that the Supreme Court might uphold this," said Katherine E. Stone, a municipal lawyer who specializes in land-use cases. In particular, said Stone and others, government agencies feared that Justice Antonin Scalia, who invented the Nollan/Dolan doctrine, would seize the opportunity to expand it. However, the Supreme Court did not do so. In the plurality opinion, Justice Anthony Kennedy dispensed with the Nollan/Dolan doctrine quickly and easily. "The rule applied in Dolan considers whether dedications demanded as conditions of development are proportional to the development's anticipated impacts," he wrote. "It was not designed to address, and is not readily applicable to, the much different questions arising where, as here, the landowner's challenge is based not on excessive exactions but on denial of development." In separate opinions — which included some dissent — the other justices, including Scalia, concurred with that portion of Kennedy's ruling. Georgetown University Law Center professor John Echeverria, who represented several environmental groups in the case, said the rejection of the Ninth Circuit's ruling on the rough proportionality issue was important for several reasons. Among other things, he said, the heightened scrutiny required under the Nollan/Dolan doctrine shifts the burden of proof from the property owner to the government agency. But Berger, the winning attorney, said the rough proportionality angle was overblown. "I think these people overreacted to what the Ninth Circuit said and paid no attention to what the Ninth Circuit did," he said. The Ninth Circuit found ample reason to uphold the takings award on its own merits and added the Nollan/Dolan points at the last minute because the Supreme Court issued the ruling after Del Monte Dunes had been briefed before the appellate court, he said. Pacific Legal Foundation lawyer James Burling, who filed an amicus brief in the case, also downplayed the significance of reversing the Ninth Circuit's ruling on Nolan/Dollan. Burling noted that the court upheld the judge's instructions to the jury, which included advice to consider whether a "reasonable relationship" existed between the problems presented by the project and the city's denial. "The cities were arguing that there should not be any analysis of the justification of the denial," he said. With "reasonable relationship," he said, "we don't have to talk about rough proportionality." While conceding Burling's point as far as it goes, Echeverria claimed a distinction between what he called the "logic" of the denial — which he said the jury could properly question — and the precise issue of proportionality. Like other lawyers who sided with the government, Echeverria questioned how the application of rough proportionality to a project denial, as opposed to an exaction, would work. While opening the door to jury trials in § 1983 cases, Del Monte Dunes apparently does not invite jury trials in inverse condemnation cases filed in state court. Even Burling agreed that inverse condemnation cases will continue to be heard before judges in state courts — partly because of the doctrine that property owners alleging takings must seek state remedies before going to federal court. (Del Monte Dunes pre-dated that doctrine, which was laid down in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987). However, many property rights lawyers, including Burling and Berger, now argue that subsequent California takings cases have eroded the "state remedy" and therefore their clients should be permitted easier access to federal courts — that is, if California courts do not restore the remedy. The two lawyers pointed specifically to Landgate Inc. v. California Coastal Commission, 17 Cal. 4th 1006 (1998), in which a state appellate court ruled against a property owner in a takings case. Contacts: Katherine E. Stone, Myers Widders Gibson & Long, (805) 644-7188. James Burling, Pacific Legal Foundation, (916) 362-2833. John Echeverria, Georgetown University Law Center, (202) 662-9850. Michael Berger, Berger & Norton, (310) 449-1000.

Treasurer Phil Angelides and Attorney General Bill Lockyer filed papers in San Bernardino County Superior Court to halt a planned $15 million bond sale by two Central Valley cities. The bonds would finance a housing development 300 miles away in San Bernardino County. Angelides and Lockyer filed an answer to a validation action submitted by the Rancho Lucerne Valley Public Financing Authority. The Superior Court will now conduct a trail to determine if the bond sale can go forward. Waterford, a 6,600-person city in Stanislaus County, and San Joaquin, a 3,100-person city in Fresno County, joined with a developer's private water company to form the financing authority. They want to issue $15 million worth of bonds to build the 4,000-home Rancho Lucerne subdivision and golf course in San Bernardino County. Forming the authority made use of a loophole in a 1998 law that requires a geographic connection between local bond issues and the project being financed. Lockyer referred to the planned bond issuance as "municipal junk bonds." Angelides said such bonds shake the confidence of investors in more legitimate local financing for schools and roads. Assemblyman Dean Florez (D-Shafter) said he would introduce legislation to eliminate the loophole. Officials of the two cities said the state was overreacting and contended that such bond deals make towns hundreds of thousands of dollars for local projects. But a 1998 state auditor's report said Waterford and San Joaquin had abused the 1985 Marks-Roos Local Bond Pooling Act.

The California Supreme Court will decide the constitutionality of a 1994 law that allows religious organizations to exempt themselves from local historic preservation laws. The court agreed to take the case of East Bay Local Development Corp. v. State of California, 69 Cal.App.4th 1033 (1999), in which the Third District Court of Appeal ruled that the exemption for religious groups did not violate the federal and state constitutional ban on establishing religion. Historic preservation advocates lamented the ruling, and developers contended religious groups received an unfair economic advantage. About 40 years ago, the Legislature gave cities and counties authority to impose special conditions to protect locally designated historic places or structures. But a 1994 law (AB 133) said a religious corporation could exempt itself from local laws intended to protect landmarks if the religious group would suffer a financial hardship or be hindered in its religious mission. Sacramento County Superior Court Judge Joe S. Gray ruled that the religious exemption was unconstitutional. But the appellate court reversed Gray. "The exemption provided by AB 133 does not constitute an endorsement of religion," the court said. "Although exemption is limited to nonprofit religiously affiliated organizations, it does no more than facilitate the efforts of those organizations to advance their own purposes." The appellate court also rejected arguments that AB 133 conflicted with the constitution's equal protection clause. In a petition to the state Supreme Court, the City and County of San Francisco and historic preservation groups said the exemption would have a devastating effect on preservation programs. They also argued that AB 133 discriminates against nonreligious owners of landmarks. State lawyers, however, followed the appellate court's reasoning that AB 133 actually aided separation of church and state by removing a government regulation affecting religious affairs. Voting to review the appellate court's opinion were Chief Justice Ronald George, and Justices Joyce Kennard, Ming Chin and Janice Brown.

The federal Americans with Disabilities Act applies to local zoning ordinances, the Ninth Circuit U.S. Court of Appeals has ruled. The decision stemmed from a City of Antioch urgency ordinance that prevented a methadone treatment clinic from opening on an appropriately zoned site. The unanimous three-judge appellate panel reversed a ruling by District Court Judge Susan Illston, who agreed ADA applies to local zoning but refused to issue a preliminary injunction against the city. The appellate panel said Illston applied the wrong legal test when deciding the clinic's preliminary injunction. The appellate court said the preliminary injunction blocking the urgency ordinance is appropriate if the clinic demonstrates it "does not pose a significant risk to the health or safety of the community" or that such threats may be ameliorated. The ruling is important for drug treatment clinics, group homes for mentally ill people and proponents of other land uses that are often unpopular, said Amitai Schwartz, attorney for the methadone clinic. "What it basically holds is that the ADA overrides the typical zoning considerations a city might entertain when adopting zoning ordinances and general plans," Schwartz said. However, the city's lawyer, Gary Lepper, said application of the ruling to actual land use matters might prove limited. The ruling is "more sweeping theoretically than it is practically," he said. Still, Lepper said he expects ADA proponents to cite the case extensively. In December of 1997, Contra Costa County officials told Bay Area Addiction Research and Treatment, Inc., and California Detoxification Programs, Inc., that the methadone clinic operated by those two organizations in the Pittsburg courthouse would have to move by September 30, 1998. The county is renovating the courthouse, where the methadone clinic has operated for 13 years. Clinic operators found a suitable new location among medical and commercial offices on Sunset Lane in Antioch, the town just east of Pittsburg. Antioch's deputy director for community development notified clinic operators in writing that the clinic would be a permitted use under the city's general plan and zoning designation. But when Antioch residents who live nearby learned of the clinic's planned relocation, they demanded the City Council prevent the move. The City Council responded on April 28, 1998, with a 45-day urgency ordinance forbidding issuance of permits for substance abuse clinics within 500 feet of a residential property. Residential backyards abut the proposed clinic site. In June, the council extended the ordinance and singled out methadone clinics. Councilmembers said the clinic would attract drug dealers and increase area crime. The clinic operators sued. They contended zoning is an activity covered by the ADA, 42 U.S.C. §§12131-12165, and the Rehabilitation Act, U.S.C. §794. The district court agreed but ruled against the request for a preliminary injunction because the clinic had not demonstrated it would be irreparably harmed without the injunction or that it was likely to prevail on the suit's merits. In defending the appeal, Antioch conceded that ADA and the Rehabilitation Act apply to zoning. Still, the appellate court noted that other jurisdictions have argued that zoning is not a service, program or activity within the meaning of ADA, and the court considered the issue. In reviewing the ADA's legislative history, Judge Wallace Tashima wrote, "Congress specifically rejected an approach that could have left room for exceptions to §12132's prohibition on discrimination by public entities." Tashima further noted that the U.S. Department of Justice's Technical Assistance Manual "expressly cites zoning as an example of a public entity's obligation to avoid discrimination." Frequently citing the Second Circuit's decision in Innovative Health Systems, Inc., v. City of White Plains, 117 F.3rd 37 (2d Cir. 1997), Tashima wrote, "Although we recognize that zoning is a traditionally local activity, Congress has spoken. Accordingly, we hold that APA applies to zoning." As for the preliminary injunction request, the appellate panel said the district court wrongly applied the "reasonable modifications test." This test holds that " public entity shall make reasonable modifications in policies, practices or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program or activity." According to Schwartz, the clinic's attorney, District Court Judge Illston refused the preliminary injunction because there were other places in town where the clinic could open. The appellate court agreed with Schwartz, who argued that the reasonable modifications test "makes little sense in the context of a statute that discriminates against qualified individuals on its face rather than in its application." Instead, the district court should have used the significant risk test. " he ADA does not wholly preclude public entities from making certain distinctions on the basis of disability if those distinctions are absolutely necessary. The significant risk test provides public entities with the ability to craft program or statutes that respond to serious threats to the public health and safety while insuring that these (rare) distinctions are based on sound policy grounds instead of on fear and prejudice," the court ruled. To receive protection under the ADA, the methadone clinic operators need only show that it does not present a "direct threat" to the health or safety of others, the court said. Lepper, the city's lawyer, said the test prescribed by the Ninth Circuit will lead to the same answer is almost every instance. Antioch, for example, has never had a methadone clinic before, so proving that one would pose a threat to the community is nearly impossible, he said. People on either side of the issue could argue that the experience of another town is not applicable in Antioch, he said. "How do you demonstrate that it's a threat? It's going to be a damned tough test for the city to pass," Lepper said. Because it considers part of the opinion ambiguous, the city has field a request with the Ninth Circuit for a rehearing. The Case: Bay Area Addiction Research and Treatment v. City of Antioch, No. 98-16612, D.C. No. CV 98-2651 SI, 99 C.D.O.S. 4223, Daily Journal D.A.R. 5381, filed June 3, 1999. The Lawyers: For BAART: Amitai Schwartz, (415) 398-0922 For Antioch: Gary M. Lepper, Lepper, Schaefer & Harrington, (925) 256-6180.

An industrial business park, a commercial truck center and what may be the largest truck stop in the United States will create an estimated 5,200 jobs on a portion of the former Kaiser steel mill in unincorporated San Bernardino County, according to project backers. County supervisors unanimously approved a specific plan for a 320-acre industrial and commercial complex, and granted a conditional use permit for a 75-acre truck stop between the cities of Fontana and Ontario. Kaiser Ventures, owned mostly by retired Kaiser steelworkers and their dependents, hopes to begin about 20 months of construction in fall of 2000, said Lee Redmond, Kaiser Ventures' vice president of real estate. "It's a good project," said Mac Coleman, San Bernardino County senior associate planner. "It takes what is left of the Kaiser mess and converts it to a productive land use." However, the U.S. Fish & Wildlife Service is now raising endangered species issues, and infrastructure construction that would serve the project may require "incidental take" permits from federal regulators. Arranging those permits can be a slow process. As proposed, the Kaiser Commerce Center will have three components: 3.8 million square feet of manufacturing, distribution and warehouse buildings, an 80-acre commercial complex along Interstate 10 that will serve as an auto mall for truckers, and a giant truck stop, Redmond explained. The large manufacturing and distribution center makes sense because both the Burlington Northern Santa Fe Railroad and the Union Pacific Railroad serve the site, he said. The commercial truck center has good freeway visibility. The truck stop meets an obvious demand in an area where about 43,000 trucks pass daily. "There is such a need for additional facilities for the massive number of trucks coming through this area," Redmond said. "We'll be able to handle right at about 1,300 trucks a night." The site is west and south of California Speedway, completed in 1997 on 527 acres of Kaiser's vast real estate holdings in the Fontana area. A large recycling facility and other industrial operations lie on other portions of the former Kaiser mill and manufacturing site. "It all seems to live pretty well with each other, even though it is vastly different," Redmond said. Kaiser Ventures and county officials project the commerce center, when complete, will create about 5,200 on-site jobs and nearly that many more directly related off-site jobs. The steel mill at its peak employed about 11,000 people. The project is one aspect of the Fontana area's continued recovery from the steel mill's closure during the mid-80s and of the rapid industrial expansion in the region. The San Bernardino-Riverside metropolitan area ranked third in the nation for construction of new manufacturing facilities in 1998, according to Site Selection magazine. The area's 58 new industrial buildings last year accounted for about 20 percent of the state total, and was topped only by Chicago and Detroit. Since 1995, the City of Fontana has approved 6.2 million square feet of warehouse, distribution and manufacturing space, according to Dean Libbee, a city planner. And more land remains for industrial development, he said. Why Fontana? "The land is cheap, and we're close to I-10, I-15, and the 60 freeway," Libbee said. Close proximity to Ontario International Airport, which aids that city's industrial expansion, is another factor, Libbee noted. Reuse of the Kaiser property is one of the biggest parts of the region's business growth, and the planned commerce center will provide an employment core that many cities would envy. However, the commerce center project has drawbacks. Caltrans still must approve planned freeway access projects, and environmental concerns promise to be even stickier. In approving the commerce center this spring, the county adopted statements of overriding consideration for off-site traffic congestion, and regarding air pollution during construction and after project completion. Also, Kaiser Ventures plans to use at least a portion of the millions of cubic yards of slag remaining from the steel mill for building foundations. An environmental impact report concluded there is no inherent danger in using the slag, but no one knows for sure what lies inside and underneath the 40-foot slag heaps, Coleman said. Marjorie Musser Mikels, an Upland attorney, argued that the project EIR failed to disclose significant impacts on water, traffic and air quality. She contended the county is ignoring underground pollution that taints groundwater for the sake of economic growth. "If you're going to put all these wonderful economic uses there, and these people are going to make all these millions of dollars, then they should have to clean up these places and not just cover it over," said, Mikels. (Mikels is the estranged wife of County Supervisor Jon Mikels, in whose district the Kaiser project lies.) Environmentalists and state regulators have raised concerns about PM10, which comprises a significant part of diesel exhaust. (PM10 are microscopic dust particles tiny enough to infiltrate human lungs.) A thousand trucks idling all night would only exacerbate the region's dirty air. Furthermore, biologists believe construction of a freeway interchange and work on a flood control channel may harm habitat for two federally endangered species, the Delhi sands flower-loving fly, and the San Bernardino kangaroo rat. Sands appropriate for the fly are located near the site and should be surveyed, said P.J. White, a Fish & Wildlife Service biologist. Kangaroo rats have been captured in washes near the Kaiser property, he said. The federal highway administration, which is providing partial funding for the work at I-10 and Etiwanda Avenue, is conducting a survey, White said. Federal regulators have asked the flood control district to conduct a separate survey before proceeding with work on San Seveine Creek. The creek, which runs through the Kaiser property, is already confined to a concrete channel, but the flood control district and county proposed enlarging the channel to withstand a 100-year flood. Doing so would prevent replenishment of sensitive alluvial sage scrub habitat favored by the kangaroo rat, he said. "As of right now, we don't have any concerns with Kaiser Ventures itself," White said. However, the public agencies behind the off-site projects — on which the Kaiser Commerce Center depends — may have to receive incidental take permits from USF&W because of impacts on the two endangered species. Coleman said the county's analysis disagrees with the federal concerns, which federal officials raised too late for inclusion in the commerce center EIR. Despite these concerns, few see any reason to doubt the area's continued industrial growth. The San Bernardino-Riverside area has absorbed 12 million to 16 million square feet of industrial space every year this decade. A recent economic forecast by California State University, Long Beach, predicted the San Bernardino-Riverside area would maintain job growth of at least 4% annually through 2001, the fastest in the Los Angeles region. Not surprisingly, construction employment leads the way. Contacts: Mac Coleman, San Bernardino County senior associate planner, (909) 387-4131 Lee Redmond, Kaiser Ventures vice president of real estate, (909) 483-8500. Dean Libbee, Fontana planner, (909) 350-7676. P.J. White, U.S. Fish & Wildlife Service biologist, (760) 431-9440.